Geopolitics and financial markets

Geopolitical conflicts and uncertainties had a much stronger impact on the general mood in 2025 than in previous years. International tensions are increasingly becoming the focus of attention. Concerns about debt, demographic change and deglobalization are giving rise to uncertainty in the economy and financial markets. For example, the US tariff policy and the conflict between Russia and Ukraine are continuing to generate geopolitical tensions and are affecting trade relations, energy prices and investment decisions. These factors are not only influencing the global markets, but also the mood of the Swiss people, who are reacting more strongly to international developments than in previous years.

Trend: Concern about possible major geopolitical changes in the future

in % of voters

The area chart shows the level of concern about possible major geopolitical changes in the future in the years 2024 and 2025. The responses are ranked by intensity, revealing changes in sentiment between the two years.

Despite a large number of challenges, examining transformations and their consequences for the financial markets can reduce uncertainty and enable you to identify opportunities for your own financial strategy. Changes not only harbor risks, but also open up opportunities for investors who think globally and act flexibly.

In an environment where geopolitical developments are having a greater impact on economic momentum than in previous years, a well-founded analysis can help to identify long-term trends at an early stage. As emphasized by the “Year Ahead” study by UBS, the transformative power of artificial intelligence could also stimulate growth.

Will AI, fiscal stimulus measures and the easing of monetary policy lead global markets into a new era of growth, or will rising debt, demographic change and political challenges put the brakes on the upward trend? The “Year Ahead” study helps to interpret the signals and build resilient portfolios – even if the markets do not perform as expected.  

Trend: comparison between the Swiss economy and foreign economies

in % of voters

The area chart shows how the Swiss population assesses the development of the Swiss and foreign economies from 2004 to 2025. The columns are divided into the categories “very good”, “rather good”, “rather bad”, “very bad”, and “don't know / no answer”. This reveals changes and trends in public opinion over the years.

Global geopolitical developments and economic changes are not only shaping the financial markets, but are also having an increasingly direct impact on Switzerland – economically, politically and socially, while at the same time opening up new opportunities for investors. This is also shown by the current UBS Worry Barometer: economic and geopolitical factors are more of a concern now than ever before. Issues relating to the financial stability of individuals – such as the rising cost of living – are gaining in importance, while traditional fears such as unemployment are losing ground.

In 2025, a clear majority of respondents stated that they are very or somewhat concerned about major geopolitical changes in the future. This clearly indicates that the Swiss are aware of their country’s international network – and recognize how closely global developments are linked to Switzerland’s stability.

In 2025, a clear majority of Swiss people are in favor of politicians taking a more proactive stance toward representing Swiss interests abroad. At the same time, almost 70% of respondents believe that Swiss politicians tend to be defensive or very defensive toward foreign countries. This gives a clear signal to politicians: the population is demanding more assertiveness in relation to the outside world. For a small, highly interconnected country like Switzerland, however, finding the right balance between economic openness and political independence is a difficult balancing act. Geopolitical tensions are a constant challenge for Switzerland. However, thanks to its economic stability and competitiveness, Switzerland is able to hold its own in international comparisons time and again. According to the Lausanne-based economic institute IMD, for example, Switzerland is the most competitive country in the world. And the “Human Progress Index” (HPI) , ranks Switzerland first as the most livable country in the world.

Given the growing influence of major powers in world trade, Switzerland must pursue long-term strategies in terms of economic policy. Voters are divided as to whether an independent niche policy or a stance more in line with that of the EU is more promising. Just under half (48%) of respondents are in favor of Switzerland converging toward a united EU position. This figure remains constant compared to 2024, despite the more tense relationship with the USA. At 42%, slightly more people than last year are in favor of an independent economic policy, even in the current environment.

The financial markets are also feeling the effects of geopolitical tensions. When markets fluctuate, uncertainty often grows among investors. With individually tailored solutions such as UBS Wealth Way, UBS Manage or UBS Advice, we monitor your portfolio on an ongoing basis, identify opportunities and risks at an early stage, and enable you to make rapid, well-founded adjustments. Your assets remain in good hands, even in turbulent times. Further analyses and market assessments can be found on the CIO website.