Investors stay upbeat even as risks mount, Morgan Stanley survey finds

Retail investors are holding onto optimism even as market risks multiply, according to Morgan Stanley’s latest Wealth Management Pulse Survey.

More than half of respondents (55%) said they remain bullish in the second quarter, only marginally lower than 56% in the prior quarter, signaling that confidence has largely held steady despite a more uncertain backdrop.

At the same time, investors are becoming more attuned to emerging risks layered on top of persistent inflation pressures. Half of those surveyed (50%) continue to cite inflation as their primary concern. However, anxiety around geopolitical conflict has climbed sharply to 20%, up from 12% in the first quarter, while concerns tied to rising energy costs have also increased to 18% from 12%.

Expectations for market turbulence are also building. Roughly 63% of investors anticipate volatility will increase in the near term, a seven-percentage-point jump from the previous quarter.

Political uncertainty is adding another dimension to investor unease. Nearly half (48%) said upcoming midterm elections could influence stock market performance.

Despite these headwinds, investors are not retreating. Instead, engagement levels are rising, with 50% reporting they are spending more time managing their portfolios this quarter, compared to 41% previously.

“With geopolitical concerns, policy uncertainty and higher costs, market whiplash is very real, making day-to-day moves feel noisy,” said Chris Larkin, Managing Director and Head of Trading and Investing at E*TRADE from Morgan Stanley. “But rather than pull back, many investors remain engaged—adjusting to volatility and looking for opportunities in a more complex market backdrop. A healthy dose of volatility is a normal part of market dynamics, and commitment to an investing plan is key.”

Sector preferences reflect both growth opportunities and defensive positioning. Information technology continues to lead, with 56% of investors identifying it as the sector with the most potential, driven in part by ongoing developments in artificial intelligence. Interest in energy remains unchanged at 49%, even amid elevated oil prices, while healthcare is gaining traction, rising two percentage points to 35% as investors look for stability.

The survey was conducted between April 1 and April 20, 2026, among 940 US investors with varying levels of assets and investment approaches. It carries a margin of error of ±3.20% at a 95% confidence level and was administered by Dynata.