Dividend increases, announced by the U.S.'s largest banks after the close on Tuesday, exceeded Morgan Stanley analyst Betsy Graseck's expectations. All  22 banks passed the Federal Reserve's annual bank stress test,

Bullish investors believe stocks will look past short-term headwinds like tariffs and focus on an eventually friendly Federal Reserve. Those in the bear camp think stagflation or recession is likely amid sticky inflation and a wobbly jobs market.

The dollar is dropping, but that's good news for US companies doing business overseas. Morgan Stanley says four sectors benefit most from a weak dollar.