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Highlights
- UBS shifts US equities view to a more favorable stance
- Economic slowdown concerns seen as overestimated
- Market volatility potentially cushioned by White House policy shifts
UBS has revised its outlook on US equities, moving from a “neutral” to an “attractive” stance, signaling renewed confidence in the American stock market despite recent turbulence. The upgrade comes amid broader concerns over a global economic slowdown and the impact of trade tensions, which have pushed US markets into a notable correction phase.
The S&P 500 Index (INDEXSP:.INX) recently fell 3.5% in a single session, deepening a downward slide of over 14% from its February highs. While the drop has sparked unease among investors, UBS suggests that fears of a looming recession are likely overstated.
One of the key factors bolstering this refreshed outlook is the recent decision by the US administration to ease trade rhetoric. On April 9, President Donald Trump announced a 90-day pause on reciprocal tariffs, signaling potential flexibility in US trade policy. UBS views this shift as a response to market stress, indicating that the administration may be sensitive to equity and bond market signals.
Mark Haefele, Chief Investment Officer of UBS Wealth Management, highlighted that this apparent willingness to adapt points to a form of market support from the White House — what he refers to as a “Trump put.” This term draws on the idea that policy decisions may act as a backstop to prevent deeper market losses, similar to how central bank actions can stabilize economies during downturns.
In response to this improved sentiment, UBS also raised its downside target for the S&P 500 from 4000 to 4500 points. Haefele noted that historically, periods of heightened volatility have often been followed by positive equity returns, suggesting a potential rebound once current pressures subside.
The shift in stance by UBS is seen as a notable vote of confidence in US corporate fundamentals and market resilience. While uncertainty remains due to geopolitical and macroeconomic variables, the latest upgrade indicates growing optimism that the US market may weather current headwinds more robustly than previously expected.
This new outlook may also reflect broader confidence in key US-listed companies, including large-cap firms such as Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT), which often lead the market during periods of recovery.
As global investors assess their strategies, the UBS perspective underscores a recalibration of risk sentiment and suggests that some of the more pessimistic economic expectations may need rethinking.
