UBS Global Wealth Management has adjusted its forecast for Chinese stocks, revising its mid-2025 target for the MSCI China Index from 76 to 67 and its end-2025 target from 79 to 74.

This revision is due to concerns over potential US tariffs and disappointing stimulus measures from Beijing.

The report emphasizes the impact of "tariff-induced volatility" and a lack of aggressive stimulus response, particularly in light of Donald Trump's recent re-election, which could result in significant tariff increases on imports, particularly from China.

The MSCI China Index reached its peak at 76 in early October after a rally that began in late September but has since declined to 67.

UBS, which manages $6.2 trillion in assets, is the first major wealth manager to lower its outlook on Chinese equities, reflecting the increasing uncertainty in the market.

The report highlights the challenges faced by global investors as they navigate the implications of US-China trade relations and the effectiveness of China's economic stimulus efforts.