Auto-callable Jump Notes from Morgan Stanley (NYSE: MS) linked to US indexes
Rhea-AI Filing Summary
Morgan Stanley Finance LLC is offering $704,000 of Jump Notes with an auto-callable feature, in $1,000 denominations, fully guaranteed by Morgan Stanley. These five-year notes, maturing on January 24, 2031, are linked to the worst performer among the Dow Jones Industrial Average, Nasdaq-100 Index and S&P 500 Index. If on January 22, 2027 all three indexes are at or above their initial levels, the notes are automatically redeemed early for $1,090 per note.
If the notes are not called and on the final determination date all three indexes finish above their initial levels, holders receive $1,000 plus 100% of the gain of the worst-performing index. If any index is at or below its initial level at maturity, investors receive only the $1,000 principal, so there is no downside below par but upside is limited and based on the lowest return of the three indexes. The notes are not listed on any exchange, carry Morgan Stanley credit risk, and have an estimated value of $976.90 per $1,000 at pricing, reflecting embedded fees and funding costs.
Positive
- None.
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- None.
Pricing Supplement No. 13,431
Registration Statement Nos. 333-275587; 333-275587-01
Dated January 20, 2026
Filed pursuant to Rule 424(b)(2)
Morgan Stanley Finance LLC
Structured Investments
Jump Notes with Auto-Callable Feature due January 24, 2031
Based on the Worst Performing of the Dow Jones Industrial AverageSM, the Nasdaq-100 Index® and the S&P 500® Index
Fully and Unconditionally Guaranteed by Morgan Stanley
| § | The notes are unsecured obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley. The notes will pay no interest and have the terms described in the accompanying product supplement, index supplement and prospectus, as supplemented or modified by this document. |
| § | Automatic early redemption. The notes will be automatically redeemed if the closing level of each underlier is greater than or equal to its call threshold level on the first determination date for the early redemption payment. No further payments will be made on the notes once they have been automatically redeemed. |
| § | Payment at maturity. If the notes have not been automatically redeemed prior to maturity and the final level of each underlier is greater than its initial level, investors will receive the stated principal amount plus the upside payment. If, however, the final level of any underlier is equal to or less than its initial level, investors will receive only the stated principal amount at maturity. |
| § | The value of the notes is based on the worst performing underlier. The fact that the notes are linked to more than one underlier does not provide any asset diversification benefits and instead means that poor performance by any underlier will adversely affect your return on the notes, regardless of the performance of the other underliers. |
| § | The notes are for investors who are concerned about principal risk and who are willing to forgo current income in exchange for the repayment of principal at maturity and the possibility of receiving an early redemption payment or payment at maturity that exceeds the stated principal amount. The notes are notes issued as part of MSFL’s Series A Global Medium-Term Notes program. |
| § | All payments are subject to our credit risk. If we default on our obligations, you could lose some or all of your investment. These notes are not secured obligations and you will not have any security interest in, or otherwise have any access to, any underlying reference asset or assets. |
| FINAL TERMS | |
| Issuer: | Morgan Stanley Finance LLC |
| Guarantor: | Morgan Stanley |
| Stated principal amount: | $1,000 per note |
| Issue price: | $1,000 per note (see “Commissions and issue price” below) |
| Aggregate principal amount: | $704,000 |
| Underliers: | Dow Jones Industrial AverageSM (the “INDU Index”), Nasdaq-100 Index® (the “NDX Index”) and S&P 500® Index (the “SPX Index”). We refer to each of the INDU Index, the NDX Index and the SPX Index as an underlying index. |
| Strike date: | January 20, 2026 |
| Pricing date: | January 20, 2026 |
| Original issue date: | January 23, 2026 |
| Final determination date: | January 21, 2031, subject to postponement for non-trading days and certain market disruption events |
| Maturity date: | January 24, 2031 |
| Terms continued on the following page | |
| Agent: | Morgan Stanley & Co. LLC (“MS & Co.”), an affiliate of MSFL and a wholly owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution; conflicts of interest.” |
| Estimated value on the pricing date: | $976.90 per note. See “Estimated Value of the Notes” on page 3. |
| Commissions and issue price: | Price to public | Agent’s commissions and fees(1)(2) | Proceeds to us(3) |
| Per note | $1,000 | $2.50 | $997.50 |
| Total | $704,000 | $1,760 | $702,240 |
| (1) | The notes will be sold only to investors purchasing the notes in fee-based advisory accounts. |
| (2) | MS & Co. expects to sell all of the notes that it purchases from us to an unaffiliated dealer at a price of $997.50 per note, for further sale to certain fee-based advisory accounts at the price to public of $1,000 per note. See “Supplemental information regarding plan of distribution; conflicts of interest.” For additional information, see “Plan of Distribution (Conflicts of Interest)” in the accompanying product supplement. |
| (3) | See “Use of Proceeds and Hedging” in the accompanying product supplement. |
The notes involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 6.
