UBS Wealth on Tuesday moved to the sidelines on U.S. stocks, casting doubt on the recent rally even as others on Wall Street have grown more bullish. Mark Haefele, the firm’s investment chief, downgraded U.S. equities to neutral from attractive, noting he is not bearish or telling clients to sell but rather “taking advantage” of the runup in stocks over the past month after investors had grown too pessimistic in early April after the U.S. announced its new tariff policy. Haefele’s latest skepticism reverses an upgrade to U.S. stocks that he made on April 10, the day after President Donald Trump placed a 90-day pause on many tariffs he had imposed the week before. The S & P 500 has climbed about 11% since the UBS upgrade, making the risk-reward more balanced, Haefele said. The buyside chief investment officer also tied his call to Monday’s major leg up in stock prices following the announcement that China and the U.S. slashed reciprocal tariffs for three months. That helped ease short-term fears that Trump’s plan for steep tariffs was spurring a trade war between the world’s two largest economies. “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,” Haefele wrote to clients. “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.” Haefele recommended that clients keep a strategic allocation to U.S. stocks, expecting equities will rise over the next 12 months. The UBS shift on U.S. stocks puts it at odds with others on the Street who have recently become more upbeat. David Kostin, chief U.S. equity strategist at Goldman Sachs, raised his 2025 target for the S & P 500 back to 6,100 from 5,900 on Tuesday, citing lower tariff rates, an improved outlook for economic growth and reduced odds of a recession. Ed Yardeni, president of Yardeni Research, also lifted his S & P 500 target back up to 6,500 from 6,000, pointing to a shifting view around the effect of Trump’s tariff policy.
