Morgan Stanley reports that strategist Marina Zavolock downgraded the European energy sector from overweight to neutral as oil prices retreated and shipping in the Strait of Hormuz normalized. The research team removed six energy stocks from the preferred pool, substituting them with three bank stocks, two utility stocks, and one copper company stock. Analysts noted that the market has not fully priced in the resumption of navigation, with investor focus potentially shifting toward a potential peace agreement in Ukraine.