The Securities and Exchange Commission and state securities regulators have not approved or disapproved these notes, or determined if this document or the accompanying product supplement, index supplement and prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The notes are not deposits or savings accounts and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality, nor are they obligations of, or guaranteed by, a bank.
You should read this document together with the related product supplement, index supplement and prospectus, each of which can be accessed via the hyperlinks below. When you read the accompanying index supplement, please note that all references in such supplement to the prospectus dated November 16, 2023, or to any sections therein, should refer instead to the accompanying prospectus dated April 12, 2024 or to the corresponding sections of such prospectus, as applicable. Please also see “Additional Terms of the Notes” and “Additional Information About the Notes” at the end of this document.
References to “we,” “us” and “our” refer to Morgan Stanley or MSFL, or Morgan Stanley and MSFL collectively, as the context requires.
| Product Supplement for Notes dated February 7, 2025 | Index Supplement dated November 16, 2023 |
Prospectus dated April 12, 2024
Morgan Stanley Finance LLC |
Jump Notes with Auto-Callable Feature |
| Terms continued from the previous page | |
| Automatic early redemption: | If, on the first determination date, the closing level of each underlier is greater than or equal to its call threshold level, the notes will be automatically redeemed for the early redemption payment on the early redemption date. No further payments will be made on the notes once they have been automatically redeemed. |
| First determination date: | January 22, 2027, subject to postponement for non-trading days and certain market disruption events |
| Call threshold level: |
With respect to the INDU Index, 48,488.59, which is 100% of its initial level With respect to the NDX Index, 24,987.57, which is 100% of its initial level With respect to the SPX Index, 6,796.86, which is 100% of its initial level |
| Early redemption payment: | $1,090 per note |
| Early redemption date: | January 27, 2027 |
| Payment at maturity per note: |
If the notes have not been automatically redeemed prior to maturity, investors will receive a payment at maturity determined as follows: • If the final level of each underlier is greater than its initial level: stated principal amount + upside payment • If the final level of any underlier is equal to or less than its initial level: stated principal amount Under no circumstances will the payment at maturity be less than the stated principal amount. |
| Final level: | With respect to each underlier, the closing level on the final determination date |
| Initial level: |
With respect to the INDU Index, 48,488.59, which is its closing level on the strike date With respect to the NDX Index, 24,987.57, which is its closing level on the strike date With respect to the SPX Index, 6,796.86, which is its closing level on the strike date |
| Upside payment: | stated principal amount × participation rate × underlier percent change of the worst performing underlier |
| Participation rate: | 100% |
| Underlier percent change: | With respect to each underlier, (final level – initial level) / initial level |
| Worst performing underlier: | The underlier with the lowest percentage return from its initial level to its final level |
| CUSIP: | 61780AXS9 |
| ISIN: | US61780AXS94 |
| Listing: | The notes will not be listed on any securities exchange. |
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Estimated Value of the Notes
The original issue price of each note is $1,000. This price includes costs associated with issuing, selling, structuring and hedging the notes, which are borne by you, and, consequently, the estimated value of the notes on the pricing date is less than $1,000. Our estimate of the value of the notes as determined on the pricing date is set forth on the cover of this document.
What goes into the estimated value on the pricing date?
In valuing the notes on the pricing date, we take into account that the notes comprise both a debt component and a performance-based component linked to the underliers. The estimated value of the notes is determined using our own pricing and valuation models, market inputs and assumptions relating to the underliers, instruments based on the underliers, volatility and other factors including current and expected interest rates, as well as an interest rate related to our secondary market credit spread, which is the implied interest rate at which our conventional fixed rate debt trades in the secondary market.
What determines the economic terms of the notes?
In determining the economic terms of the notes, we use an internal funding rate, which is likely to be lower than our secondary market credit spreads and therefore advantageous to us. If the issuing, selling, structuring and hedging costs borne by you were lower or if the internal funding rate were higher, one or more of the economic terms of the notes would be more favorable to you.
What is the relationship between the estimated value on the pricing date and the secondary market price of the notes?
The price at which MS & Co. purchases the notes in the secondary market, absent changes in market conditions, including those related to the underliers, may vary from, and be lower than, the estimated value on the pricing date, because the secondary market price takes into account our secondary market credit spread as well as the bid-offer spread that MS & Co. would charge in a secondary market transaction of this type and other factors. However, because the costs associated with issuing, selling, structuring and hedging the notes are not fully deducted upon issuance, to the extent that MS & Co. may buy or sell the notes in the secondary market during the amortization period specified herein, absent changes in market conditions, including those related to the underliers, and to our secondary market credit spreads, it would do so based on values higher than the estimated value. We expect that those higher values will also be reflected in your brokerage account statements.
MS & Co. may, but is not obligated to, make a market in the notes, and, if it once chooses to make a market, may cease doing so at any time.
