UBS warns of energy risks but maintains a bullish outlook on global stock markets

LootboxPhobia · 2026-03-20T13:27:57+00:00

UBS maintains an "attractive" rating on energy assets in its report, despite global equities declining due to the US-Iran conflict. Despite rising geopolitical risks, UBS expects the situation to ease in the coming weeks and believes the macro environment supports global market growth, forecasting 12% earnings growth for the MSCI Global Index. The bank emphasizes the importance of diversified investment and recommends focusing on structural themes such as artificial intelligence.

LootboxPhobia

2026-03-20 13:27:57

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Investing.com - Since the outbreak of the US-Iran war, global stock markets have pulled back, but despite increased energy risks, UBS maintains an “attractive” rating for this asset class.

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In a report led by strategist Fabian Deriaz, UBS told investors, “If disruptions in energy flows persist, downside risks will increase,” and pointed out that the Strait of Hormuz has effectively been closed.

Nevertheless, the firm expects the situation to cool down “in the coming weeks” and believes the broader investment environment remains constructive.

UBS states that geopolitical shocks “tend to be quickly bought,” but emphasizes that diversification and risk management are crucial until energy flows normalize.

UBS believes the macro environment continues to support markets, citing “relieved tariff resistance, Federal Reserve rate cut expectations, and supportive fiscal policies.”

The firm expects the MSCI Global Index to achieve 12% earnings growth this year, with earnings growth expected to continue expanding until 2026.

UBS notes that rising oil prices could pressure growth, inflation, and central bank policies, but considers prolonged conflict unlikely, as “the political costs for the US to extend the conflict are high.”

If tensions ease, UBS expects the damage to stocks to be “manageable,” and believes key markets including the US, Eurozone, Japan, and emerging markets will continue to perform well.

Once volatility subsides, UBS anticipates investors will refocus on medium-term drivers such as “cyclical recovery” and developments in artificial intelligence and the US tech sector.

The bank continues to recommend diversified allocations across structural themes, including artificial intelligence, energy and resources, and longevity, while adopting a more selective approach within the AI sector.

UBS’s baseline scenario remains that “growth prospects are supportive,” reaffirming its bullish stance on global equities.

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