The S&P 500 rose 1.1% and the Nasdaq gained 1.6% on Wednesday, before edging lower on Thursday. The index was lifted by a strong start to earnings season and President Donald Trump’s comments that the ceasefire with Iran would remain in place indefinitely.

But UBS cautions that “the path upward may remain bumpy” despite expecting stocks to finish the year higher.

Oil remains a central concern. Brent crude hit $106 per barrel, its highest level in more than two weeks, as the Strait of Hormuz remains closed.

UBS notes that Iranian gunboats fired on commercial ships in the strait on Wednesday while the U.S. intercepted two Iranian oil tankers, underscoring the difficulty of resolving the standoff.

The firm expects Brent to stay above $90 per barrel through year-end, warning that “the drag on global growth may be more severe than what markets have priced in so far.”

On AI, UBS remains constructive on memory, advanced semiconductors and enabling infrastructure, citing SK Hynix’s five-fold jump in quarterly earnings as further confirmation of robust demand.

However, the firm flags “early signs of soft spots in demand and intensifying competition,” suggesting AI infrastructure bottlenecks may be shifting. ServiceNow’s mixed results, it adds, point to “continued pressure in parts of the software sector due to AI disruption.”

UBS recommends diversification across sectors and geographies, with exposure to quality bonds, gold and broad commodities as essential hedges in the current environment.

“While we believe investors should position for medium- to long-term upside in equities, we continue to recommend diversification across sectors and geographies,” the bank’s analysts wrote.

“Structured investments may also be considered for more defensive positioning, especially after the recent rally. More broadly, portfolio exposure to quality bonds, gold, and broad commodities remains essential in navigating an uncertain environment.”

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The firm notes that analysts currently see S&P 500 companies delivering double-digit earnings growth in the first quarter of 2026, with consensus estimates suggesting around 12% year-on-year expansion, with some projections indicating growth could rise closer to 18–19%, which would mark one of the strongest quarters since the post-pandemic rebound period.

“Corporate America is heading into this earnings season with serious momentum,” says Green. “Forecasts have strengthened in recent weeks, and the underlying drivers are clear: a weaker dollar, robust fiscal stimulus under President Trump, and resilient global demand.”

Green points to the Trump administration’s fiscal agenda as a key driver. “The administration’s tax and spending agenda is feeding directly into earnings strength,” he says.

“Incentives for capital investment, alongside broader tax cuts, are driving business activity and supporting margins.”

Currency dynamics are said to be providing additional support, with Green noting that “a softer dollar is a powerful tailwind for US companies with global exposure,” adding that sectors such as tech, materials and energy are seeing overseas revenues translate more favourably.

However, Green cautions that the earnings story is not the same across all sectors, with the dispersion reinforcing the importance of selective positioning rather than broad exposure. Green also flagged that industrials and energy-intensive sectors face greater pressure from rising input costs.

Equities have rebounded strongly following news of a temporary US-Iran ceasefire. “Strong earnings in the face of global volatility reinforce a key principle: staying invested remains essential,” Green concludes.

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The report, released this morning, outlines expectations for the quarter, acknowledging the impact of heightened volatility in crude oil, natural gas, and refined product prices stemming from the ongoing situation in the Middle East.

BP anticipates its first quarter underlying replacement cost (RC) profit before interest and tax to be influenced by several factors compared to the fourth quarter of 2025. Reported upstream production is expected to be broadly flat at 2,344 mboe/d, with gas & low carbon energy production slightly higher at 788 mboe/d and oil production & operations slightly lower at 1,555 mboe/d.

Realizations in the Gas & low carbon energy segment are projected to be broadly flat, influenced by price lags and changes in non-Henry Hub natural gas marker prices. The gas marketing and trading result is expected to be average, mirroring the fourth quarter of 2025.

The Oil production & operations segment is expected to see a positive impact on realizations, in the range of +$0.1 to 0.2 billion, largely due to price lags affecting production in the Gulf of America and the UAE. Cash costs are projected to increase by $0.1 billion, while the depreciation, depletion & amortization (DD&A) charge remains broadly flat at $2.0 billion.

The Customers & products segment anticipates seasonally lower volumes and reduced retail fuel margins within the customers division, offset by stronger midstream performance. Products anticipates stronger realized refining margins in the range of +$0.1 to 0.2 billion and a lower impact from turnaround activity. Crucially, the oil trading result is expected to be exceptional, a stark contrast to the weak performance in the fourth quarter of 2025.

BP estimates its group underlying effective tax rate for the first quarter to be around 35%, reflecting higher results in products. Capital expenditure is expected to be broadly flat with the organic capital expenditure in the fourth quarter 2025 ($3.5 billion).

