(Reuters) - UBS Global Research increased its year-end target for the S&P 500 on Tuesday to 5,150, marking the highest projection among major global banks and indicating a potential 8% upside from current levels.
The European brokerage had earlier expected the index to end the year at 4,850.
UBS' view on the benchmark index is supported by growing bets of the U.S. Federal Reserve cutting interest rates this year, a decline in inflation and resilient earnings expectations.
It also expects a 6.3% growth in earnings of S&P 500 companies this year, below consensus estimate of 11.4%.
"While earnings should drive 2024 returns, falling interest rates should support incrementally higher multiples," UBS strategists said in a note.
The index ended last year with an annual gain of more than 24%. It closed about 0.1% higher on Friday at 4,783.83 points.