The Swiss investment bank UBS published its global investment outlook (2H26 Outlook) for the second half of 2026, presenting an optimistic and reasoned stance regarding the continuation of gains in global equity markets. According to the base scenario of the economists at the bank's Chief Investment Office (CIO), the S&P 500 index is expected to continue climbing and reach a level of 8,200 points by June 2027 – a figure reflecting a total return of close to 10 percent from current levels.

The bank notes that the rally in the first half of the year was clearly led by semiconductor stocks, semiconductor equipment, and memory companies related to the worlds of artificial intelligence (AI). Although questions are arising in the market as to whether expectations surrounding AI have gone too far, UBS continues to view this technology as a powerful structural investment opportunity.

According to the bank's estimates, global capital expenditure (Capex) in the AI sector will jump by 68 percent in the current year and stand at approximately $820 billion, and will continue to grow by an additional 21 percent in 2027 to a level of about $990 billion. Major cloud companies reported accelerated growth of 40 percent in the first quarter and pre-orders of computing resources totaling $2 trillion.

However, the core message from UBS for the second half is that the rally is expected to expand beyond the technology sector. The bank's economists emphasize that the resilience of the US economy, the stable labor market, and the continuation of global fiscal spending will support corporate profits in traditional sectors as well, such as industrials and consumer stocks.

Alongside the optimism, UBS warns of a significant risk in the public's investment portfolios: Overconcentration. An analysis conducted by the bank reveals that close to 40 percent of investors who manage their stock portfolios on their own on the platform hold more than half of their portfolio in 10 stocks or fewer. In light of the widening performance gaps between individual stocks, the bank highly recommends diversifying portfolios broadly across regions, sectors, and investment styles.

On the macro and interest rate front, the consumer price index in the US indeed reached a three–year high in May at a level of 4.2 percent, but the pace of wage growth stood at only 3.4 percent. Consequently, UBS estimates that the Federal Reserve will not raise interest rates further, and may resume interest rate cuts in the first half of 2027, down to a level of 3 to 3.25 percent (compared to 3.5 to 3.75 percent today).