Investors are shunning America. This wealth management giant says, actually, U.S. stocks are attractive.

U.S. stock futures have vacillated during the final session of what’s been a frantic week.

The optimists, who think U.S President Trump’s swift tariff U-turn on Wednesday signaled the peak of trade-war angst has passed, were for a while in ascendance.

But recent market action has shown that the pessimists, who fret that the 90-day tariff pause just prolongs uncertainty — and because of the 145% levy on China at a much higher overall tariff rate, too — are always lurking in the wings.

But, hey, financial markets are built on different opinions. That’s why trades occur.

It’s quite unusual, though, to have opposite viewpoints from the same finance house. On Thursday, we noted that UBS strategist Bhanu Baweja was advising investors to sell any rallies until more is known about how much tariffs will hurt the economy, and adding that it’s possible the S&P 500 SPX could slip below 5,000.

However, in a note published Friday, a team of analysts at UBS Global Wealth Management, led by chief investment officer Mark Haefele, have upgraded U.S. equities to attractive, giving three main reasons for doing so.

First, they reckon that Trump’s pause on what he calls reciprocal tariffs has reduced extreme economic and market risks. Despite China’s tariffs going up to 145%, the move “demonstrated willingness from the Trump administration to change its stance in response to equity and bond market turbulence indicates some sensitivity to market stress, and points to the existence of a ‘Trump put’ in some form,” UBS GWM says.

Next, they believe that news flow is likely to improve. Yes, they are wary that the spat with China may dislocate supply chains, and that the possibility — discussed by Treasury Scott Bessent — of Chinese companies being delisted from U.S. stock exchanges would damage sentiment. But with many countries indicating a desire to negotiate trade, there should be a variety of deals the administration will be keen to promote.

“We believe that progress on negotiations should provide encouragement for investors to look through near-term tariff-induced economic weakness and toward a return to earnings growth in 2026,” say the UBS GWM team.

Finally, they note that equity returns after highly volatile periods have historically been positive. Using the Cboe Volatility Index, or VIX VIX, as a guide, they observe that when it reaches levels above 40 the average rise for the S&P 500 over the next year is 30%, with a 95% chance of a gain. The VIX was around 44 early Friday, having risen to 60 midweek.

The UBS GWM team also note that the S&P 500’s 9.5% rebound on April 9, was the largest one-day gain since 2008, and the third biggest on record. And since 1950, there’s been 13 one-day rallies of 6% or more and all subsequent one-year returns have been positive, with gains ranging from 10% to 63%.

Furthermore, investor bearish sentiment is very elevated because of the trade fears. For example, the latest American Association of Individual Investors survey showed 58.9% of correspondents held a bearish outlook, fearing stocks will fall more over the next six months. The previous week the AAII survey showed such bearishness at a one-year high of 61.9%.

“Notably, bearish sentiment has historically served as a contrarian indicator, with the S&P 500 averaging a 27% returns in the 12 months following instances where sentiment readings exceed 60%,” say Haefele and team.

To be clear, they do worry about economic disruption if the tariffs on China remain in place, but after Trump’s midweek tariff about-turn the risk of a more severe economic downturn is now more limited, they reckon.

“We have raised our downside scenario S&P 500 price target to 4,500 (which we consider to be more aligned with a “normal” recession), up from 4,000 (more consistent with a systemic crisis like the global financial crisis),” they say.

U.S. stock-indices SPX DJIA COMP are a touch lower at the opening bell as benchmark Treasury yields BX:TMUBMUSD10Y nudge higher. Oil prices CL.1 are down and gold GC00 traded above $3,200 an ounce for the first time.

The dollar index DXY fell below 100 for the first time since September 2023, and the euro EURUSD jumped to a 3-year high of $1.14.

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Trump’s trade war will hasten the unraveling of globalization that made Asia the factory of the world and, as the chart below shows, gifted U.S. consumers cheap goods, notes Andrew Wishart, senior U.K. economist at Berenberg.

“Investors and policymakers are hardwired to equate weak growth with interest rate cuts,” he adds. “However, the first-order effect of tariffs is to raise prices, not reduce demand. It would take a major contraction in U.S. demand to outweigh the impact of higher import prices on inflation.”

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