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Hypothetical Examples
The following hypothetical examples illustrate how to determine whether the notes will be automatically redeemed with respect to the first determination date and how to calculate the payment at maturity if the notes have not been automatically redeemed prior to maturity. The following examples are for illustrative purposes only. Whether the notes are automatically redeemed prior to maturity will be determined by reference to the closing level of each underlier on the first determination date. The payment at maturity will be determined by reference to the closing level of each underlier on the final determination date. The actual initial level and call threshold level for each underlier were determined on the strike date. All payments on the notes are subject to our credit risk. The numbers in the hypothetical examples below may have been rounded for ease of analysis. The below examples are based on the following terms:
| Stated principal amount: | $1,000 per note |
| Hypothetical initial level: |
With respect to the INDU Index, 100.00*
With respect to the NDX Index, 100.00*
With respect to the SPX Index, 100.00* |
| Hypothetical call threshold level: |
With respect to the INDU Index, 100.00, which is 100% of its hypothetical initial level
With respect to the NDX Index, 100.00, which is 100% of its hypothetical initial level
With respect to the SPX Index, 100.00, which is 100% of its hypothetical initial level |
| Early redemption payment: | $1,090 per note |
| Participation rate: | 100% |
*The hypothetical initial level of 100.00 for each underlier has been chosen for illustrative purposes only and does not represent the actual initial level of any underlier. Please see “Historical Information” below for historical data regarding the actual closing levels of the underliers.
How to determine whether the notes will be automatically redeemed with respect to the first determination date:
| Closing Level on the First Determination Date | Early Redemption Payment | |||
| INDU Index | NDX Index | SPX Index | ||
| Example #1 | 65.00 (less than its call threshold level) | 105.00 (greater than or equal to its call threshold level) | 40.00 (less than its call threshold level) | N/A |
| Example #2 | 200.00 (greater than or equal to its call threshold level) | 250.00 (greater than or equal to its call threshold level) | 300.00 (greater than or equal to its call threshold level) | $1,090 |
In example #1, because the closing level of at least one underlier is less than its call threshold level on the first determination date, the notes are not automatically redeemed on the early redemption date.
In example #2, because the closing level of each underlier is greater than or equal to its call threshold level on the first determination date, the notes are automatically redeemed on the early redemption date for the early redemption payment. Investors do not participate in any appreciation of any underlier. No further payments are made on the notes once they have been automatically redeemed.
If the closing level of any underlier is less than its call threshold level on the first determination date, the notes will not be automatically redeemed prior to maturity.
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How to calculate the payment at maturity (if the notes have not been automatically redeemed):
The hypothetical examples below illustrate how to calculate the payment at maturity if the notes have not been automatically redeemed prior to maturity.
| Final Level | Payment at Maturity per Note | |||
| INDU Index | NDX Index | SPX Index | ||
| Example #1 | 120.00 (greater than its initial level) | 110.00 (greater than its initial level) | 105.00 (greater than its initial level) |
stated principal amount + upside payment =
stated principal amount + (stated principal amount × participation rate × underlier percent change of the worst performing underlier) =
$1,000 + ($1,000 × 100% × 5%) =
$1,050 |
| Example #2 | 110.00 (greater than its initial level) | 130.00 (greater than its initial level) | 95.00 (equal to or less than its initial level) | $1,000 |
| Example #3 | 30.00 (equal to or less than its initial level) | 35.00 (equal to or less than its initial level) | 40.00 (equal to or less than its initial level) | $1,000 |
In example #1, the final level of each underlier is greater than its initial level. Therefore, investors receive at maturity the stated principal amount plus 100% of the appreciation of the worst performing underlier over the term of the notes.
In examples #2 and #3, the final level of at least one underlier is equal to or less than its initial level. Therefore, investors receive at maturity the stated principal amount.
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Risk Factors
This section describes the material risks relating to the notes. For further discussion of these and other risks, you should read the section entitled “Risk Factors” in the accompanying product supplement and prospectus. We also urge you to consult with your investment, legal, tax, accounting and other advisers in connection with your investment in the notes.
