UBS On-Air: House View

A sharp sell-off in semiconductor stocks has reignited questions about the durability of the AI trade. But with earnings expectations still strong, cloud growth accelerating, and valuations becoming more attractive, we take this as more of a reset of expectations than a break in the AI thesis.

Higher energy prices and geopolitical risks may fuel near-term volatility, but AI demand, a healthy cyclical economy, and resilient consumer spending should support another strong quarter for S&P 500 profits.

Geopolitical and macro uncertainties are driving near-term commodity volatility, but tight supply and durable demand remain supportive of the outlook. We see broad commodity exposure as a source of returns, diversification, and portfolio resilience.

Recent adoption, semiconductor revenue, and cloud-growth data continue to point to healthy AI demand. While volatility may persist as the trade matures, investors should maintain diversified exposure while becoming more selective.

US stocks eased from record highs as elevated Treasury yields, rising oil prices, and renewed geopolitical risks weighed on sentiment. But waiting for these concerns to fade could mean missing further market gains. We believe investors should remain positioned for long-term growth through a well-diversified portfolio.

The S&P 500 reached a record high despite ongoing market risks. We think AI investment, broadening earnings growth, and a resilient US economy should support further gains. Investors should maintain diversified equity exposure across sectors and regions.

The Nasdaq reached a record high despite elevated Treasury yields, but the rally remains concentrated in a narrow group of large technology companies. Investors should maintain diversified core equity exposure as they position for further upside.

Lower oil prices and softer US jobs data have reduced immediate concerns about further Federal Reserve tightening, but geopolitical risks and elevated bond yields could keep markets volatile. We recommend positioning for further equity gains while diversifying and managing concentration risk.

The sell-off in US Treasuries reflects growing concern that inflation and policy rates could remain elevated. While further disinflation, easing energy pressures, or policy intervention may slow the rise in yields, volatility is likely to remain high in the near term. Investors should calibrate duration and credit risk carefully.

Long-dated Treasury yields have risen to multi-decade highs. But resilient growth, robust earnings, and accelerating AI adoption should help equities absorb the valuation pressure from higher yields. We continue to recommend positioning for further equity gains through broad sector and regional diversification.

Higher interest rates can be a headwind for many investments, but they can also create a more favorable environment for hedge funds. A higher cost of capital increases differences among companies, economies, and securities, giving active managers more opportunities to identify relative leaders and laggards.

Potential delays at a major US data center have intensified scrutiny of AI infrastructure financing. We don’t see this as a risk to compute demand itself, but if it widens, it could affect deployment timelines, funding costs, and investment returns. We continue to favor diversified thematic exposure to both the AI and Power and resources opportunities across public and private markets, with an emphasis on quality and balance-sheet strength.

Strong US activity, higher oil prices, and a weak Treasury auction pushed the 10-year yield above 5.1% and weighed on equities. But we expect less Fed tightening than markets currently price, while resilient growth and robust earnings should help risk assets absorb measured rate increases.

Strong US activity, higher oil prices, and a weak Treasury auction pushed the 10-year yield above 5.1% and weighed on equities. But we expect less Fed tightening than markets currently price, while resilient growth and robust earnings should help risk assets absorb measured rate increases.

Oil prices fell on signs of progress in US-Iran talks, but geopolitical and market risks remain. We expect equities to rise further, although periods of volatility are likely. Investors can strengthen portfolios with capital preservation strategies, broad commodities, and alternatives.

The rapid early adoption of Meta’s Muse highlights the potential for consumer AI agents to expand monetization channels. We see rising adoption supporting hyperscalers’ returns on AI investment and strengthening demand across the semiconductor and hardware value chain.

Welcome to CIO Jumpstart, your guide to the main market events coming up in the week ahead. Today we ask the following three questions: 1. Can equities withstand higher yields after the Fed’s hawkish increase? 2. How far will Europe’s policy shift extend after the Fed rate hike? 3. Will progress in the Middle East ease pressure on oil prices?

While elevated oil prices and renewed monetary tightening are testing investor confidence, cash alone is unlikely to deliver the long-term returns needed to offset inflation, taxes, withdrawals, and longevity. Investors should maintain near-term liquidity while putting excess cash to work in diversified portfolios.

The Fed’s hawkish rate hike has led markets to price in more tightening. We believe this repricing creates opportunities in fixed income, but investors should remain selective on duration and credit risk.

Wednesday may see the Fed kick off a new tightening cycle in the US. For portfolios, the key questions concern earnings resilience, market pricing, and diversification.

Stronger safeguards need not derail the AI rally. We still favor diversified exposure across the AI value chain.

