Live Markets: UBS says US stocks can climb further after record highs

Marvell Technology

07/10/2026 18:08

Main US indexes red; Dow off most, down ~0.7%
Industrials weakest S&P 500 sector; just healthcare, staples positive
Dollar rallies; US crude off ~1%; gold down >1%; bitcoin down >2%
US 10-year Treasury yield hits 5.3645%, now ~5.28%
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UBS SAYS US STOCKS CAN CLIMB FURTHER AFTER RECORD HIGHS
US stocks can climb further after the S&P 500 reached a fresh record high this week, supported by strong artificial intelligence investment, broadening corporate earnings growth and a resilient economy, according to UBS analysts led by Ulrike Hoffmann-Burchardi.
The benchmark S&P 500 .SPX reached a new record closing high on Tuesday for the first time since August. The advance came despite ongoing conflict in the Middle East and elevated US Treasury yields.
UBS said renewed strength in AI-related stocks has helped power the latest rally, with recent product launches and growing adoption boosting investor confidence. Stronger long-term revenue forecasts from chipmaker Marvell Technology MRVL.O are an example that demand for AI infrastructure remains robust, the bank said.
The earnings growth story is becoming increasingly broad-based rather than concentrated solely in AI-related technology shares, UBS argued. It expects S&P 500 earnings to rise 25% in 2026 and a further 14% in 2027, with gains supported by consumer discretionary companies, financial firms and industrial businesses.
"Resilient consumer spending should support consumer discretionary, robust capital market activity and a recovery in loan growth should benefit financials, and cyclical manufacturing improvement should lead to solid growth in industrials," the bank said.
Furthermore, resilient US economic growth should enable equities to absorb the impact of higher interest rates, UBS said. While the US trade deficit widened in August, the bank said strong imports reflected solid consumer demand and continued business investment, including spending tied to AI. UBS forecasts US economic growth of 2.2% this year and 2% in 2027.
"With current economic conditions consistent with continued expansion, we believe earnings growth can offset some of the valuation pressure from higher interest rates," the bank said.
Overall, UBS maintained its bullish outlook, forecasting that the S&P 500 would reach 8,400 by June next year. "Investors should remain positioned for market upside," the bank said.
     
(Chibuike Oguh)
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