Risks Relating to an Investment in the Notes
| § | The notes may not pay more than the stated principal amount at maturity. If the notes have not been automatically redeemed prior to maturity and the final level of any underlier is equal to or less than its initial level, you will receive only the stated principal amount at maturity, and you will not receive a positive return on your investment. |
| § | The notes do not pay interest. Because the notes do not pay interest, if the notes have not been automatically redeemed prior to maturity and the final level of any underlier is equal to or less than its initial level, you will not receive a positive return on your investment, and therefore the overall return on the notes (the effective yield to maturity) will be less than the amount that would be paid on an ordinary debt security. Accordingly, the return of only the stated principal amount at maturity will not compensate you for the effects of inflation and other factors relating to the value of money over time. |
| § | If the notes are automatically redeemed prior to maturity, the appreciation potential of the notes is limited by the fixed early redemption payment specified for the first determination date. If the closing level of each underlier is greater than or equal to its call threshold level on the first determination date, the appreciation potential of the notes is limited by the fixed early redemption payment, and no further payments will be made on the notes once they have been redeemed. If the notes are automatically redeemed prior to maturity, you will not participate in any appreciation of any underlier, which could be significant. The fixed early redemption payment may be less than the payment at maturity you would receive for the same level of appreciation of the worst performing underlier had the notes not been automatically redeemed and instead remained outstanding until maturity. |
| § | The notes are subject to early redemption risk. The term of your investment in the notes may be shortened due to the automatic early redemption feature of the notes. If the notes are automatically redeemed prior to maturity, you will receive no further payments on the notes, may be forced to invest in a lower interest rate environment and may not be able to reinvest at comparable terms or returns. However, under no circumstances will the notes be redeemed prior to the first determination date. |
| § | The market price of the notes may be influenced by many unpredictable factors. Several factors, many of which are beyond our control, will influence the value of the notes in the secondary market and the price at which MS & Co. may be willing to purchase or sell the notes in the secondary market. We expect that generally the value of each underlier at any time will affect the value of the notes more than any other single factor. Other factors that may influence the value of the notes include: |
| o | the volatility (frequency and magnitude of changes in value) of the underliers; |
| o | interest and yield rates in the market; |
| o | the level of correlation between the underliers; |
| o | geopolitical conditions and economic, financial, political, regulatory or judicial events that affect the underliers or equity markets generally; |
| o | the availability of comparable instruments; |
| o | the composition of each underlier and changes in the component securities of each underlier; |
| o | the time remaining until the notes mature; and |
| o | any actual or anticipated changes in our credit ratings or credit spreads. |
Some or all of these factors will influence the price that you will receive if you sell your notes prior to maturity. Generally, the longer the time remaining to maturity, the more the market price of the notes will be affected by the other factors described above. For example, you may have to sell your notes at a substantial discount from the stated principal amount if, at the time of sale, the closing level of any underlier is at, below or not sufficiently above its initial level, or if market interest rates rise.
You can review the historical closing levels of the underliers in the section of this document called “Historical Information.” You cannot predict the future performance of an underlier based on its historical performance. The values of the underliers may be, and have recently been, volatile, and we can give you no assurance that the volatility will lessen. There can be no assurance that the closing level of each underlier will be greater than or equal to its call threshold level on the first determination date, or that the final level of each underlier will be greater than its initial level, so that you will receive a payment on the notes that exceeds the stated principal amount of the notes.
| § | The notes are subject to our credit risk, and any actual or anticipated changes to our credit ratings or credit spreads may adversely affect the market value of the notes. You are dependent on our ability to pay all amounts due on the notes, and, therefore, you are subject to our credit risk. The notes are not guaranteed by any other entity. If we default on our obligations under the notes, your investment would be at risk and you could lose some or all of your investment. As a result, the market value of the notes prior to maturity will be affected by changes in the market’s view of our creditworthiness. Any actual or anticipated decline in |
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our credit ratings or increase in the credit spreads charged by the market for taking our credit risk is likely to adversely affect the market value of the notes.
| § | As a finance subsidiary, MSFL has no independent operations and will have no independent assets. As a finance subsidiary, MSFL has no independent operations beyond the issuance and administration of its securities and will have no independent assets available for distributions to holders of MSFL securities if they make claims in respect of such securities in a bankruptcy, resolution or similar proceeding. Accordingly, any recoveries by such holders will be limited to those available under the related guarantee by Morgan Stanley and that guarantee will rank pari passu with all other unsecured, unsubordinated obligations of Morgan Stanley. Holders will have recourse only to a single claim against Morgan Stanley and its assets under the guarantee. Holders of securities issued by MSFL should accordingly assume that in any such proceedings they would not have any priority over and should be treated pari passu with the claims of other unsecured, unsubordinated creditors of Morgan Stanley, including holders of Morgan Stanley-issued securities. |
| § | The rate we are willing to pay for securities of this type, maturity and issuance size is likely to be lower than the rate implied by our secondary market credit spreads and advantageous to us. Both the lower rate and the inclusion of costs associated with issuing, selling, structuring and hedging the notes in the original issue price reduce the economic terms of the notes, cause the estimated value of the notes to be less than the original issue price and will adversely affect secondary market prices. Assuming no change in market conditions or any other relevant factors, the prices, if any, at which dealers, including MS & Co., may be willing to purchase the notes in secondary market transactions will likely be significantly lower than the original issue price, because secondary market prices will exclude the issuing, selling, structuring and hedging-related costs that are included in the original issue price and borne by you and because the secondary market prices will reflect our secondary market credit spreads and the bid-offer spread that any dealer would charge in a secondary market transaction of this type as well as other factors. |
The inclusion of the costs of issuing, selling, structuring and hedging the notes in the original issue price and the lower rate we are willing to pay as issuer make the economic terms of the notes less favorable to you than they otherwise would be.
