economy

February 27, 2026

UBS downgrades the U.S. stock market. Here's what has the investment bank worried

UBS downgraded U.S. equities to "benchmark" in a fully invested global equity portfolio, saying factors that powered years of outperformance are starting to fade.

UBS downgrades the U.S. stock market. Here's what has the investment bank worried

TL;DR

  • UBS downgraded U.S. equities to "benchmark" due to fading performance drivers.
  • Dollar risk is a central concern, with forecasts of the euro rising against the greenback.
  • A weaker dollar historically leads to underperformance of U.S. equities.
  • Foreign markets are outperforming U.S. stocks in 2026, with significant gains in Japan and Europe.
  • Corporate buybacks are losing their edge, with U.S. buyback yields now on par with global peers.
  • U.S. stock valuations are significantly higher than international peers.
  • Policy volatility under President Donald Trump is seen as a headwind.
  • UBS still sees potential benefits from early-stage bubbles and AI adoption.
  • UBS has set a year-end target of 7,500 for the S&P 500.

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