Traders work in the S&P 500 options pit at Cboe Global Markets Inc. in Chicago, Illinois.

Trade tensions are expected to weigh on stocks, creating volatility and corrections, until the Fed pauses its rate hikes, Morgan Stanley chief equity strategist Michael Wilson said in a note.

Wilson said he expects to see more "volatility with several 10 percent corrections in global equity markets at different points."

Trade issues will be the catalyst in the near term and will be a negative influence because of concerns about their effect on earnings and the economy, he noted in his second-half outlook.