UBS upgrades US equities on evidence of 'Trump put'
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The news: UBS has upgraded its recommendation on US equities from 'neutral' to 'attractive', seeing limited risk of a more severe economic downturn after Wall Street stocks plunged in response to escalating US tariffs.
The numbers: UBS raised its downside scenario S&P 500 price target to 4,500, up from 4,000. The benchmark index last closed at 5,268.05.
The context: UBS said the "Liberation Day" tariff announcements last week were "harsher than expected" and have led to an escalating trade war between the US and China.
However, US President Donald Trump's 90-day pause on "reciprocal tariffs" for other countries, announced on Wednesday, demonstrates a willingness by the US government to change its stance in response to equity and bond market turbulence.
This indicates some sensitivity to market stress, UBS said, and points to the existence of a "Trump put" in some form.
The source: UBS research
