UBS Group has downgraded its investment rating for US stocks to "Neutral" while firmly maintaining an "Overweight" rating on emerging market stocks, anticipating that the risk of U.S. stocks underperforming appears greater than the potential for outperformance.

Andrew Garthwaite, UBS's Chief Global Equity Strategist, pointed out in the report that the U.S. market faces multiple headwinds, including lower operating leverage compared to other regions, downside risks for the U.S. dollar, lackluster buyback returns, and high valuations.

The report stated that despite the rise of artificial intelligence, the U.S. economy's growth exceeding expectations, and U.S. President Donald Trump's rollback of some tariffs, the decline in the U.S. market, measured in the dollar, has been the largest relative to the global market in nearly 15 years.