Morgan Stanley Wealth Management has released its latest quarterly retail investor pulse survey, indicating that inflation remains the top concern for investors throughout 2025. The survey found that 47% of investors expect inflation to moderate this quarter, but 45% still cite it as their primary worry, an increase of six percentage points from the previous quarter. Tariffs and market volatility continue to be the second and third most significant concerns, at 33% and 21% respectively.
Investor optimism has declined, with bullishness dropping by five percentage points to 56% compared to last quarter. Meanwhile, expectations for Federal Reserve rate cuts have increased. The survey shows that 41% of investors believe the Fed will reduce rates by 0–0.25% at its next meeting, up 12 percentage points from the last quarter. Conversely, 19% expect no change, down eight percentage points from the third quarter.
Despite these concerns, most investors do not plan to make significant changes to their portfolios. According to the survey, 41% intend to maintain their current investment strategies over the next six months, and only 14% plan to move their assets into cash.
Chris Larkin, Managing Director and Head of Trading and Investing at E*TRADE from Morgan Stanley, commented on the findings: “Investors undoubtedly have some whiplash amid a government shutdown, uncertain monetary policy, and some cracks in the labor market. That said, the market is still humming along, and investors seem to see the bigger picture, sticking to their investment strategies as they navigate potential headwinds.”
The survey also assessed investor interest in specific sectors for the fourth quarter of 2025. Technology remains a favored sector, with 56% expressing interest. Energy continues to attract 42% of investors, despite challenges such as supply and demand pressures affecting oil prices and the potential for artificial intelligence to impact the sector. Health care, known as a defensive market area, returned to the top three sectors this quarter, with 34% of investors showing interest.
The survey was conducted online from October 3 to October 20, 2025, among 961 U.S. investors with varying levels of investment experience and asset sizes. The sample was evenly distributed across geographic regions and age groups, with a margin of error of ±3.20 percent at the 95 percent confidence level. The survey was administered by Dynata.
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