Contrary to the rising bullish sentiment on Wall Street, Swiss financial giant UBS is taking a more cautious stance. Reports indicate that UBS’ top investment strategist has revised the firm’s outlook on U.S. stocks, shifting the rating from “attractive” to “neutral.” Investors are not being advised to exit the equities markets entirely. Instead, the strategist suggests leveraging recent stock market gains, viewing them as a potential opportunity following what was considered an excessive sell-off in early April linked to tariff concerns. This shift in perspective follows UBS’ upgrade of U.S. equities just last month, a period during which the S&P 500 has seen a significant climb of approximately 11%. The UBS strategist warned:
“While the 90-day cooling-off period has provided a reprieve, uncertainty is still high, and investors will soon begin to focus on whether this temporary fix can evolve into a lasting agreement. The constructive tone from both sides suggests a willingness to negotiate further, but challenges in forging a durable deal could lead to bouts of volatility.”
Nvidia (Nasdaq: NVDA) is taking its spot as a Big Tech leader, tacking on 5% in today’s trading session. The AI leader revealed it would be sending thousands of its AI chips to Saudi Arabia’s Humain. With a market cap of $3 trillion, Nvidia has gained 14.1% over the past five trading sessions and has narrowed its year-to-date decline to 3.4%.
Former stock market headwinds are turning into tailwinds. Wall Street firm Goldman Sachs has revised its 2025 stock market performance outlook upward. Goldman Sachs Chief U.S. Equity Strategist David Kostin increased his 2025 S&P 500 prediction to 6,100, up from a former 5,900, suggesting upside potential of approximately 4% from current levels. He wrote: “We raise our S&P 500 return and earnings forecasts to incorporate lower tariff rates, better economic growth, and less recession risk than we previously expected.”
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The markets are stalling as they process the latest inflation data coupled with the trade progress between the U.S. and China. The economy appears to be headed in the right direction, as the annual inflation rate fell to 2.3% in April, representing its lowest threshold since 2021. For the month, the Consumer Price Index (CPI) rose by a mere 0.2%, while prices for eggs, a common grocery item, fell by just over 12%. The inflation data was better than expected considering April followed a period of heightened trade tensions, with a truce and tariff reductions announced in May.
The Nasdaq Composite is looking to extend yesterday’s gains, as Big Tech delivers a mixed performance. Amazon (Nasdaq: AMZN | AMZN Price Prediction) and Nvidia (Nasdaq: NVDA) are each tacking on about 2% today, while Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL) are off fractionally.
Ed Yardeni, of the research firm that bears his name, has lowered the chances of a U.S. recession and raised his S&P 500 year-end target to 6,500 in response to the Trump administration’s ability to successfully navigate tariff deals.
Here’s a look at the performance as of morning trading:
Dow Jones Industrial Average: Down 199.63 (-0.47%)
Nasdaq Composite: Up 91.95 (+0.50%)
S&P 500: Up 5.80 (+0.10%)
Coinbase (Nasdaq: COIN) is soaring by 15% after further validating the cryptocurrency industry with a spot in the S&P 500.
UnitedHealth Group (NYSE: UNH) is suffering a 12% decline amid further turmoil in the C-Suite. The healthcare giant announced CEO Andrew Witty would be leaving his post, owing to personal reasons. The company has named Stephen Hemsley as Witty’s successor. Brian Thompson, former CEO of UnitedHealthcare (a division of UnitedHealth Group), was fatally gunned down in 2024. UnitedHealth has suspended its 2025 outlook.
Raymond James has started coverage of Super Micro (Nasdaq: SMCI) with an “outperform” rating, calling it a “nearly pure AI play.”
Goldman Sachs upgrades shares of Valero Energy (NYSE: VLO) from “neutral” to “buy” with a price target of $154 attached, reflecting upside potential of 15%.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
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