The bank assigns a 60% probability to equities rising over 12 months but urges preparation for multiple economic scenarios.
UBS recommends investors build resilient portfolios to navigate policy and geopolitical uncertainty, prioritizing adaptability over predictions. Its base case forecasts the S&P 500 reaching 8,200 by June 2027, driven by AI spending, fiscal stimulus, and credit growth.
The bank expects US economic growth to remain near its 2% trend, while Europe and Asia face headwinds from higher energy costs. Inflation may rise short-term but should stabilize around central bank targets. UBS sees the ECB hiking rates in 2026 and the Fed cutting in early 2027.
A 20% probability is assigned to a bull case, with downside risks also acknowledged. Oil prices are expected to stay elevated, with Strait of Hormuz traffic gradually normalizing over two to three months.