What Happened?

Shares of global financial services firm Morgan Stanley (NYSE: MS) fell 6.6% in the afternoon session after the release of a stronger-than-anticipated Producer Price Index (PPI) report showed wholesale inflation rose more than expected in January. 

The U.S. Bureau of Labor Statistics reported that the PPI, a key measure of inflation at the wholesale level, increased by 0.5% last month, significantly above the 0.3% consensus forecast from economists. On a year-over-year basis, the index rose 2.9%. This unexpectedly high reading suggests that inflationary pressures in the supply chain are more persistent than previously thought. The data has dampened investor optimism for near-term interest rate cuts from the Federal Reserve, as the central bank is less likely to lower borrowing costs while inflation remains elevated. This shift in expectations for monetary policy triggered a broad sell-off across the market, as traders adjusted to the possibility of interest rates remaining higher for longer.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Morgan Stanley? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Morgan Stanley’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 1 month ago when the stock gained 5.7% on the news that the company reported fourth-quarter 2025 earnings that surpassed analyst expectations. 

The global financial services firm announced earnings of $2.68 per share, an increase from $2.22 in the same period a year ago, which beat the consensus forecast of $2.45. Additionally, the company's revenue of $17.89 billion marked a 10.3% increase from the prior year and also topped the consensus estimate of $17.66 billion. The positive results were driven by strength in its Institutional Securities segment and a better-than-expected efficiency ratio, a key measure of profitability for banks.

Morgan Stanley is down 8.7% since the beginning of the year, and at $166.14 per share, it is trading 13.1% below its 52-week high of $191.23 from January 2026. Investors who bought $1,000 worth of Morgan Stanley’s shares 5 years ago would now be looking at an investment worth $2,099.

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