UBS projects the S&P 500 index will climb to 7,300 by June 2026, driven by anticipated Federal Reserve rate cuts, robust corporate earnings, and increased investment in artificial intelligence. The bank expects two additional rate reductions by early 2026 as the labor market cools and inflation eases. Approximately 80% of S&P 500 companies reported strong third-quarter earnings, bolstering confidence in continued growth. UBS highlights that AI-related capital expenditures are likely to benefit technology and cyclical sectors, supporting the index's upward trajectory into 2026.