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UBS stated on Thursday, as reported by CNBC, that the S&P 500 should reach 6,600 points in 2025 on the heels of easing inflation and a robust U.S. economy. The firm's analysts say key drivers for improved corporate earnings and higher equity valuations are rising to analysts' expectations for declining price pressures. But based on that optimistic forecast, experts also warn that risks including geopolitical uncertainties, sticky inflation and Fed policy jolts could derail it.
Restricting strategic stock selection, UBS recommends companies that it believes are in a better place to thrive in an environment of lower rates of inflation. Given the influence of macroeconomic trends and corporate earnings performance in driving market dynamics, investors are advised to be on their toes because of this.
UBS is optimistic about U.S. economic fundamentals and a recovery in global trade. However, UBS notes that there may be market corrections in a world of changing global landscapes. In their light, balanced portfolios become imperative but especially to offset the risks of potential volatility with potential growth opportunities.
This article first appeared on GuruFocus.