Morgan Stanley's latest US Equity Strategy report highlights a favorable outlook for the S&P 500, driven by strong earnings revisions in Financials, Media & Entertainment, and Software sectors. The report, dated January 27, 2025, emphasizes the importance of industries with robust EPS revisions and pricing power, noting that "Financials, Media & Entertainment, and Software stand out on the EPS revisions front." The S&P 500 is expected to see a 14% EPS growth in 2025, with Tech contributing significantly to this expansion. Morgan Stanley analysts suggest that the current market environment favors services-oriented industries with limited tariff exposure, which could benefit from the USD strength observed in Q4. The report also underscores the potential for a broader earnings recovery, driven by lower rates and tech-driven efficiency, as the ISM cycle is projected to turn higher this year.