UBS: Expects S&P 500 Index Rally to Continue Amid Rate Cut Expectations and AI Investment

October 15th. This week, UBS declared that owing to robust growth, the anticipation of a Fed rate cut, and substantial AI investments, the upward trajectory of the S&P 500 index is anticipated to persist. The bank forecasts a third-quarter earnings per share (EPS) growth rate of approximately 10%. The factors are as follows: · Resilient Consumer Spending: Although the labor market has moderated to some extent, it remains stable, with low layoffs, continuous wage increments, and a healthy number of job vacancies. UBS considers this will offer support for the economy and corporate profits. · Strong AI Investment Momentum: The application of artificial intelligence technology and related expenditures continue to expand. UBS anticipates that cloud service providers will achieve vigorous revenue growth, and the earnings expectations for AI infrastructure-related companies are also being revised upward. · Policy Support and Positive Earnings: The Fed's rate cut, coupled with ongoing corporate profit growth, have jointly created a favorable setting. UBS believes that the forthcoming earnings season will reinforce the foundation of this bull market.