LIVE MARKETS-The case for equities remains

Those risks deserve attention - but recent market moves don't undercut the core case for equities, Haefele said.

For one, he noted, AI fundamentals are still intact, with AI-related companies reporting robust demand trends. Markets have also been anchored by strong earnings growth, which is - importantly - broadening out across sectors, Haefele pointed out. And, he said, even as oil prices have climbed, "the broader inflation picture remains more balanced than recent market moves suggest."

"So while periods of elevated volatility can be uncomfortable, they do not necessarily invalidate the underlying investment case," he said, adding that the base case for durable AI investment, broad earnings growth, and the inflation path continues to be constructive.

"We continue to think equities are Attractive and favor a diversified approach that balances targeted allocations to structural growth opportunities with other sectors that stand to benefit from a broadening earnings cycle," he said.

While global bond yields are stabilising after yesterday's Treasury move, they remain elevated, and equities still seem to be on edge, Mark Haefele, chief investment officer at UBS Global Wealth Management said.

He noted that Europe's STOXX 600 .STOXX, the Nasdaq 100 .NDX, and the Kospi .KS11 are all set for weekly declines, while Brent crude futures have picked up.

"At first glance, these moves combine several factors that have historically challenged risk assets: higher bond yields, higher oil prices, and weakness in the technology and AI-linked shares that have led much of the equity rally," he said.

"Concerns about AI monetization, ongoing debate over AI financing structures, and questions around the sustainability of investment spending have added to uncertainty around one of the market's most important themes."