UBS has sustained its "attractive" outlook for global equities, citing resilient growth, solid earnings, and increasing investment in artificial intelligence (AI) as supportive factors for markets. The bank forecasts that the MSCI All Country World Index will rise to 1,460 by December 2026 and 1,510 by June 2027, up from 1,359 on September 14, 2026.

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Despite the rise in bond yields, UBS noted that markets have continued to perform well, driven by healthy earnings growth, strong investment spending, robust consumer demand, and improving manufacturing activity. AI is identified as the primary driver of earnings growth, with major tech companies maintaining aggressive capital spending and realizing significant returns on their investments.

In the United States, UBS anticipates further tightening by the Federal Reserve due to inflation remaining above target; however, they do not forecast that higher interest rates will significantly impact corporate profitability or economic activity. They see potential for further gains in the S&P 500 through mid-2027.

Conversely, UBS indicated that recent market weaknesses in Europe stem from concerns about rising energy prices, elevated interest rates, and widening sovereign spreads. Nonetheless, they predict a growth of 15% in eurozone earnings for both 2026 and 2027 as valuations adjust.

Meanwhile, Asia and emerging markets face challenges due to higher oil prices, increased bond yields, and a stronger US dollar, yet UBS believes that current valuations reflect much of this negative sentiment. In a more optimistic scenario, they project the index could reach 1,670 by June 2027 if AI investments surpass expectations, the Strait of Hormuz is fully reopened, there is a ceasefire between Russia and Ukraine, or the effective US tariff rate drops below 10%. Conversely, under a pessimistic scenario, the index could fall to 990 by June 2027 if conflicts escalate, AI investment returns disappoint, there is a decline in spending, and central banks enact aggressive interest rate cuts in 2027.

UBS expects volatility in the market and advises investors to monitor power availability, data center permitting, and access to private capital that supports a significant portion of AI demand. They recommend capitalizing on volatility to increase exposure to AI, power resources, and longevity.