Will the S&P 500 achieve a new leap? UBS raises its expectations despite surrounding risks

UBS's Global Wealth Management unit raised its forecast for the U.S. S&P 500 index for 2025, in a move that reflects greater optimism towards the performance of U.S. stocks during the remaining period of the year, driven by improved economic outlook and increased bets on interest rate cuts by the Federal Reserve.

The report stated that the unit raised its target for the S&P 500 index to 5900 points, compared to a previous estimate of 5600 points, meaning that it sees more gains ahead for U.S. stocks, even though the index has already achieved strong increases since the beginning of the year exceeding 17%.

This adjustment, according to UBS, is due to several key factors; foremost among them is the clear resilience shown by the U.S. economy in terms of consumer spending and the labor market, in addition to the gradual decline in inflation levels that has given the markets greater confidence in the possibility of starting a monetary easing cycle before the end of 2025.

The report also pointed out that major U.S. companies, especially in the technology and healthcare sectors, showed quarterly results better than expected, supporting the optimistic climate regarding the continuation of profit growth in the coming quarters. It also indicated that a potential interest rate cut would ease borrowing costs and boost stock valuations.

Despite this positive outlook, UBS warned of some risks that could limit the rise, such as the ongoing uncertainty regarding U.S. trade policy amid tensions with some partners, as well as the possibility of inflation rising again if the labor market remains tighter than expected.

It is worth mentioning that the S&P 500 index closed its trading yesterday near 5575 points, approaching its all-time highs, putting the market in direct confrontation with the expectations of major investment houses. Thus, UBS joins other financial institutions like Goldman Sachs and Morgan Stanley, which also raised their targets for the index, signaling that Wall Street continues to bet on an extended upward wave for U.S. stocks.