Morgan Stanley’s Andrew Slimmon said he continues to field questions from financial advisers about when the U.S. stock market might see a pullback, but he expects no more than a pause for the rest of the year.

Despite lofty valuations, Slimmon favors technology, financials, and industrials, noting the Fed’s recent “no-recession” rate cut should support growth stocks. He added that fourth-quarter market rotations are rare, and year-to-date winners often extend gains into year-end.

While the S&P 500 has climbed 13% this year, Slimmon highlighted resilient earnings, cost controls offsetting tariffs, and sidelined cash waiting to enter the market as factors that limit downside risks. He cautioned that higher long-term Treasury yields remain a risk, but overall sees continued strength, particularly in Big Tech and industrials tied to AI infrastructure.