--- title: "Soaring Oil Prices Become a \"New Threat\" to US Stocks! Morgan Stanley Predicts Brent Crude Will Hit $100 in Q4" type: "News" locale: "en" url: "https://longbridge.com/en/news/296794131.md" description: "Morgan Stanley has raised its crude oil price target, forecasting that Brent crude will rise to $100 per barrel in the fourth quarter of this year due to slower-than-expected supply recovery in the Middle East. Meanwhile, Morgan Stanley strategist Wilson warned that further oil price increases could push up US Treasury yields, compress US stock valuations, and ultimately force the Federal Reserve to intervene" datetime: "2026-08-24T13:15:42.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296794131.md) - [en](https://longbridge.com/en/news/296794131.md) - [zh-HK](https://longbridge.com/zh-HK/news/296794131.md) generator: "portal-rs" --- # Soaring Oil Prices Become a "New Threat" to US Stocks! Morgan Stanley Predicts Brent Crude Will Hit $100 in Q4 The continuous rise in oil prices is becoming the biggest threat facing the US stock market. Morgan Stanley strategist Michael Wilson warned that **further increases in crude oil prices could push up bond yields and force the Federal Reserve to take action, thereby triggering additional market turmoil.** At the same time, **Morgan Stanley has raised its Brent crude oil price forecast, expecting it to reach $100 per barrel in the fourth quarter of this year.** Wilson pointed out that **a renewed rise in oil prices will drive yields higher, ultimately forcing the Federal Reserve to intervene against the backdrop of Chair Kevin Warsh's commitment to bringing inflation back to target.** "At that point, **the burden of responding to pressure will fall more on the Federal Reserve than on the Treasury Department,**" he said. "**We have no doubt that the Federal Reserve will eventually respond, but it may not act before further market turmoil occurs.**" Morgan Stanley also expects that supply recovery in the Middle East will be slower than previously anticipated, which will lead to a persistent supply deficit in the market during the fourth quarter and the first quarter of next year, providing support for higher oil prices. ## Oil Prices Have Cumulatively Risen About 30% Since Early July Brent crude oil prices have cumulatively risen about 30% since early July, currently trading near $91 per barrel. Driving factors include the reignition of conflicts in the Middle East and the prolonged failure to reach a permanent peace agreement between the US and Iran. Meanwhile, the yield on 30-year US Treasury bonds rose to a nearly two-decade high last week, prompting the US Treasury Department to increase the scale of debt buybacks. The simultaneous rise in oil prices and bond yields is compressing equity valuation space and increasing macroeconomic policy uncertainty. ## Energy Stocks as a Hedging Tool Wilson suggested that investors use energy stocks as a hedge against potential oil price spikes. He noted that historical data shows that the damage caused to the stock market by rising oil prices is greater than the boost provided by falling oil prices, making the stability of crude oil prices increasingly critical for the overall market. On a broader asset allocation level, Wilson reiterated his preference for so-called "quality" stocks, defined as companies with more stable earnings, strong profit margins, and efficient operational capabilities. He stated that the S&P 500 Index's higher exposure to quality companies helped it resist larger declines during the sell-off dominated by the semiconductor sector in July. As of last Friday, the index closed less than 2% below its historical highs. Wilson also added that the composition of the S&P 500 Index is one of the reasons he prefers US stocks over overseas markets, and he believes that chip stocks are unlikely to regain their market leadership position in the short term. ### Related Stocks - [VDE.US](https://longbridge.com/en/quote/VDE.US.md) - [BNO.US](https://longbridge.com/en/quote/BNO.US.md) - [XLE.US](https://longbridge.com/en/quote/XLE.US.md) - [USO.US](https://longbridge.com/en/quote/USO.US.md) - [IEZ.US](https://longbridge.com/en/quote/IEZ.US.md) - [SCO.US](https://longbridge.com/en/quote/SCO.US.md) - [PXJ.US](https://longbridge.com/en/quote/PXJ.US.md) - [IXC.US](https://longbridge.com/en/quote/IXC.US.md) - [XOP.US](https://longbridge.com/en/quote/XOP.US.md) - [UCO.US](https://longbridge.com/en/quote/UCO.US.md) - [ERX.US](https://longbridge.com/en/quote/ERX.US.md) - [ERY.US](https://longbridge.com/en/quote/ERY.US.md) - [GUSH.US](https://longbridge.com/en/quote/GUSH.US.md) - [DRIP.US](https://longbridge.com/en/quote/DRIP.US.md) - [IEO.US](https://longbridge.com/en/quote/IEO.US.md) - [OIH.US](https://longbridge.com/en/quote/OIH.US.md) - [XES.US](https://longbridge.com/en/quote/XES.US.md) - [CRAK.US](https://longbridge.com/en/quote/CRAK.US.md) - [DUG.US](https://longbridge.com/en/quote/DUG.US.md) - [MLPA.US](https://longbridge.com/en/quote/MLPA.US.md) - [03097.HK](https://longbridge.com/en/quote/03097.HK.md) - [03175.HK](https://longbridge.com/en/quote/03175.HK.md) - [MS.US](https://longbridge.com/en/quote/MS.US.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [MS-O.US](https://longbridge.com/en/quote/MS-O.US.md) - [MS-Q.US](https://longbridge.com/en/quote/MS-Q.US.md) - [MS-E.US](https://longbridge.com/en/quote/MS-E.US.md) - [MS-I.US](https://longbridge.com/en/quote/MS-I.US.md) - [MS-L.US](https://longbridge.com/en/quote/MS-L.US.md) - [MS-P.US](https://longbridge.com/en/quote/MS-P.US.md) - [MS-A.US](https://longbridge.com/en/quote/MS-A.US.md) - [MS-F.US](https://longbridge.com/en/quote/MS-F.US.md) - [MS-K.US](https://longbridge.com/en/quote/MS-K.US.md) ## Related News & Research - [Oil prices steady as investors assess US-Iran war outlook](https://longbridge.com/en/news/296417823.md) - [Oil edges up on uncertainty over exports through Hormuz](https://longbridge.com/en/news/296282399.md) - [Oil set for second weekly rise as unsettled US-Iran war crimps supply](https://longbridge.com/en/news/296555193.md) - [Oil extends climb on prolonged Hormuz export uncertainty](https://longbridge.com/en/news/296302371.md) - [Asia Fuel Oil-VLSFO retreats; hi-5 drops to over two-month low](https://longbridge.com/en/news/296340423.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**