US stocks edged higher on Wednesday, extending their recent rebound and pushing the S&P 500 further into positive territory for the year.
The benchmark index rose 0.2%, the Nasdaq Composite added 0.5%, and the Dow Jones Industrial Average climbed 61 points, or 0.2%.
Technology stocks remained at the forefront of the rally. Nvidia shares gained over 2% following reports that the company will supply 18,000 of its top-tier AI chips to Saudi Arabia.
AMD saw an even stronger move, surging more than 7%, reflecting continued investor enthusiasm around semiconductor and AI-driven plays.
The broader risk-on sentiment was supported by easing trade tensions between the US and China.
Both countries this week rolled back some of the steep tariffs imposed in April.
President Trump tempered expectations, saying that a final agreement is unlikely to materialize quickly.
Still, the temporary thaw in hostilities has given markets breathing room.
At one point last month, the S&P 500 had dropped more than 20% from its February highs, but it has since recovered those losses.
With markets stabilizing and trade tensions easing for now, investors appear increasingly willing to rotate back into equities, particularly growth-oriented sectors.
However, the lack of a firm agreement between Washington and Beijing continues to cast a shadow over the longer-term outlook.
Why UBS advises caution on US stocks
UBS Wealth Management downgraded its stance on US equities to “neutral” on Tuesday, signaling caution following a strong rally in stocks.
Mark Haefele, the firm’s chief investment officer, said the move was not a bearish call but a recalibration in light of the S&P 500’s 11% surge since early April.
The previous “attractive” rating, issued on April 10, followed a temporary pause in tariffs imposed by President Donald Trump.
Haefele now believes the recent gains have made the risk-reward balance less compelling.
While acknowledging a more constructive tone in US-China trade talks following a mutual decision to cut tariffs for 90 days, Haefele highlighted persistent uncertainty.
“While the 90-day cooling-off period has provided a reprieve, uncertainty is still high, and investors will soon begin to focus on whether this temporary fix can evolve into a lasting agreement,” he said in a note to clients.
Despite the downgrade, UBS is not advising clients to exit US stocks entirely. Haefele maintained a long-term positive outlook, recommending a strategic allocation to U.S. equities on expectations of further gains over the next year.
The UBS shift comes in contrast to a more bullish tone elsewhere on Wall Street.
Goldman Sachs strategist David Kostin raised his S&P 500 year-end target to 6,100 from 5,900, citing easing trade tensions and a better macroeconomic backdrop.
Ed Yardeni of Yardeni Research also upgraded his target to 6,500, arguing that investor sentiment has become more resilient in response to tariff developments.
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