Key Takeaways

• UBS has revised its S&P 500 year-end 2026 projection downward from 7,700 to 7,500
• Elevated crude prices stemming from Middle Eastern geopolitical tensions drive the revision
• The benchmark index has declined 3.9% following the outbreak of Iran conflict on February 28
• Federal Reserve rate reduction expectations shifted to September and December from June and September
• Despite revisions, UBS maintains approximately 13% potential upside with $310 earnings per share forecast

UBS Global Wealth Management has adjusted its outlook for the S&P 500, trimming its price projection for 2026. The revision comes as energy costs climb and economic headwinds intensify due to escalating tensions in the Middle East.

According to an April 6 research note, UBS reduced its year-end forecast to 7,500 from a previous estimate of 7,700. The firm also lowered its mid-year projection to 7,000 from 7,300.

Since conflict erupted with Iran on February 28, the S&P 500 has retreated approximately 3.9%. Spiking energy costs combined with geopolitical instability have prompted investors to reduce equity exposure.

UBS’s central scenario anticipates the conflict subsiding in the weeks ahead, which would enable energy supply chains to gradually normalize.

Yet the Swiss banking giant cautioned that returning oil production to pre-conflict capacity will require significant time. Widespread infrastructure damage throughout the region means full production restoration remains months away.

This delay could sustain elevated crude prices beyond current market expectations.

Energy Price Surge Creates Economic Headwinds

Rising energy costs typically decelerate economic expansion while accelerating inflation. UBS indicated this pattern will likely sustain sticky inflation and create modest drag on the American economy.

Consequently, the institution now anticipates the Federal Reserve will postpone additional monetary easing. UBS had originally projected reductions in June and September but now forecasts two 25-basis-point decreases in September and December.

This adjustment illustrates how international geopolitical developments can influence domestic central bank decisions.

Notwithstanding the reduced targets, UBS calculates roughly 13.43% upside potential from the S&P 500’s most recent closing level of 6,611.83.

Long-Term Bullish Stance Remains Intact at UBS

UBS maintained its 2026 earnings projection for the S&P 500 at $310 per share. The institution characterized American equities as “attractive” notwithstanding near-term challenges.

The firm highlighted that corporate profit expansion remains robust. It also emphasized ongoing artificial intelligence adoption and commercialization as supportive factors for equities once conflict-related pressures diminish.

UBS noted that even with delayed policy accommodation, the Federal Reserve continues to provide broad market support.

The bank refrained from altering its constructive view on U.S. stocks. It simply recalibrated the timeline and magnitude of its price forecasts to reflect the ongoing war’s impact.

UBS currently projects two Federal Reserve rate reductions before 2026 concludes, both scheduled for the year’s second half.

The crypto market is trading sluggishly within the range it has held for two months, with bitcoin BTC$68,461.22 changing hands at $69,000 and ether (ETH) at $2,130.

The range-bound pricing dates back to Feb. 6, with several peaks between $72,000 and $75,000 and troughs between $62,000 and $65,000.

A similar two-month pattern occurred between November and January before a price breakdown, leading analysts to suggest a similar scenario may play out this time around.

Much still depends on the conflict in Iran, with U.S. President Donald Trump’s threats of “obliteration” falling on deaf ears thus far. Brent crude oil remains at $107 per barrel, which will have a knock-on effect on inflation over the course of the year unless it declines.

Derivatives positioning

• The market continues to consolidate as bitcoin open interest (OI) stabilizes at $16.7 billion, little changed from last week and indicating that speculative activity remains flat.
• Funding rates have moved into a neutral 0%-6% range, following a period of negative funding that likely fueled the initial relief rally through short covering.
• With the three-month annualized basis also little changed over the week, institutional conviction remains cautious, suggesting that while the immediate downside pressure has eased, the big players are not yet positioning for a major breakout.
• Options sentiment is stabilizing as call dominance reaches 47% and one-week skew drops to 16% from 19% last week. However, the implied volatility term structure’s front-end backwardation confirms that traders are still prioritizing immediate downside protection over long-term growth expectations.
• CoinGlass data shows $163 million in 24-hour liquidations, with a 60-40 split between longs and shorts. BTC (64 million), ETH ($35 million) and others ($16 million) were the leaders in terms of notional liquidations.
• The Binance liquidation heatmap indicates $69,500 as a core level to monitor in case of a price rise.

Token talk

• The altcoin market has been surprisingly buoyant recently, despite broader market apathy. Since midnight UTC privacy tokens zcash (ZEC) and dash (DASH) rose by 6.7% and 3.1%, respectively, and there were also notable gains for FET, PUMP and RENDER.
• The bitcoin-dominant CoinDesk 20 (CD20) index gained 0.3% on Tuesday, while being outpaced by the CoinDesk Memecoin Index (CDMEME) and CoinDesk Computing Select Index (CPUS), a sign of the relative strength of altcoins compared with crypto majors.
• The recent bounce in altcoins has not been uniform, however. AI tokens, privacy tokens and the likes of HYPE and ALGO have performed well, while other market segments have tumbled. Over the past 90 days ethena (ENA) has lost 66% of its value, while TIA, LDO, SUI and ARB have all fallen by more than 50%.
• That’s a divergence from previous cycles, when altcoins moved in unison. It now appears the market is maturing to a point where assets may be moving based on real-world impact, as opposed to hype and overzealous roadmaps.

