UBS cites resilient US growth, strong earnings, and Fed policy expectations as drivers for continued equity gains despite low volatility.
UBS remains optimistic on global equities, pointing to resilient US economic growth, robust corporate earnings, and a Federal Reserve likely to hold rates steady. The bank’s stance comes as the VIX, a key volatility gauge, reaches its lowest level of 2026, signaling market calm despite elevated geopolitical risks.
The bank’s outlook contrasts with market expectations, which currently price in more than one rate hike over the next year. UBS anticipates softer payrolls, inflation, and consumer spending data to keep the Fed on hold, though recent hawkish FOMC minutes could spark volatility. The firm also highlights broadening earnings participation as a potential catalyst for a rotation away from mega-cap leadership.
UBS’s base case suggests equities may continue climbing into year-end, provided near-term catalysts like Nvidia’s earnings and the Jackson Hole symposium unfold without surprises. The divergence between UBS’s view and market pricing leaves room for data-driven swings in sentiment.