Net debt at the end of the first quarter is projected to be in the range of $25 to 27 billion, compared to $22.2 billion at the end of the fourth quarter 2025. This increase is primarily attributed to a significant working capital build in the range of $4 to 7 billion, largely due to the prevailing price environment.

Driver Breakdown:

• Oil Trading: Anticipated exceptional performance expected to boost overall results.
• Working Capital: Significant build due to price volatility impacting net debt.
• Refining Margins: Stronger realized margins provide a positive offset to other challenges.

BP’s full-year 2026 guidance, issued in the fourth quarter of 2025, remains largely unchanged. The company continues to expect slightly lower reported upstream production and broadly flat underlying upstream production. Capital expenditure is still projected in the range of $13-13.5 billion, weighted towards the first half of the year. The underlying effective tax rate is expected to be around 40%.

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The update, published on April 8, flagged significantly higher Marketing adjusted earnings compared to the first quarter of 2025, stronger trading and optimisation in both Chemicals and Renewables, and an indicative refining margin of $17 per barrel, up from $14 per barrel in the fourth quarter of 2025.

Shell also guided Renewables and Energy Solutions’ adjusted earnings of $0.2 billion to $0.7 billion, up from $0.1 billion in the prior quarter.

The update also reflected the impact of the Middle East conflict, with Integrated Gas production guided lower to 880,000 to 920,000 barrels of oil equivalent per day, compared to a prior quarterly outlook of 920,000 to 980,000, due to disruptions to Qatari volumes.

Shell warned the entire outlook is subject to increased uncertainty given the conflict.

TD Cowen’s modest target reduction comes amid mixed analyst sentiment on the stock.

Wells Fargo raised its target to $94 from $77 on April 9, keeping an equal weight rating, as it moved its long-term oil forecast to $75 Brent following the ceasefire announcement. Rothschild & Co Redburn, however, downgraded Shell to neutral from buy on the same day with a 3,640 pence price target.

Shell is scheduled to publish its full first-quarter results on May 7.

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WE Soda, Magris Resources and U.S. Silica Holdings are among the firms interested in acquiring the assets, Bloomberg reported, citing people familiar with the matter who asked not to be named.

Binding offers are expected to be submitted by June, according to one of the people.

Rio Tinto’s California boron operations include a mine and processing facilities in the Mojave Desert town of Boron, a refinery and shipping facility at the Port of Los Angeles, and an Owens Lake mining operation near the Sierra Nevada mountains.

The assets meet approximately a third of global refined boron demand, according to the company.

Boron has a wide range of industrial and high-tech applications, including fertilizers, heat-resistant glass, renewable energy materials and the stabilization of permanent rare-earth magnets used in motors and electronics. The U.S. Geological Survey added boron to its critical minerals list in November.

The sale process aligns with the Trump administration’s push to boost domestic production of minerals deemed strategically important, Bloomberg reported. It also forms part of a broader streamlining effort under new Chief Executive Simon Trott.

Rio Tinto shares gained around 1.3% on Friday, with the stock up approximately 22.5% for the year-to-date.

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Brent crude plunged to around $96.70 per barrel, the S&P 500 closed 2.5% higher, and the Stoxx Europe 600 rose 3.9%. Gold also initially rallied before pulling back while the US dollar index slipped.

UBS said the ceasefire supports its case for equities to end the year higher, reiterating a year-end S&P 500 target of 7,500, which is roughly 10% above current levels, with projected earnings per share growth of 11%.

The bank’s preferred regional equity markets are the US, Switzerland and emerging markets, with health care, industrials and US utilities favored at the sector level.

Despite the positive developments, UBS cautioned that significant risks remain. Iran’s Revolutionary Guard stated that Strait passage must be conducted “in coordination with Iran’s armed forces,” and key issues, including nuclear enrichment limits and sanctions relief, remain unresolved.

“Oil prices will remain the key barometer of economic and market risks and will continue to guide our positioning with respect to the conflict,” UBS said.

On gold, UBS maintained a year-end target of $5,900 per ounce, describing the metal as a valuable portfolio hedge.

The bank also flagged the energy price pullback as an opportunity to build broad commodity exposure as a hedge against re-escalation, and recommended short- and medium-duration quality bonds as yields remain above pre-conflict levels.

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Exdensur is now the first and only ultra-long-acting biologic available in China for CRSwNP, offering a new treatment option for patients who have not achieved adequate disease control with existing therapies like systemic corticosteroids and/or surgery. This approval follows the recent green light for Exdensur as a maintenance treatment for severe asthma in China, further solidifying its position in the respiratory disease market.

