UBS Analysts Remain Bullish on U.S. Stocks Despite Volatility

UBS analysts say U.S. equities can continue to climb even as market volatility rises, maintaining a positive stance on risk assets despite political uncertainty, currency pressures and fresh tariff threats from President Donald Trump.

In a note published on Monday, UBS said markets began the week “in a cautious mood” as investors reacted to “a weaker US dollar, the risk of another US government shutdown, and President Donald Trump’s fresh tariff threat against Canada.” 

Gold continued to attract “safe-haven demand,” trading above $5,000 an ounce for the first time (looking to break above $5,100), with gains of more than 17% so far this year, UBS added.

However, the bank reiterated its constructive view on U.S. equities. “While short-term volatility is likely, we maintain our overall positive view toward risk assets,” UBS wrote, citing solid earnings momentum and expectations for further Federal Reserve easing as key supports. 

The firm forecasts S&P 500 earnings growth of 12% in 2026, saying strong fourth-quarter results from megacap technology groups should help underpin performance.

UBS expects the Fed to keep rates unchanged this week after three cuts last year, but said “additional evidence of US labor market weakness should allow the central bank to reduce rates again in March,” arguing that inflation remains contained.

Despite a potentially contentious week in Washington, UBS believes political and geopolitical uncertainty only reinforces the importance of diversification. The bank advised underallocated investors to add equity exposure while balancing portfolios with “quality bonds, gold, and capital preservation strategies.”