The core of this report is one sentence: Don't just look at AI, check out American people's credit card statements.

UBS chief strategist Bavejia said that near-zero disposable income and a retreat in fiscal support will slow U.S. consumption, threatening the stock market. While AI-driven Q1 earnings are strong, lingering worries remain about weakness in the consumption and financial sectors. Long-term U.S. Treasury yields have surged, reflecting nominal growth rather than inflation, and real yields are pushing interest rates higher. The market is too focused on AI capital expenditure, overlooking the risks of slower growth and consumption. Large-cap stocks are expected to beat small-cap, growth to outperform value, and if the Middle East conflict persists, the U.S. market will still perform better than Europe.