However, because the costs associated with issuing, selling, structuring and hedging the notes are not fully deducted upon issuance, to the extent that MS & Co. may buy or sell the notes in the secondary market during the amortization period specified herein, absent changes in market conditions, including those related to the underliers, and to our secondary market credit spreads, it would do so based on values higher than the estimated value, and we expect that those higher values will also be reflected in your brokerage account statements.
| § | The estimated value of the notes is determined by reference to our pricing and valuation models, which may differ from those of other dealers and is not a maximum or minimum secondary market price. These pricing and valuation models are proprietary and rely in part on subjective views of certain market inputs and certain assumptions about future events, which may prove to be incorrect. As a result, because there is no market-standard way to value these types of securities, our models may yield a higher estimated value of the notes than those generated by others, including other dealers in the market, if they attempted to value the notes. In addition, the estimated value on the pricing date does not represent a minimum or maximum price at which dealers, including MS & Co., would be willing to purchase your notes in the secondary market (if any exists) at any time. The value of your notes at any time after the date of this document will vary based on many factors that cannot be predicted with accuracy, including our creditworthiness and changes in market conditions. See also “The market price of the notes may be influenced by many unpredictable factors” above. |
| § | The notes will not be listed on any securities exchange and secondary trading may be limited. The notes will not be listed on any securities exchange. Therefore, there may be little or no secondary market for the notes. MS & Co. may, but is not obligated to, make a market in the notes and, if it once chooses to make a market, may cease doing so at any time. When it does make a market, it will generally do so for transactions of routine secondary market size at prices based on its estimate of the current value of the notes, taking into account its bid/offer spread, our credit spreads, market volatility, the notional size of the proposed sale, the cost of unwinding any related hedging positions, the time remaining to maturity and the likelihood that it will be able to resell the notes. Even if there is a secondary market, it may not provide enough liquidity to allow you to trade or sell the notes easily. Since other broker-dealers may not participate significantly in the secondary market for the notes, the price at which you may be able to trade your notes is likely to depend on the price, if any, at which MS & Co. is willing to transact. If, at any time, MS & Co. were to cease making a market in the notes, it is likely that there would be no secondary market for the notes. Accordingly, you should be willing to hold your notes to maturity. |
| § | As discussed in more detail in the accompanying product supplement, investing in the notes is not equivalent to investing in the underlier(s). |
| § | You may be required to recognize taxable income on the notes prior to maturity. If you are a U.S. investor in a note, under the treatment of a note as a contingent payment debt instrument, you will generally be required to recognize taxable interest income in each year that you hold the note. In addition, any gain you recognize under the rules applicable to contingent payment debt instruments will generally be treated as ordinary interest income rather than capital gain. You should review carefully the section entitled “United States Federal Income Tax Considerations” herein, in combination with the section entitled “United States |
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Federal Income Tax Considerations” in the accompanying product supplement, and consult your tax adviser regarding the U.S. federal income tax consequences of an investment in the notes.
Risks Relating to the Underlier(s)
| § | Because your return on the notes will depend upon the performance of the underlier(s), the notes are subject to the following risk(s), as discussed in more detail in the accompanying product supplement. |
| o | You are exposed to the price risk of each underlier. |
| o | Because the notes are linked to the performance of the worst performing underlier, you are exposed to a greater risk of not receiving a positive return on the notes than if the notes were linked to just one underlier. |
| o | Adjustments to an underlying index could adversely affect the value of the notes. |
Risks Relating to Conflicts of Interest
In engaging in certain activities described below and as discussed in more detail in the accompanying product supplement, our affiliates may take actions that may adversely affect the value of and your return on the notes, and in so doing they will have no obligation to consider your interests as an investor in the notes.
| § | The calculation agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make determinations with respect to the notes. As calculation agent, MS & Co. will make any determinations necessary to calculate any payment(s) on the notes. Moreover, certain determinations made by MS & Co., in its capacity as calculation agent, may require it to exercise discretion and make subjective judgments, which may adversely affect your return on the notes. In addition, MS & Co. has determined the estimated value of the notes on the pricing date. |
| § | Hedging and trading activity by our affiliates could potentially adversely affect the value of the notes. |
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Historical Information
Dow Jones Industrial AverageSM Overview
Bloomberg Ticker Symbol: INDU
The Dow Jones Industrial AverageSM is a price-weighted index composed of 30 common stocks selected as representative of the broad market of U.S. industry, excluding transportation and utilities. The underlying index publisher with respect to the Dow Jones Industrial AverageSM is S&P® Dow Jones Indices LLC, or any successor thereof. For additional information about the Dow Jones Industrial AverageSM, see the information set forth under “Dow Jones Industrial AverageSM” in the accompanying index supplement.
