Investing.com -- UBS analysts see room for further gains in equity markets, buoyed by solid fundamentals and supportive macroeconomic data.by 0.3% this week—UBS points to a robust U.S. economy and the potential for Federal Reserve rate cuts as grounds for optimism.U.S. third-quarter GDP data revealed annualized growth at 2.8%, driven largely by consumer spending, which rose at a 3.7% rate, UBS noted.
This aligns with an annual GDP growth average of 2.5% over the past five years, based on recent BEA revisions, UBS analysts explained. These figures indicate the U.S. economy is on a sustainable growth path, limiting recession risks in the near term. “We expect 50 basis points of rate cuts for the rest of this year and a further 100 basis points of easing in 2025,” UBS stated, adding that past Fed rate cuts during periods of non-recession have historically benefited equities.UBS favors AI-linked semiconductor stocks and U.S. megacaps for their growth potential. With rate cuts on the horizon and AI as a growth driver, UBS remains bullish on U.S. equities, setting an S&P 500 target of 6,600 by the end of 2025.
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