Investing.com -- UBS is maintaining its “Attractive” view on U.S. equities, arguing that the fundamental drivers of the bull market remain intact despite geopolitical tensions and recent market volatility.

In a note led by David Lefkowitz, the bank’s CIO and Head of U.S. Equities, UBS said it expects the S&P 500 to reach 7,300 by June and 7,700 by December 2026, supported by “healthy profit growth, supportive Fed policy, and the adoption of AI.”

UBS believes the market's resilience so far this year reflects a still-supportive backdrop.

“Profits are growing at a healthy clip, the Fed is likely to cut rates later this year, and the adoption of AI should create value for shareholders,” the firm wrote. UBS forecasts 2026 S&P 500 earnings of $310, representing 11 percent growth.

On geopolitics, UBS’s base case assumes only a brief disruption to energy supplies from the U.S.–Iran conflict.

It expects oil prices to decline from elevated levels, paving the way for equities to move higher.

The bank cautioned that if “energy does not start flowing from the Persian Gulf in the coming weeks, investors should be prepared for equity market downside,” but noted that historically the S&P 500 “typically rises after geopolitical events.”

UBS also highlighted market signals that point to further gains. It noted that when volatility spiked in March, the VIX closed above 29, “higher than 93 percent of all observations,” and that historically the S&P 500 has returned more than 20 percent on average in the following year.

UBS continues to expect U.S. stocks to climb over the remainder of the year, reiterating its 7,700 year-end target.