The closing level of the INDU Index on January 20, 2026 was 48,488.59. The following graph sets forth the daily closing levels of the underlier for the period noted below. We obtained the historical information presented in this document from Bloomberg Financial Markets, without independent verification. The underlier has at times experienced periods of high volatility. You should not take the historical closing levels of the underlier as an indication of its future performance, and no assurance can be given as to the closing level of the underlier at any time.
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INDU Index Daily Closing Levels January 1, 2021 to January 20, 2026 |
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Nasdaq-100 Index® Overview
Bloomberg Ticker Symbol: NDX
The Nasdaq-100 Index® is a modified capitalization-weighted index of 100 of the largest and most actively traded equity securities of non-financial companies listed on The Nasdaq Stock Market LLC (the “Nasdaq”). The underlying index publisher with respect to the Nasdaq-100 Index® is Nasdaq, Inc., or any successor thereof. The Nasdaq-100 Index® includes companies across a variety of major industry groups. At any moment in time, the value of the Nasdaq-100 Index® equals the aggregate value of the then-current Nasdaq-100 Index® share weights of each of the Nasdaq-100 Index® component securities, which are based on the total shares outstanding of each such Nasdaq-100 Index® component security, multiplied by each such security’s respective last sale price on the Nasdaq (which may be the official closing price published by the Nasdaq), and divided by a scaling factor, which becomes the basis for the reported Nasdaq-100 Index® value. For additional information about the Nasdaq-100 Index®, see the information set forth under “Nasdaq-100 Index®” in the accompanying index supplement.
The closing level of the NDX Index on January 20, 2026 was 24,987.57. The following graph sets forth the daily closing levels of the underlier for the period noted below. We obtained the historical information presented in this document from Bloomberg Financial Markets, without independent verification. The underlier has at times experienced periods of high volatility. You should not take the historical closing levels of the underlier as an indication of its future performance, and no assurance can be given as to the closing level of the underlier at any time.
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NDX Index Daily Closing Levels January 1, 2021 to January 20, 2026 |
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S&P 500® Index Overview
Bloomberg Ticker Symbol: SPX
The S&P 500® Index is intended to provide a benchmark for performance measurement of the large capitalization segment of the U.S. equity markets by tracking the stock price movement of 500 companies with large market capitalizations. The underlying index publisher with respect to the S&P 500® Index is S&P® Dow Jones Indices LLC, or any successor thereof. Component stocks of the S&P 500® Index are required to have a total company level market capitalization that reflects approximately the 85th percentile of the S&P® Total Market Index. The S&P 500® Index measures the relative performance of the common stocks of 500 companies as of a particular time as compared to the performance of the common stocks of 500 similar companies during the base period of the years 1941 through 1943. For additional information about the S&P 500® Index, see the information set forth under “S&P® U.S. Indices—S&P 500® Index” in the accompanying index supplement.
The closing level of the SPX Index on January 20, 2026 was 6,796.86. The following graph sets forth the daily closing levels of the underlier for the period noted below. We obtained the historical information presented in this document from Bloomberg Financial Markets, without independent verification. The underlier has at times experienced periods of high volatility. You should not take the historical closing levels of the underlier as an indication of its future performance, and no assurance can be given as to the closing level of the underlier at any time.
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SPX Index Daily Closing Levels January 1, 2021 to January 20, 2026 |
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Additional Terms of the Notes
Please read this information in conjunction with the terms on the cover of this document.
| Additional Terms: |
| If the terms described herein are inconsistent with those described in the accompanying product supplement, index supplement or prospectus, the terms described herein shall control. |
| Denominations: | $1,000 per note and integral multiples thereof |
| Amortization period: | The 6-month period following the issue date |
| Trustee: | The Bank of New York Mellon |
| Calculation agent: | Morgan Stanley & Co. LLC (“MS & Co.”) |
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Additional Information About the Notes
| Additional Information: |
| Minimum ticketing size: | $1,000 / 1 note |
| United States federal income tax considerations: |
You should review carefully the section in the accompanying product supplement entitled “United States Federal Income Tax Considerations.” The following discussion, when read in combination with that section, constitutes the full opinion of our counsel, Davis Polk & Wardwell LLP, regarding the material U.S. federal income tax consequences of owning and disposing of the notes.
Generally, this discussion assumes that you purchased the notes for cash in the original issuance at the stated issue price and does not address other circumstances specific to you, including consequences that may arise due to any other investments relating to an underlier. You should consult your tax adviser regarding the effect any such circumstances may have on the U.S. federal income tax consequences of your ownership of a note.
