UBS urges investors to stick with stocks as Middle East tensions lift oil prices
SPY•UBS analysts urged investors to stay invested as Middle East tensions pushed Brent crude above $112 a barrel, its highest level since May. They said the S&P 500 has ended higher 12 months after the start of a geopolitical crisis about three-quarters of the time since 1941.
1. UBS advises staying invested
UBS analysts led by Ulrike Hoffmann-Burchardi said investors should remain focused on long-term market fundamentals rather than retreat from equities as tensions in the Middle East lifted oil prices. They recommended broad equity exposure across sectors and regions, and energy-related assets as a hedge against supply-driven volatility and a source of diversification.
2. Oil rises as risks grow
Brent crude crossed $112 a barrel for the first time since May and was on track for a third consecutive weekly gain, bringing its advance this month to more than 9%. Renewed attacks in the region raised concerns about disruptions to global energy supplies, while higher energy costs could complicate the outlook for inflation and monetary policy. UBS said global oil markets are likely to adapt to supply shocks and cited historical data showing the S&P 500 ended higher 12 months after the onset of a geopolitical crisis roughly three-quarters of the time since 1941.
3. Commodities in focus
The analysts said broad commodities could offer a differentiated source of returns, citing rising power demand, AI infrastructure investment, electrification and constrained supply as supportive of an upcycle.
