By UBS Global Wealth Management has raised its year-end 2025 call on the S&P 500 to 6,600 from 6,200.
The bank pointed to stronger earnings, easing trade tensions and the growing chance of Fed rate cuts as drivers.
The new level is only a few percent above where the index last closed at about 6,370, but it underlines UBS’s more upbeat stance on US equities.
UBS’ optimistic view came leaning on tech and AI for earnings growth. Trade tensions have eased, geopolitical jitters have calmed, and investors are taking notice, pushing valuations higher.
Still, the bank flagged caution: inflation remains unpredictable, and the Fed’s next moves could shake things up. Overall, the call is optimistic but measured.
As per UBS, Fed’s next move is going to be critical as it could loosen up liquidity and make stocks look better than other assets.
The bank is counting on solid earnings, easing trade tensions, and policy support to lift the S&P 500, with investors trying to make the most of the market’s momentum.
Key drivers behind UBS’s target upgrade
UBS lifted its S&P 500 target on the back of a few key drivers.
Strong earnings have been the standout, about 80% of companies beat estimates this season, with tech and the AI boom leading the charge. That momentum has kept valuations firm and fed investor confidence.
Easing trade tensions have also removed one of the bigger overhangs, giving UBS more room to lean bullish.
The bank also points to Fed policy as a tailwind, with rate cuts still on the table heading into year-end. Cheaper money would support liquidity and capital flows, adding fuel to equities.
That said, UBS isn’t ignoring the near-term bumps. Valuations look stretched, the growth–inflation mix remains tricky, and macro jitters could still shake things up.
The firm keeps its long-term call intact but warns that investors shouldn’t confuse short-term swings with a straight line higher.
Longer-term view
UBS pushed its S&P 500 year-end 2026 target up to 6,800 from about 6,500, and lifted earnings forecasts too, now $270 a share for 2025 and $290 for 2026.
The higher numbers reflect confidence in profits holding up and the economy adapting. Even so, the bank pointed to familiar risks: inflation that’s still unsettled, geopolitical tensions, and valuations that leave little room for error.
Investors are also watching Jerome Powell’s speech at Jackson Hole, coming just after UBS’s call, for clues on where Fed policy goes next.
Depending on the tone, it could reinforce the bullish case or inject fresh volatility.
The move shows UBS’s conviction in earnings power and macro momentum, but the message was clear, stay optimistic, just not complacent.
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