Markets are eerily calm after the banking chaos - but tightening credit and tumbling earnings could reignite volatility, UBS says

• The S&P 500's "fear gauge" fell to its lowest level in 15 months after the recent banking turmoil.
• Investors are eerily calm – but heightened uncertainty could rock markets soon, UBS says.
• "The outlook for US equities is challenged," the Swiss bank said in a recent research note.

Stock markets have been eerily calm since last month's banking chaos – but tightening credit and tumbling earnings threaten to put volatility back on the menu, according to UBS.

"The outlook for US equities is challenged amid tighter financial conditions, declining corporate earnings, and relatively high valuations," a team led by the Swiss bank's CIO, Mark Haefele, said in a research note this week.