The notes should be treated as debt instruments for U.S. federal income tax purposes. Based on current market conditions, we intend to treat the notes for U.S. federal income tax purposes as contingent payment debt instruments, or “CPDIs,” as described in “United States Federal Income Tax Considerations—Tax Consequences to U.S. Holders—Notes Treated as Contingent Payment Debt Instruments” in the accompanying product supplement. Under this treatment, regardless of your method of accounting for U.S. federal income tax purposes, you generally will be required to accrue interest income in each year on a constant yield to maturity basis at the “comparable yield,” as determined by us, adjusted upward or downward to reflect the difference, if any, between the actual and projected payments on the notes during the year. Upon a taxable disposition of a note, you generally will recognize taxable income or loss equal to the difference between the amount received and your tax basis in the notes. You generally must treat any income realized as interest income and any loss as ordinary loss to the extent of previous interest inclusions, and the balance as capital loss, the deductibility of which is subject to limitations.
We have determined that the comparable yield for a note is a rate of 4.3981% per annum, compounded semi-annually. Based upon our determination of the comparable yield and assuming a semi-annual accrual period, the following table sets out the “projected payment schedule” per $1,000 principal amount of note, as well as the amount of taxable interest income (without taking into account any adjustment to reflect the difference, if any, between the actual and the projected amount of the contingent payment on a note) that will be deemed to have accrued with respect to a note during each calendar period. |
| Projected Payment Date(s) | Projected Payment(s) (per $1,000) | Accrued OID During Calendar Period (per $1,000) | Total Accrued OID (per $1,000) | |
| June 30, 2026 | $0.0000 | $19.1806 | $19.1806 | |
| December 30, 2026 | $0.0000 | $22.4123 | $41.5929 | |
| June 30, 2027 | $0.0000 | $22.9051 | $64.4980 | |
| December 30, 2027 | $0.0000 | $23.4088 | $87.9068 | |
| June 30, 2028 | $0.0000 | $23.9236 | $111.8304 | |
| December 30, 2028 | $0.0000 | $24.4497 | $136.2801 | |
| June 30, 2029 | $0.0000 | $24.9874 | $161.2675 | |
| December 30, 2029 | $0.0000 | $25.5369 | $186.8044 | |
| June 30, 2030 | $0.0000 | $26.0984 | $212.9028 | |
| December 30, 2030 | $0.0000 | $26.6723 | $239.5751 | |
| January 24, 2031 | $1,243.2096 | $3.6345 | $243.2096 |
|
Neither the comparable yield nor the projected payment schedule constitutes a representation by us regarding the actual amount(s) that we will pay on the notes.
Non-U.S. Holders. If you are a Non-U.S. Holder, please also read the section entitled “United States Federal Income Tax Considerations—Tax Consequences to Non-U.S. Holders” in the accompanying product supplement.
As discussed under “United States Federal Income Tax Considerations—Tax Consequences to Non-U.S. Holders—Dividend Equivalents under Section 871(m) of the Code” in the accompanying product supplement, Section 871(m) of the Internal Revenue Code and Treasury regulations promulgated thereunder (“Section 871(m)”) generally impose a 30% withholding tax on dividend equivalents paid or deemed paid to Non-U.S. Holders with respect to certain financial instruments linked to U.S. equities or indices that include U.S. equities. The Treasury regulations, as modified by an IRS notice, exempt financial instruments issued prior to January 1, 2027 that do not have a “delta” of one. Based on certain |
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representations made by us, our counsel is of the opinion that Section 871(m) should not apply to the notes with respect to Non-U.S. Holders. Our determination is not binding on the IRS, and the IRS may disagree with this determination.
We will not be required to pay any additional amounts with respect to U.S. federal withholding taxes.
You should consult your tax adviser regarding the U.S. federal income tax consequences of an investment in the notes, as well as tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction. | |
| Additional considerations: | Client accounts over which Morgan Stanley, Morgan Stanley Wealth Management or any of their respective subsidiaries have investment discretion are not permitted to purchase the notes, either directly or indirectly. |
| Supplemental information regarding plan of distribution; conflicts of interest: |
MS & Co. expects to sell all of the notes that it purchases from us to an unaffiliated dealer at a price of $997.50 per note, for further sale to certain fee-based advisory accounts at the price to public of $1,000 per note. MS & Co. will not receive a sales commission with respect to the notes.
MS & Co. is an affiliate of MSFL and a wholly owned subsidiary of Morgan Stanley, and it and other affiliates of ours expect to make a profit by selling, structuring and, when applicable, hedging the notes.