The NMPA’s decision was based on data from the ANCHOR-1 and ANCHOR-2 phase III trials. These trials demonstrated clinically meaningful and statistically significant improvements in nasal polyp size and nasal obstruction among patients treated with Exdensur. Specifically, the trials showed a notable reduction from baseline in nasal polyp score at 52 weeks (ANCHOR-1 p<0.001 and ANCHOR-2 p=0.004) and in nasal obstruction over weeks 49-52 (ANCHOR-1 p=0.047 and ANCHOR-2 p=0.025).

The positive clinical trial results and subsequent approval address a significant unmet need in the CRSwNP treatment landscape. Almost half of all patients with CRSwNP remain uncontrolled, and a substantial proportion exhibit underlying type 2 inflammation, which is associated with more severe disease. Exdensur’s ultra-long-acting mechanism, requiring only two doses per year, could provide sustained suppression of type 2 inflammation, offering considerable relief to patients facing debilitating daily symptoms.

Kaivan Khavandi, SVP, R&D Head Respiratory, Immunology & Inflammation (RI&I), and Head of Translational & Development Sciences, GSK, said: “Given the continued unmet need amongst patients with CRSwNP, today’s approval of Exdensur could redefine care by protecting from the debilitating symptoms of this disease in just two doses a year. This builds on Exdensur’s recent approval in severe asthma, which means more patients in China could have access to this first and only ultra-long-acting biologic.”

Analyst Summary: Bull and Bear Cases

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In its latest CIO update, UBS noted that global equities fell sharply while Brent crude climbed as markets reacted to rising uncertainty.

The S&P 500 dropped around 1.7% on Thursday and again on Friday, while US Treasury yields jumped to their highest level since last July.

UBS said the backdrop remains volatile as “the future development of the conflict remains uncertain and risks are elevated.”

Despite the market pullback, the bank warned against reactionary portfolio moves, explaining that investors are “best served by staying invested,” emphasising that market timing is both difficult and costly.

The firm expects the macro environment to stabilise later in 2026 as inflation cools and the Federal Reserve becomes more comfortable easing policy.

Diversification, UBS added, remains the “cornerstone of portfolio management.” The bank sees opportunities to lock in elevated short-term rate expectations through short-duration quality bonds and continues to favour structural growth and defensive equity segments, including Swiss equities and European healthcare.

“Within equities, we believe investors should retain strategic exposure overall, and consider structural growth and defensive segments such as Swiss equities and European health care,” the bank stated.

UBS also reiterated the importance of hedging, arguing that gold remains an effective portfolio hedge, particularly if higher energy prices slow global growth. Exposure to oil and broad commodities may also help diversify returns.

Overall, UBS urged investors to avoid trading geopolitical swings, saying they should “focus on their personal financial objectives and stick to an investment plan” as markets navigate the latest bout of uncertainty.

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In its March multi-asset update, the firm said it “maintain[s] our positive view on equities,” noting that while volatility may stay elevated, “fundamentals remain supportive.”

Schroders entered the conflict overweight equities and commodities and underweight bonds, positioning for a benign cycle with inflation risks tied to fiscal stimulus and supply-chain restructuring.

The firm remains neutral on the UK stocks, saying there are “few clear catalysts for growth,” while political uncertainty continues to weigh on sentiment despite the potential resilience to AI disruption. Schroders also remains neutral on Europe (excluding the UK), saying that “despite a supportive fiscal backdrop, the market faces headwinds due to energy price sensitivity and large banking exposure.”

Schroders has now closed its overweight stance on international value stocks, citing vulnerability among financials, but said it still sees “upside to equities as we see low risk of recession.” To reduce risk, it has trimmed cyclicality and increased exposure to the U.S. dollar.

It has taken profit on commodities, arguing that after the oil price spike “the outlook is more balanced from here.” However, it added that this does not signal the end of volatility, as investors must assess how central banks respond to “this stagflationary shock.”

On regional equity preferences, Schroders remains positive on the United States, highlighting earnings growth and a resilient consumer. It upgraded emerging markets, particularly Asia, where technology-linked economies stand to benefit from tailwinds around artificial intelligence.

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Analysts at Morgan Stanley said the route back to pre-conflict crude levels is narrowing and lifted their 2027 Brent forecast to $80 a barrel.

Incorporating updated commodity assumptions and expected disruption effects, the bank said it now sees 2026 earnings for the European majors running about 100% higher than previously expected, with 2027 estimates around 50% stronger.

