UBS warns: US stocks are about to fall! Now is the S&P 500's annual high point, looking at 6100 points by the end of the year

According to the Zhitong Finance APP, on August 12, UBS raised its target for the S&P 500 index from 5,500 points to 6,100 points by the end of 2025 in its global strategy report "Micro Confidence, Macro Headwinds: Where is the S&P 500 Heading?" The target for the end of 2026 was raised from 6,100 points to 6,800 points. UBS believes that the market will decline in the short term and may even be below current levels by the end of 2025. However, UBS expects a significant rebound in the second half of 2026. UBS stated that the upward revision reflects that the health of the U.S. economy and businesses has been better than expected recently. The worst-case scenario regarding tariffs has not materialized, confidence in fiscal support, and a weaker dollar have alleviated the impact on earnings, while low interest rate spreads and continuous capital flows provide ongoing support. Looking ahead, UBS's data shows that previously anticipated adverse factors are arriving late, putting heavy pressure on the cyclical outlook. The combination of U.S. economic growth and inflation may worsen. In addition to lowering earnings growth expectations, this will also increase stock market volatility, posing challenges to momentum trading driven by capital flows and boosted valuations. Upside Risks: (1) Earnings surprises from technology and related companies exceed expectations—this could push the S&P 500 index up to 7,200 points; (2) Companies affected by tariffs maintain profit margins despite increased tariffs; (3) The impact of tariffs on U.S. inflation is much smaller than UBS expects; (4) Despite a decline in real disposable income, consumers continue to spend; (5) U.S. capital expenditures and industrial production rebound driven by domestic production reshoring, foreign direct investment, and the application of new technologies; (6) The Federal Reserve may adopt policies in response to tariffs that are more accommodative (dovish) than UBS expects; (7) A weaker dollar and stronger-than-expected global economic growth. Downside Risks: (1) Increased tariffs trigger retaliatory tariffs; (2) Companies that have been hoarding labor begin large-scale layoffs, harming consumer income and spending; As excess savings are depleted and growth in real disposable income stagnates, consumers significantly cut back on spending; (3) The Federal Reserve's interest rate cuts are less than expected, which would dampen market sentiment; (4) Rising import costs mean that company profit margins decline sharply from high levels; (5) A decline in confidence regarding the positive growth impact of the Inflation Reduction Act, industrial reshoring, and increased direct investment