Easing oil risks, broadening earnings, and a steady Fed policy support UBS’s view of limited near-term downside for equities.
UBS expects the S&P 500 rally to extend, citing reduced Hormuz-related oil risks and a patient Federal Reserve as key drivers. The bank highlights broadening earnings beyond megacap tech, suggesting potential rotation into cyclical and mid-cap stocks.
Recent ISM manufacturing data strengthens the case for cyclical participation, while Fed policy remains supportive of risk assets if inflation cooperates. UBS notes investor selectivity in AI trades, with Microsoft’s cloud growth contrasting Meta’s free cash flow decline.
The bank argues the rally is underpinned by resilient economic data and earnings validation, not just AI hype.