Against that backdrop, the bank upgraded BP to Overweight from Equal Weight, raising its price target to $49.40 from $36.20. Analysts said higher-beta names stand to benefit most from the firm’s revised sector stance, which has been lifted to Attractive.

Shell moved the opposite way. Morgan Stanley cut the stock to Equal Weight from Overweight, even as it raised its price target to $95.50 from $80.20. Analysts said the reshuffle reflects a preference for companies offering greater leverage to improved commodity dynamics rather than a negative view of Shell’s fundamentals.

Repsol and Equinor also saw upgrades, while Galp Energia was lowered to Equal Weight. TotalEnergies remained an Overweight and a top pick with a higher target price.

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In a recent note headed by the bank’s Chief Investment Office, UBS noted that markets have come under pressure “amid an escalation in strikes against energy infrastructure across the Middle East,” sending crude sharply higher and weighing on equities.

UBS pointed to the spike in Brent crude after Iran struck major facilities in Qatar and the United Arab Emirates, while WTI “tested USD 100/bbl.” The S&P 500 dropped 1.4% to its lowest level since November, with Asian equities also sliding.

Political tensions remain at the forefront. UBS highlighted that President Trump urged de-escalation but also threatened “massive” retaliation if Iran launches additional strikes on regional energy assets.

UBS added that Saudi officials cautioned their patience with Iran is “not unlimited,” raising the risk of a broader confrontation.

Despite the turmoil, UBS’s base case still calls for eventual de-escalation and a reopening of tanker flows through the Strait of Hormuz.

Even then, it expects crude to “remain elevated, trading around USD 90/bbl into end June.” But in a risk scenario, UBS warned Brent “could overshoot… to USD 150/bbl or higher.”

The bank flagged concerns that extensive damage at Qatar’s Ras Laffan LNG hub could delay repairs beyond peak winter demand, potentially tightening global supply.

UBS also cautioned that energy-importing markets, particularly in Asia and parts of Europe, could face sharper drawdowns if the crisis persists.

Policymakers, UBS said, now face a “tightrope” as higher energy costs threaten to fuel inflation and weigh on growth.

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The regulatory green light follows a rigorous seven-month application and assessment process that concluded with Ofgem approving Tesla Energy Ventures Limited as an electricity supplier on March 12. The license enables Tesla to supply power to both domestic and commercial customers across England, Scotland, and Wales, positioning the company to compete directly with established players including Octopus Energy and British Gas.

Tesla submitted its initial application in July 2025, with plans to launch services throughout 2026. The strategic rationale centers on integrating the company’s existing product ecosystem, including Powerwall battery storage units and its fleet of electric vehicles, to create a comprehensive energy management solution for consumers. This approach would allow households to generate, store, and control their own electricity consumption while potentially selling excess power back to the grid, offering the prospect of reduced overall energy costs.

The move represents a calculated diversification of Tesla’s revenue streams at a time when the company faces mounting competition in the electric vehicle sector. By leveraging its technological capabilities and established customer relationships, Tesla aims to transform from purely an automotive manufacturer into a full-spectrum energy solutions provider. The UK market presents an attractive entry point, having experienced significant upheaval over the past decade with numerous new entrants challenging traditional utility models.

Markets responded positively to the announcement, with the stock trading at 395.01 USD in regular hours, down 12.73 USD or 0.03% from the previous close, though the pre-market bump suggests sentiment around the UK energy play remains constructive. The latest trade occurred Friday, March 13, at 01:47:03 PDT.

The UK expansion aligns with Tesla’s broader vision of accelerating the transition to sustainable energy globally. The company has long positioned itself as more than a car manufacturer, with CEO Elon Musk frequently emphasizing the interconnected nature of electric vehicles, solar generation, and battery storage in creating a sustainable energy ecosystem. The electricity supply license provides Tesla with the final piece needed to offer British consumers a complete end-to-end energy solution.

The timing of Tesla’s market entry coincides with ongoing volatility in UK energy prices and continued policy focus on decarbonization targets. Whether Tesla can successfully translate its brand strength and technological prowess into competitive advantage against entrenched utility providers remains to be seen, but the regulatory approval removes a significant barrier to entry and validates the company’s strategic pivot into retail energy supply.

Tesla’s successful bid for a UK electricity license is a landmark moment, signaling a concrete step in its evolution from a car company to a diversified energy powerhouse. While the initial market reaction reflects investor optimism, the path ahead is fraught with challenges. Successfully navigating the complexities of the UK’s retail energy market will be a critical test of Tesla’s ability to execute on its broader vision of a sustainable energy future, and investors will be watching closely to see if this strategic pivot can deliver long-term value.

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