UBS expects market performance to remain anchored in economic fundamentals, with investors increasingly focused on data rather than reacting to trade headlines. While the full impact of Trump’s tariffs has yet to emerge, the bank notes that
- corporate profits continue to grow,
- consumer spending remains resilient,
- and the risk of an imminent recession appears low.
With the Federal Reserve poised to resume rate cuts in the coming months, UBS believes fundamentals should continue to support markets. The bank’s base case is for the U.S. effective tariff rate to settle around 15% — a level that could temper growth and push inflation higher, but not enough to derail the economy or end the equity rally.
UBS anticipates near-term volatility but advises investors to stay the course with long-term plans. For portfolio positioning, it suggests maintaining diversification across asset classes, using capital preservation strategies for a defensive tilt, or buying into market dips to build long-term exposure.
