UBS ran a simulation that shows stocks could lose up to 50% under rare stagflation scenario

Traders work on the floor of the New York Stock Exchange (NYSE).
Getty Images

Fears of stagflation escalated on Wall Street after another hotter-than-expected inflation report this past week, and UBS said stocks could lose up to half of their value if this condition persisted over the long term.

More In Pro Insight

CNBC ProMcDonald's, JetBlue, and Netflix are some of today's stock picks: Pro Market Movers May 16
CNBC ProMorgan Stanley says beware bear market rallies, S&P 500 headed to 3,400
CNBC ProGoldman's 'margin of safety' portfolio shows stocks too cheap to ignore even in tough economy