Since the outbreak of the war with Iran on Feb. 28, bitcoin BTC$68,461.22 has started to diverge from software equities, with the iShares Expanded Tech-Software Sector ETF (IGV), serving as a useful proxy for the sector.

Bitcoin has been one of the strongest-performing assets during this period, rising more than 5% and trading back above $69,000, including a gain of more than 0.5% over the past 24 hours.

IGV, in contrast, has fallen more than 2% since the conflict began. That gap suggests investors are starting to treat bitcoin and software stocks differently, at least in the near term.

Until recently, the two had moved closely together. Over the past three months, bitcoin fell 26% and the ETF lost 23%. Year to date, both are lower by about 21%. Over five years, bitcoin has gained 18% compared with 10% for IGV. In other words, both have moved in the same direction, but the cryptocurrency has done so with much greater volatility.

That is also clear in their declines. Bitcoin had fallen roughly 50% from its October all-time high, while IGV, which peaked slightly earlier, fell about 35% from its own top.

The correlation data tells the same story. From early February, bitcoin and IGV were almost perfectly correlated, close to 1.0, meaning they were moving nearly in lockstep. After the war began, that relationship broke down sharply, with the correlation dropping to 0.13, a level that signals near decoupling, before rebounding to around 0.7. The figure can range between -1.0 and +1.0, with 0 indicating no correlation at all.

Why have software stocks been hit harder?

IGV is heavily weighted toward large software and services companies such as Microsoft (MSFT), Oracle (ORCL) and Salesforce (CRM). Investors are increasingly worried that artificial intelligence will compress margins and valuation multiples across software, especially in Software as a Service (SaaS), as competition rises and barriers to entry fall. Bitcoin, meanwhile, is trading more like a macro asset, benefiting from geopolitical uncertainty.

Bitcoin (BTC) is copying the end of its 2022 bear market “nearly perfectly,” according to a new BTC price analysis.

Key points:

• Bitcoin stochastic RSI values are “nearly perfectly” repeating the end of its last bear market, new analysis claims.

• Both recent local bottoms and the current rebound echo conditions from three years ago.

• Standard RSI is already on the radar for a potential BTC price bottom signal.

Bitcoin stochastic RSI echoes 2023 rebound

In an X post on Monday, crypto trader Quantum Ascend revealed copycat moves playing out on Bitcoin’s stochastic relative strength index (RSI) indicator.

Stochastic RSI, also known as “stoch RSI,” is a derivative of traditional RSI — a classic leading indicator that helps traders identify overbought and oversold conditions, as well as BTC price trend changes.

Like its standard counterpart, stoch RSI flashes “oversold” price signals when it drops below 30/100 on its scale, with “overbought” entering when its value is above 70/100.

Stoch RSI moves between those two zones much more quickly, but Quantum Ascend sees a key long-term bull signal now locking in.

“RSI at the EXACT SAME point on the Daily as it was in 2022,” he told X followers.

An accompanying comparative chart shows stoch RSI making a double bottom along with price before both surged higher in early 2023. At the time, BTC/USD had recently set a multiyear low of $15,600 — a level that ended up forming the bear-market bottom.

Now, Quantum Ascend says, the repeat performance is “playing out nearly perfectly.”

“Breaking above the EXACT SAME level (blue line). At the EXACT SAME time,” he added.

The chart reveals that stoch RSI is now attempting to clear its 50/100 midpoint after two local lows in late January and late March, respectively.

BTC price counts down to bear flag decision

RSI signals have already been firing in 2026 despite lackluster BTC price strength.

Related: First real bull signal since 2025? Five things to know in Bitcoin this week

As Cointelegraph reported, eyes are on weekly standard RSI to print a bullish divergence with price, again mimicking early 2023.

I stuck to my plan religiously in the bull, and I will do the same in the bear.

As such, it’s time to start paying attention – as it looks like $BTC is forming a potential higher low on the weekly RSI.

Giving it a few more weeks to develop, given how the previous bottoms had… pic.twitter.com/nnT84R5Til

— Jelle (@CryptoJelleNL) April 7, 2026

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At the time, weekly RSI set its lowest level on record — one so far not matched in 2026, per data from TradingView.

Bitcoin still faces bearish hurdles to recovery, with traders concerned about a bear-flag breakdown repeating on the daily chart.

“In few days we will understand if the pattern is repeating or not,” analyst Aksel Kibar wrote on X over the weekend.