Why this summer’s market turbulence might just be the buying opportunity you were waiting for

It’s been a stormy start to summer on the markets. Trade tensions are once again flaring, with US President Donald Trump ratcheting up tariffs on steel and aluminium, sending a shiver through global equity markets.

China has promised a firm response, while US courts bicker over whether the tariffs are even legal. No surprise then that investors have turned cautious.

Yet, dig a little deeper and a different picture emerges. According to UBS’s latest market outlook, the overall direction of travel still favours equities over the next 12 months, especially in the United States.

Earnings growing

Earnings are growing, interest rates could be heading lower again, and even geopolitical posturing might be more bark than bite.

UBS’s call is simple: don’t get blown off course by the headlines. Instead, think long term and phase into the market gradually, particularly into high-quality US stocks and sectors driving innovation.

That advice comes with good reason. Corporate earnings in the United States rose faster than expected in the first quarter, and UBS has upgraded its full-year forecast for S&P 500 earnings per share to 4%.

That might not sound like fireworks, but in a jittery environment, steady profit growth offers solid ground.

Even more encouraging, UBS sees 8% earnings growth in 2026, helped along by a pickup in real wages, clearer tax policy, and a return to interest rate cuts by the Federal Reserve.

Historical angle

There’s also a historical angle worth remembering. Times of high market volatility and low investor confidence (both of which we’re seeing now) have often been followed by strong returns.

With the S&P 500 now just shy of its record high, UBS expects it to push higher, hitting 6,400 by next June, up from 5,912 today.

But what about all the noise around tariffs? Yes, trade policy is lurching back into confrontational territory, and UBS sees no quick resolution. Still, the base case is that cooler heads will prevail, particularly if markets start to suffer.

After all, the Trump administration has shown before that it responds to financial stress. Even with the latest drama, UBS believes the effective US tariff rate will settle around 15% by year-end. That’s not nothing, but it’s manageable.

In the meantime, artificial intelligence and other transformational technologies continue to gather pace.

Secular growth

UBS highlights themes like AI chips, cloud computing, and health care innovation as areas of “secular growth”; in other words, they are rising regardless of the economic cycle. While individual tech stocks may be volatile, the underlying demand remains robust.

So, what to do in practice? UBS recommends adding to equities bit by bit rather than trying to time the perfect moment.

Think of it as dipping your toe in rather than diving headfirst. For those worried about short-term jolts, strategies focused on preserving capital or diversifying into quality bonds still make sense.

The takeaway? This isn’t a time to retreat. It’s a time to plan, pace yourself and, above all, stay invested.