At a Glance

18 September 2026, 18:22 UTC Chief Investment Office GWM Investment Research

At a Glance 18 September 2026, UBS House View Market performance (year-to-date) Equities: S&P 500 +12.5%, Euro Stoxx 50 +11.5%, MSCI EM (USD) +22.3%, MSCI CH +8.6% Bonds*: US IG −0.4%, EUR IG −0.8%, EMBIGD +1.8%, US HY +1.7%

Global economic outlook – The global economy remains resilient. Broadly stable employment and households’ willingness to reduce savings rather than consumption should continue to support activity in developed economies, although higher oil prices are likely to weigh on real incomes in the near term. – Higher energy costs should lift headline inflation, but second-round effects such as wage-price spirals and profit-led inflation remain limited. Strong investment in artificial intelligence and recovering manufacturing activity should continue to support economic growth. – Central banks have adopted a more hawkish stance, but monetary policy cannot directly address an oil-supply shock. We expect a relatively shallow tightening cycle, with growth remaining resilient and inflation gradually moderating as supply pressures ease.

Forecasts, by region Economic growth Central banks: forecasts (real GDP; Inflation forecasts Overview of target % change y/y) (CPI; % change y/y) rates (%) 10-year yields (%) 2026E 2027E 2026E 2027E Current June 2027 Current June 2027 World 3.1 3.4 3.7 3.0 US Eurozone UK Switzerland Japan China Source: UBS, Bloomberg, 18 September 2026. *Indexes: Bloomberg Intermediate Corporate (USD), Bloomberg Euro Aggregate Corporate, JPMorgan EMBI Global Diversified, ICE BofA US High Yield.

The month’s top three questions: – What does the Warsh era mean for Fed policy? The Federal Reserve raised rates by 25 basis points in September, lifting the federal funds target range to 3.75–4.00%. Chair Kevin Warsh said the move removed a “dose of accommodation,” while stronger growth and persistent inflation led policymakers to project one further increase this year. We also expect another 25-basis-point increase in December. However, markets are pricing three further increases by the end of 2027, which we believe is excessive as disinflation resumes. – What does the US-Iran conflict mean for markets? Continued disruption to Middle Eastern energy supplies has kept oil prices elevated and added to inflation risks. However, the global economy and energy markets have continued to adapt through alternative shipping arrangements, pipeline routes, inventory use, and changes in demand. Resilient economic growth, strong corporate earnings, and sustained AI investment should help markets withstand higher energy costs. We remain constructive on global equities. – How can investors find income? Higher bond yields have created opportunities across regions and market segments. We view fixed income as Attractive and see tactical opportunities to add exposure to high-quality bonds in the medium- to long- term maturity range, where yields provide income, potential price gains if growth slows, and portfolio diversification.

This report has been prepared by UBS AG London Branch. Please see important disclaimers and disclosures at the end of the document.

Our top investment ideas for October – Position for market upside. Resilient economic activity, broadening earnings growth, and robust AI investment support further equity gains, in our view. Investors should maintain diversified core equity exposure, reduce concentrated single-stock positions, and consider targeted exposure to transformational innovation. On a relative basis, we prefer Eurozone, Asia ex- Japan, and emerging market equities for their more pro-cyclical exposure over the more defensive UK and Swiss markets. – Consider capital preservation. Capital preservation strategies can help investors retain exposure to potential equity-market gains while managing the risk of a drawdown. They may be particularly relevant for investors with concentrated portfolios, lower tolerance for losses, near-term liquidity needs, or substantial gains they wish to protect. The appropriate approach should reflect each investor’s objectives, investment horizon, liquidity needs, and risk tolerance. – Position for…