US stock futures dip as Trump’s firing of Cook sparks Fed independence fears
Investing.com -- In a note this week, UBS lowered its year-end target for the S&P 500 but remains optimistic about a recovery in U.S. equities, citing policy clarity, economic resilience, and AI investment as key drivers.
"We still believe that US stocks can recover and post gains for the year," the bank stated, despite recent economic weakness and tariff concerns.
Earlier in March, the S&P 500 fell into a correction, dropping over 10% from its February 19 peak.
UBS noted that such declines, when occurring within a bull market, are typically followed by strong rebounds.
"There have been 27 bull market corrections in the S&P 500 since 1943," UBS said, adding that historical patterns suggest investors could see healthy gains over the next three, six, and 12 months.
However, ongoing uncertainty surrounding the Trump administration’s tariff policies and government spending cuts has weighed on sentiment.
"The Trump administration’s tariffs and tariff threats (as well as the DOGE-related cuts to government spending) have sent consumer, business, and investor sentiment into a tailspin," UBS explained.
This uncertainty has slowed consumer and corporate spending, leading UBS to revise its full-year S&P 500 earnings estimate down from $270 (8% growth) to $265 (6% growth).
Consequently, the bank has trimmed its S&P 500 year-end target from 6,600 to 6,400.
Despite these concerns, UBS remains positive on long-term market fundamentals.
"Consumer and corporate balance sheets remain in good shape, there are more available jobs than unemployed people, and so far, layoffs have not moved up," the firm said.
Additionally, UBS sees AI-related investments as a strong structural growth driver that should support equity markets moving forward.