UBS raises S&P 500 index’s annual target on fading trade tensions

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(Reuters) -UBS Global Wealth Management raised its year-end target for the S&P 500 index to 6,200 from its prior forecast of 6,000, banking on softening trade tensions and expectations of resilient quarterly earnings.

UBS’s current target implies about a 1% upside to the benchmark index’s last close of 6,141.02. Major brokerages Citigroup and Barclays also lifted their targets for the index earlier this month.

U.S. equities have been on a recovery rally as easing trade tensions boosted investor risk appetite, following a tariff-led sell-off spree in March and April.

“We think the recovery makes sense, considering that most large-cap companies should weather the tariffs reasonably well,” UBS said in a note late Thursday.

The wealth management unit of European bank UBS has maintained its ‘neutral’ stance on U.S. equities.

President Donald Trump’s administration in April imposed reciprocal tariffs on key trading partners, which rattled global financial markets, but has since then reduced some of the tariff rates on certain countries, including China.

“The good news is that growth and inflation should start to improve later this year once the economy adjusts to the one-time impact of the tariffs,” said UBS.

UBS also raised the index’s annual earnings-per-share (EPS) estimate to $265 from its previous projection of $260.

“We are expecting another resilient (Q2) earnings season and the budget reconciliation bill could also boost corporate cash flows which could be used for additional share repurchases or investment spending,” the wealth management unit said.

UBS also raised its 2026 mid-year index target to 6,500 from a prior view of 6,400, while also lifting the EPS forecast to $285 from $280.

(Reporting by Siddarth S and Rashika Singh in Bengaluru; Editing by Shreya Biswas)