{"id":439658,"date":"2026-10-08T07:00:17","date_gmt":"2026-10-08T00:00:17","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/ubs-sees-sp-500-at-8400-by-june-as-ai-and-earnings-extend-record-rally-439658\/"},"modified":"2026-10-08T07:00:17","modified_gmt":"2026-10-08T00:00:17","slug":"ubs-sees-sp-500-at-8400-by-june-as-ai-and-earnings-extend-record-rally","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/ubs-sees-sp-500-at-8400-by-june-as-ai-and-earnings-extend-record-rally-439658\/","title":{"rendered":"UBS sees S&amp;P 500 at 8,400 by June as AI and earnings extend record rally"},"content":{"rendered":"<div>\n<p dir=\"ltr\">UBS&#8217;s call favours staying invested but spreading exposure. It points to consumer discretionary, financials and industrials as beneficiaries of broadening earnings, and to health care and utilities as defensive holdings with structural growth. The bullish case rests heavily on earnings outpacing valuation pressure, which leaves equities vulnerable if bond yields climb further or oil spikes on <a href=\"https:\/\/investinglive.com\/commodities\/axios-pentagon-orders-readiness-for-possible-iran-strikes-as-trump-weighs-timing\/\" rel=\"follow\">renewed Middle East conflict<\/a>. For AI hardware and data centre suppliers, the forecast surge in capex supports the leadership trade, but it also concentrates risk should spending plans be scaled back. Positioning for upside alongside capital preservation strategies reflects a view that volatility is likely even if the trend holds.<\/p>\n<p dir=\"ltr\">&#8211;<\/p>\n<p dir=\"ltr\"> UBS argues the S&amp;P 500 can keep climbing through <a href=\"https:\/\/investinglive.com\/central-banks\/icymi-fed-minutes-most-officials-see-another-hike-by-year-end-after-unanimous-rise-to-3-75-4\/\" rel=\"follow\">Fed hikes <\/a>and high yields because earnings are growing fast enough, and across enough sectors, to carry the market.<\/p>\n<p dir=\"ltr\">Summary:<\/p>\n<ul dir=\"ltr\">\n<li>The S&amp;P 500 rose 0.6% on Tuesday to its first record high since August, taking its gain this year to about 14%, despite Middle East conflict and Treasury yields at multi-decade highs<\/li>\n<li>UBS expects the rally to continue and forecasts the index at 8,400 by June 2027<\/li>\n<li>It sees global AI-related capex growing more than a third to $1.2 trillion in 2027, citing strong demand for AI compute and infrastructure<\/li>\n<li>UBS forecasts S&amp;P 500 earnings growth of 25% this year and 14% in 2027, with gains broadening into consumer discretionary, financials and industrials<\/li>\n<li>It expects US GDP growth of 2.2% this year and 2% in 2027, enough to withstand modest Fed tightening<\/li>\n<li>Across 16 hiking cycles since 1954, the S&amp;P 500 rose an average of nearly 11% in the year after the first Fed hike<\/li>\n<\/ul>\n<p dir=\"ltr\">\n<p dir=\"ltr\">UBS expects the US equity rally to continue despite rising interest rates and conflict in the Middle East, forecasting the S&amp;P 500 will reach 8,400 by June next year, according to a note published before Wednesday&#8217;s US session.<\/p>\n<p dir=\"ltr\">The bank&#8217;s note followed a 0.6% gain in the S&amp;P 500 on Tuesday that lifted the index to its first record high since August and took its gain this year to about 14%. The record came even with Treasury yields holding at multi-decade highs and the Middle East conflict ongoing. UBS acknowledged that bouts of volatility are likely, but said AI investment, strong corporate profits and solid economic growth should support further gains.<\/p>\n<p dir=\"ltr\">Artificial intelligence remains the central driver in UBS&#8217;s view. Renewed strength in AI-related shares has powered the latest leg higher, helped by encouraging adoption of new models and products. The bank pointed to chipmaker Marvell&#8217;s raised fiscal 2028 revenue forecast, which topped Wall Street estimates on demand for custom data centre chips, as evidence of continued appetite for AI computing capacity, while stressing it was not taking a view on individual stocks. UBS forecasts global AI-related capital spending will rise by more than a third to $1.2 trillion in 2027. Consensus estimates put Nasdaq 100 earnings growth at 43% this year and 28% next year.<\/p>\n<p dir=\"ltr\">UBS also expects profit growth to spread beyond technology. It estimates S&amp;P 500 earnings will rise 25% this year and 14% in 2027. It sees resilient consumer spending supporting consumer discretionary stocks, active capital markets and a pickup in lending helping financials, and improving manufacturing lifting industrials. It also favours health care and utilities for their defensive qualities and structural growth prospects.<\/p>\n<p dir=\"ltr\">On the economy, UBS acknowledged that a wider US trade deficit in August, the largest since March 2025, could weigh on headline growth in the near term, but said strong imports reflect firm consumer demand and investment in AI-related equipment. It forecasts US growth of 2.2% this year and 2% in 2027, enough in its view to absorb modest Fed tightening. Historically, the S&amp;P 500 has gained an average of nearly 11% in the year after the first rate hike across 16 cycles since 1954.<\/p>\n<p dir=\"ltr\">Developments since the note will test that view. Fed minutes released on Wednesday showed most officials see another hike as likely by year end, US consumer inflation expectations rose, and Axios reported the Pentagon has readied options to resume strikes on Iran. Whether earnings growth can keep outrunning higher rates and oil risk will decide if UBS&#8217;s target is met.<\/p>\n<p dir=\"ltr\">\n<p>                            This article was written by Eamonn Sheridan at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>UBS&#8217;s call favours staying invested but spreading exposure. It points to consumer discretionary, financials and industrials as beneficiaries of broadening earnings, and to health care and utilities as defensive holdings with structural&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-439658","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439658","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=439658"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439658\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=439658"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=439658"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=439658"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}