UBS's framing suggests the path of least resistance for equities remains higher into year-end, provided the current run of limited near-term catalysts holds through Nvidia's earnings and the Jackson Hole symposium. The bank's read on the Fed is the more contestable element, with markets currently pricing in more than one hike over the next year while UBS expects softer payrolls, inflation and consumer spending data to keep policymakers on hold instead. That gap between market pricing and UBS's own base case leaves room for volatility around each new data point, particularly given this week's hawkish FOMC minutes complicate the softer-data thesis the bank is leaning on. The bank's emphasis on broadening earnings participation, rather than gains concentrated in a handful of mega-cap names, is also notable, since it points toward a rotation trade rather than a continuation of the narrow leadership that has characterized much of the AI-driven rally.--This from analysts at UBS is from prior to the big bond buyback announcement:Bessent's hair on fire:A radical Bessent, panicking with big Treasury bond buyback move, craters the dollarAs it happened:US Treasury is increasing the size of liquidity support buyback operations for longer-dated securitiesMore:ICYMI - HUGE news: US Treasury's giant bond buyback boost sinks dollar, lifts stocksDeutsche Bank sees 4 reasons Treasury buyback move is dollar negative (ps. Fed hike too?)Bessent's panic move risks reigniting rate hike bets, hands Fed hawks new ammunitionbut serves as useful guidcance nonetheless. UBS argues resilient growth, broadening earnings strength and a Fed that stays on hold outweigh a stack of geopolitical risks, keeping the bank constructive on global equities into year-end.Summary:UBS notes the VIX has fallen to its lowest level of 2026, with limited near-term catalysts likely to persist ahead of Nvidia's earnings and the Jackson Hole symposiumThe bank flags elevated geopolitical risks, including renewed conflict involving Israel and Hezbollah, ongoing uncertainty around the Strait of Hormuz, and intensified Russia-Ukraine attacksUBS says the US economy remains resilient despite weaker July retail sales and higher oil pricesCorporate earnings have delivered strong positive surprises, with improving profitability and broader participation across the equity market rather than a narrow set of leadersThe bank describes AI investment as robust, supported by encouraging signs that monetisation is progressingWhile markets currently price in more than one Fed hike over the next year, UBS expects softer payrolls, inflation and consumer spending data to keep the Fed on holdUBS maintains a constructive outlook for risk assets into year-end and favours diversified global equity exposureUBS has reiterated a constructive stance on risk assets heading into year-end, arguing that resilient US growth, stronger corporate earnings and a Federal Reserve likely to stay on hold should outweigh a build-up of geopolitical risks weighing on sentiment.The bank points to the VIX falling to its lowest level of 2026 as a signal that near-term catalysts remain limited, a dynamic it expects to persist ahead of Nvidia's upcoming earnings report and the Jackson Hole economic symposium. That relative calm comes despite a notable list of geopolitical flashpoints UBS flags as still live, including renewed conflict involving Israel and Hezbollah, continued uncertainty around the Strait of Hormuz, and intensified attacks in the Russia-Ukraine war. Even so, the bank argues the US economy has proven resilient, holding up despite a weaker July retail sales print and higher oil prices.Corporate earnings are doing much of the heavy lifting in UBS's constructive case. The bank says the current reporting season has delivered strong positive surprises, with improving profitability and participation broadening out across the market rather than remaining concentrated in a narrow group of mega-cap names. UBS also points to continued strength in artificial intelligence investment, noting encouraging signs that monetisation of that spending is progressing, a factor it views as supportive for the broader technology-led rally.On monetary policy, UBS strikes a notably different tone from current market pricing. While futures markets are pricing in more than one Fed rate hike over the coming year, the bank expects softer payrolls, inflation and consumer spending data to allow the central bank to remain on hold rather than tighten further. That view underpins UBS's broader conclusion: resilient growth, stronger earnings, and what it sees as a less hawkish path for the Fed than markets currently expect should together support further gains in global equities, even as geopolitical risks stay elevated. The bank says it favours diversified global equity exposure as the best way to capture that upside while managing the risks it has flagged. This article was written by Eamonn Sheridan at investinglive.com.