Investing.com -- UBS expects global equities to extend their climb in 2026 as performance widens beyond technology and into more cyclical parts of the market.
Analyst Fabian Deriaz said "global equities continue to grind higher, albeit at a slower pace," but stressed that "performance continued to broaden, with cyclical regions and sectors sharply outperforming recently."
UBS maintains an Attractive view on equities, supported by what it calls a powerful mix of structural and macro catalysts.
Deriaz believes structural forces such as AI remain "important tailwinds," while the bank sees a "diversified exposure across the AI value chain, including the intelligence and application layer," as increasingly important as the focus shifts to monetization.
The bank's confidence in a cyclical recovery "is intact," underpinned by easing tariff risks, anticipated Federal Reserve rate cuts and "increasingly supportive fiscal policies."
UBS highlighted the "rare combination of supportive monetary and fiscal policies" across major economies, from the One Big Beautiful Bill Act in the U.S. to rising defense and infrastructure spending in Germany and pro-growth budgeting in Japan.
That backdrop "bodes well for earnings," with UBS forecasting "close to 12% EPS growth for MSCI AC World next year" and expecting performance to broaden through 2026.
UBS continues to emphasize diversification across regions and sectors. Beyond tech and utilities, it "particularly favor[s] banks globally," while adding U.S. consumer discretionary to its preferred list and highlighting European industrials.
Quantitative strategies, via the firm's new "Quant Pathways" series, are also recommended to enhance portfolio resilience.
Related articles
UBS sees 2026 marked by a broadening global stock rally
