(UBS)
US equities have regained some poise this week, recouping more than half of the 2.7% loss sustained on Friday when Trump threatened fresh tariffs on Chinese imports. Treasury Secretary Scott Bessent on Wednesday suggested the possibility of extending the US-China trade truce, and the third-quarter earnings season is off to a good start with solid results from US banks and several tech firms.
Early reporters typically provide a good indication of how the rest of the earnings season will play out, and we expect another good reporting period ahead, which could be a catalyst for US equities overall.
We believe the third-quarter earnings season will reinforce our view that the bull market remains intact. We estimate S&P 500 earnings per share growth to modestly improve from 8% in the second quarter to 10% in the third quarter. Investors should ensure they have adequate allocation to equities, especially in areas exposed to transformational innovation opportunities such as AI, Power and resources, and Longevity.
Original report – Third-quarter earnings may offer a positive catalyst for stocks, 16 October 2025.
