Why the 2025 stock market rally can continue in 2026, according to UBS
UBS expects S&P 500 earnings per share to rise about 10% in 2026, a growth rate that it says could lift the index to roughly 7,700 by the end of next year.
TL;DR
- UBS predicts the U.S. stock market rally will extend into 2026.
- The rally is attributed to earnings growth, not frothy valuations.
- Corporate earnings have exceeded expectations, particularly in the technology sector.
- UBS forecasts a 10% rise in S&P 500 earnings per share for 2026, potentially lifting the index to 7,700.
- Further interest-rate cuts are expected from the Federal Reserve, with another likely in Q1 2026.
- A new Fed chair could reinforce a dovish monetary policy shift.
- An upcoming Supreme Court ruling on President Trump's tariff authority may reduce uncertainty.
- UBS advises investors to stay committed to stocks and position for further gains.