CME's (CME) trading volumes and its stock have been boosted by geopolitical events this year, but activity has started to slow, UBS said in a note Wednesday.

June volumes dropped 13% year-over-year, and July is tracking similarly weak, with declines in interest rates, energy, and equity index trading, the investment firm said.

Although long-term growth drivers remain strong, especially in retail trading and global expansion, UBS analysts do not expect these factors to lift earnings in the short term, according to the note.

Initiatives include a new FX platform, extended Nasdaq index licensing, and a partnership with Google Cloud to launch tokenization tech in 2026, UBS said.

UBS analysts cut their earnings forecast slightly to $10.90 from $10.92 for fiscal 2025 and to $11.77 from $11.83 for fiscal 2026 due to softer volume expectations, according to the note.

Analysts now expect Q3 earnings per share to fall 6% year over year, the first decline since Q1 2021, according to UBS.

UBS downgraded CME's stock to neutral from buy with a $305 price target.

Price: 276.41, Change: -0.08, Percent Change: -0.03