UBS Sees S&P 500 Reaching 7,500 in 2026 on Strong Earnings Growth
UBS expects the S&P 500 to climb to 7,500 in 2026, supported by an estimated 14% rise in corporate earnings, with nearly half of that growth coming from technology stocks.
According to a research note released Monday, UBS analysts described the coming year as a “tale of two halves” for the global economy — a weaker start giving way to a stronger recovery in the second half of 2026. The bank anticipates that economic confidence will rebound and fiscal stimulus will play a key role in supporting growth.
However, UBS cautioned that in the near term, the U.S. and other advanced economies will need to navigate a soft patch, as tariffs continue to influence prices and exports.
Earnings to Drive S&P 500 Gains
UBS expects the U.S. market to lead global equity performance, forecasting around 10% returns in 2026. The bank emphasized that these gains will likely come from earnings growth rather than valuation expansion, suggesting that market multiples may contribute slightly negatively to total returns.
Still, UBS noted that risks to valuations remain skewed to the upside due to continued investor inflows.
The firm also predicts that the market rally will broaden beyond large-cap technology stocks by the second quarter of 2026, expanding into cyclical and lower-quality equities following a brief consolidation phase earlier in the year.
Global Markets Outlook
UBS expects Europe and emerging markets to post solid earnings and approximately 8% returns, though both regions are projected to underperform U.S. equities slightly.
The bank concluded its outlook by reaffirming a preference for equities over bonds, stating that “better risk-reward exists in stocks than in credit” heading into the new year.
