Ahead of Wednesday's opening bell, all three major U.S. stock index futures moved higher, with Nasdaq futures jumping 1.91%, while most prominent technology shares posted gains.

Advanced Micro Devices (AMD) shares climbed more than 5%, while NVIDIA (NVDA) and Broadcom (AVGO) shares each rose over 3%. Alphabet (GOOGL), Meta Platforms (META), and Tesla Motors (TSLA) shares all advanced more than 1%.

Where the market stands according to UBS

UBS issued a research note stating that inflationary pressures in the United States will still push the Federal Reserve to continue tightening monetary policy, with the bank expecting rate hikes of 25 basis points each in December 2026 and March 2027.

Why rate hikes may not derail the rally

However, economic growth and corporate earnings remain robust, and modest rate increases are unlikely to bring an end to the U.S. stock market's upward trajectory. UBS believes the U.S. economy is capable of withstanding an extended period of elevated interest rates.

The firm forecasts that S&P 500 constituent companies will see earnings growth of 25% in 2026 and 14% in 2027, which is expected to help the stock market withstand the pressure brought by moderate rate hikes.