MS & Co. will conduct this offering in compliance with the requirements of FINRA Rule 5121 of the Financial Industry Regulatory Authority, Inc., which is commonly referred to as FINRA, regarding a FINRA member firm’s distribution of the securities of an affiliate and related conflicts of interest. MS & Co. or any of our other affiliates may not make sales in this offering to any discretionary account. See “Plan of Distribution (Conflicts of Interest)” and “Use of Proceeds and Hedging” in the accompanying product supplement. |
| Validity of the notes: | In the opinion of Davis Polk & Wardwell LLP, as special counsel to MSFL and Morgan Stanley, when the notes offered by this pricing supplement have been issued by MSFL pursuant to the MSFL Senior Debt Indenture (as defined in the accompanying prospectus), the trustee and/or paying agent has made, in accordance with the instructions from MSFL, the appropriate entries or notations in its records relating to the master note that represents such notes (the “master note”), and such notes have been delivered against payment as contemplated herein, such notes will be valid and binding obligations of MSFL and the related guarantee will be a valid and binding obligation of Morgan Stanley, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability (including, without limitation, concepts of good faith, fair dealing and the lack of bad faith), provided that such counsel expresses no opinion as to (i) the effect of fraudulent conveyance, fraudulent transfer or similar provision of applicable law on the conclusions expressed above and (ii) any provision of the MSFL Senior Debt Indenture that purports to avoid the effect of fraudulent conveyance, fraudulent transfer or similar provision of applicable law by limiting the amount of Morgan Stanley’s obligation under the related guarantee. This opinion is given as of the date hereof and is limited to the laws of the State of New York, the General Corporation Law of the State of Delaware and the Delaware Limited Liability Company Act. In addition, this opinion is subject to customary assumptions about the trustee’s authorization, execution and delivery of the MSFL Senior Debt Indenture and its authentication of the master note and the validity, binding nature and enforceability of the MSFL Senior Debt Indenture with respect to the trustee, all as stated in the letter of such counsel dated September 23, 2025, which was filed as an exhibit to a Current Report on Form 8-K by the Company on September 23, 2025. |
| Where you can find more information: |
Morgan Stanley and MSFL have filed a registration statement (including a prospectus, as supplemented by the product supplement and the index supplement) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. You should read the prospectus in that registration statement, the product supplement, the index supplement and any other documents relating to this offering that MSFL and Morgan Stanley have filed with the SEC for more complete information about Morgan Stanley and this offering. When you read the accompanying index supplement, please note that all references in such supplement to the prospectus dated November 16, 2023, or to any sections therein, should refer instead to the accompanying prospectus dated April 12, 2024 or to the corresponding sections of such prospectus, as applicable. You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, MSFL, Morgan Stanley, any underwriter or any dealer participating in the offering will arrange to send you the prospectus, the index supplement and the product supplement if you so request by calling toll-free 1-(800)-584-6837.
Terms used but not defined in this document are defined in the product supplement, in the index supplement or in the prospectus. Each of the product supplement, the index supplement and the prospectus can be accessed via the hyperlinks set forth on the cover of this document. |
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FAQ
What are the key terms of Morgan Stanley (MS) Jump Notes in this 424B2?
The notes have a stated principal of $1,000 per note, with a total offering size of $704,000. They mature on January 24, 2031, are fully guaranteed by Morgan Stanley, and are linked to the Dow Jones Industrial Average, Nasdaq-100 Index and S&P 500 Index. The issue price is $1,000 per note and the estimated value at pricing is $976.90 per note.
How does the auto-call feature work on these Morgan Stanley (MS) Jump Notes?
The notes are automatically redeemed if on the first determination date, January 22, 2027, the closing level of each index is at or above its call threshold, which equals its initial level. In that case, investors receive an early redemption payment of $1,090 per note on January 27, 2027, and no further payments are made.
What do investors in Morgan Stanley (MS) Jump Notes receive at maturity if the notes are not called?
If the notes are not automatically redeemed, the maturity payment depends on index performance on the final determination date. If all three indexes finish above their initial levels, investors receive $1,000 plus an upside payment equal to 100% of the percentage gain of the worst-performing index. If any index is at or below its initial level, investors receive only the $1,000 principal per note.
What are the main risks of the Morgan Stanley (MS) auto-callable Jump Notes?
Key risks include exposure to Morgan Stanley’s credit, no participation in index gains if the notes are called early beyond the fixed $1,090 payment, and reliance on the worst-performing index for upside. The notes are not FDIC insured, are not listed on any exchange, and their secondary market price may be below the $1,000 issue price due to fees, funding costs and market conditions.
How are fees and estimated value disclosed for these Morgan Stanley (MS) Jump Notes?
The price to the public is $1,000 per note, while the agent’s commissions and fees are $2.50 per note, leaving $997.50 in proceeds to the issuer per note. The estimated value on the pricing date is $976.90 per note, reflecting issuing, selling, structuring and hedging costs and Morgan Stanley’s internal funding rate.
How are the Morgan Stanley (MS) Jump Notes treated for U.S. federal income tax purposes?
The notes are expected to be treated as debt instruments and, based on current market conditions, as contingent payment debt instruments for U.S. federal income tax purposes. Investors generally must accrue interest income annually using a comparable yield of 4.3981% per annum, compounded semi-annually, with projected payments and original issue discount amounts set out in a schedule in the document.