UBS says the selloff might be over year-end rally coming? Curious what everyone thinks.

UBS says the recent pullback in U.S. stocks may be largely done, setting the stage for a potential year-end rally. Last week’s sharp drop came as investors started doubting how quickly the Fed will ease policy and trimmed positions in crowded AI trades. The S&P 500 and Nasdaq 100 fell roughly 4% and 7% from their late-October highs, both landing near their 100-day moving averages.

But UBS argues that with major indices holding key technical levels, most systematic-fund selling out of the way, and rate-cut expectations for next month stabilizing again, the market may be ready to turn higher.

“The de-risking phase looks mostly behind us,” wrote Michael Romano, head of equity-derivative hedge-fund sales at UBS.

Romano expects the S&P 500 to climb toward 7000 by year-end, saying November’s shakeout reset positioning enough to support another move higher. He also sees the setup for a stronger-than-usual December, particularly for momentum names.