UBS: It is expected that the profits of S&P 500 Index component companies in the first quarter will achieve the fastest growth rate since the fourth quarter of 2021. There is still room for US stocks to rise in the next year.

UBS strategists say they believe that in the next year, U.S. stocks still have room to rise, thanks to strong corporate profit growth and a stable U.S. economy. Currently, U.S. stocks have entered a new earnings season. UBS expects that profits of companies in the S&P 500 index will grow by about 17% in the first quarter of this year, which will be the fastest pace since the fourth quarter of 2021. UBS attributes this strong growth in corporate profits to the broad momentum of the U.S. economy, as well as strong semiconductor demand related to artificial intelligence infrastructure spending. In addition, UBS also expects that the performance of the financial and materials sectors will achieve above-average growth and states that "actual results are likely to be better than expected." The bank points out that the profits of companies that have been announced so far show little negative impact from the conflict in Iran. In terms of macroeconomics, UBS strategists say that despite the rise in international oil prices, the U.S. economy is performing well. The potential inflation rate in March remains lower than expected, consumer spending remains strong, and manufacturing activity has returned to the expansion range for the first time in three years.