Welcome to CIO Jumpstart, your guide to the main market events coming up in the week ahead. Today we ask the following three questions: 1. Will the Fed signal more hikes to come? 2. Will other central banks follow the ECB’s hawkish lead? 3. Can robust AI demand reinforce broader economic resilience?

Rising oil prices and Treasury yields are testing investor confidence, but equities have remained resilient. We believe solid economic growth, robust earnings, and strong AI investment should help stocks withstand higher rates. We remain constructive on equities and recommend broad exposure across sectors and geographies.

Brent crude rose above USD 100/bbl on Wednesday as geopolitical tensions and tightening physical supplies support prices. But we believe strong earnings growth, sustained AI investment, and diversified portfolio exposure can help global markets withstand higher energy costs.

Gold may face near-term pressure from higher interest rates and a stronger US dollar, but we believe its long-term investment case remains intact. Robust central bank buying, fiscal concerns, and demand for protection against inflation and geopolitical risks reinforce its role as a portfolio diversifier.

Welcome to CIO Jumpstart, your guide to the main market events coming up in the week ahead. Today we ask the following three questions: 1. Will inflation temper the Fed’s hawkish turn? 2. Will the ECB signal that its hiking cycle will be limited? 3. Can market gains continue to broaden beyond technology?

Economic growth has stayed resilient, earnings are strong, and AI-related investment continues to support activity. Against that backdrop, the possibility of rate hikes has increased, supported by comments from Fed officials that inflation may not be moving down fast enough. But investors should not mistake a potential change in Fed policy for a change in the investment outlook. If rates move higher while economic growth, employment, and profits remain strong, many of the forces supporting portfolios should remain intact. We maintain a constructive view on global equity markets.

Broadcom’s stronger AI-chip outlook has reinforced confidence that demand for AI infrastructure remains robust. But elevated government bond yields, geopolitical risks, and the potential for excessive reliance on a narrow group of technology stocks reinforce the importance of diversification. Against this backdrop, we advise investors to position for further market gains by broadening equity exposure, considering capital preservation strategies, and investing in the power, resources, and infrastructure required to support the AI buildout.

Rising oil prices and shifting central bank expectations have pushed global yields higher, but currency markets are responding selectively. We favor carry opportunities backed by sounder fundamentals, and believe investors should focus on building robust, diversified, and risk-managed portfolios.

Renewed conflict in the Middle East and elevated oil prices have intensified pressure on global bond markets. We expect volatility to persist, but see scope for short-dated yields to decline as inflation moderates and the Fed remains on hold.

Welcome to CIO Jumpstart, your guide to the main market events coming up in the week ahead

Investors are looking to Fed Chair Kevin Warsh’s Jackson Hole speech for clues on the path of interest rates. But sticky inflation, geopolitical risks, and strong AI investment could keep policy uncertainty elevated.

This week's pullback in longer-term interest rates looks more like a pause than a reset. Behind the move sits a deeper shift in how investors price growth, policy uncertainty, and government debt.

As investors look to NVIDIA’s earnings later today, we see supportive AI fundamentals across demand, monetization, and earnings trends. We continue to favor a selective, diversified allocation focused on AI enablers and defensive technology segments.

Markets have continued to climb higher, supported by strong corporate earnings, robust AI-related investment, and expectations that inflation can ease gradually. But the outlook is not dependent on one factor alone. The durability of AI capex, evidence of monetization, the breadth of earnings growth, and the path of inflation and monetary policy will all be important in determining whether the constructive backdrop can continue. To discuss the latest market developments and portfolio implications, Kiran Ganesh, Global Head of Investment Communications, will be joined by Frederick Mellors, Head Fixed Income GAA, Rolf Ganter, Head CIO Equities Europe, and Andrew Dubinsky, US...

Renewed concerns about US government finances are adding pressure to the dollar. Gold, broad commodities, and select global currencies can help investors diversify dollar exposure and build more resilient portfolios.

Welcome to CIO Jumpstart, your guide to the main market events coming up in the week ahead

As long-term yields remain elevated, market adjustments may increasingly occur through currencies and commodities rather than bonds alone. A weaker US dollar could support gold and help ease financial conditions, while underpinning a diversified investment approach.

Markets have welcomed signs that US policymakers are willing to respond when bond volatility rises too far, too fast. But we think lasting stability in bond markets will ultimately depend on the underlying inflation, fiscal, and demand backdrop.

Global equities have remained under pressure amid concerns over higher bond yields, rising oil prices, and the outlook for AI capital spending. But we believe the outlook for stocks remains positive. Underlying inflation remains under control, and earnings growth has picked up. Against this backdrop, we continue to view equities as Attractive.