The US stock market is on the verge of accomplishing a feat that has occurred only five times since the 1940s: three successive years of double-digit gains. The S&P 500 is projected to increase by 17% this year, following a rise of 23% in 2024 and 24% in 2023. The increase occurs in the face of apprehensions regarding tariffs, geopolitical instability, anxieties surrounding a potential bubble, and the most prolonged government shutdown on record. A consecutive series of double-digit gains is a phenomenon that occurs infrequently. The index has encountered this phenomenon only five times prior to this year, with two instances culminating in a four-peat and one — from the 1990s — resulting in a five-peat, as noted by Sam Stovall. In 2025, equities experienced an uplift driven by strong corporate earnings, heightened enthusiasm surrounding artificial intelligence, and a prevailing optimism regarding potential interest rate reductions from the Federal Reserve. “Equity markets are concluding the year positively, with the S&P 500 poised for its third consecutive year of double-digit returns, propelled by AI momentum and a robust economy that has managed to overcome fiscal and political challenges,” Craig Johnson stated in a note.
The S&P 500 commenced the year following its most robust consecutive annual performance since the 1990s. As President Donald Trump prepared to take office, market exhibited a measured optimism regarding the potential for additional gains. In late January, equities experienced a significant decline following the introduction of an AI chatbot by Chinese tech newcomer DeepSeek, which sparked apprehensions regarding the excessive financial investments being funneled into AI firms by Silicon Valley. Markets regained upward momentum as investors intensified their commitments to the belief that US firms are set to excel in the competition for advanced AI technology — a narrative that has driven market gains this year, even amid concerns regarding a potential bubble. In the spring, markets underwent significant volatility as Trump implemented his “Liberation Day” tariffs, imposing import duties on various nations worldwide and posing a potential disruption to the global trading system. However, equities experienced a significant rebound following Trump’s retraction of his most extreme tariff threats, with the S&P 500 and Nasdaq reaching their initial record highs since February in late June.
Equities have predominantly ascended since then, supported by robust corporate earnings and Federal Reserve rate reductions, which enhance the attractiveness of stocks compared to bonds and facilitate elevated stock valuations. The Dow Jones Industrial Average has experienced a 13.7% increase this year. The blue-chip index commenced the year at approximately 43,000 points, fell beneath 37,000 points in April, and subsequently recovered as Trump postponed the majority of his tariffs. The Dow reached a new peak exceeding 45,000 in August, subsequently crossing 46,000, 47,000, and 48,000 points in rapid succession, occasionally achieving these milestones within mere weeks. AI has emerged as the defining narrative of the year, resulting in a 21% increase in the tech-heavy Nasdaq Composite, which has outperformed the other two major indexes for three consecutive years. Since October 2022, when OpenAI first introduced ChatGPT, technology and artificial intelligence stocks have driven US markets upward, signaling the onset of a bull market in AI. The year was characterized by episodes of remarkable volatility, with the CBOE Volatility Index spiking in April and again in June before stabilizing.
The Treasury market, a key determinant of borrowing costs throughout the economy, exhibited relative stability following significant volatility experienced in the spring due to Trump’s tariffs. The 10-year Treasury yield commenced the year at 4.57% and concluded at 4.12%, contributing to the maintenance of lower mortgage rates in 2025. Bond yields and prices exhibit an inverse relationship, and ten-year Treasury bonds experienced a rally as investors recalibrated expectations around Federal Reserve rate cuts and a softening labor market. Meanwhile, the 30-year Treasury yield commenced the year at 4.79% and concluded the year at 4.8%, reflecting ongoing apprehensions regarding persistent inflationary pressures. The US dollar has experienced a depreciation relative to other major currencies this year, with the dollar index declining by 9.5%, marking its most significant annual drop since 2017. The dollar weakened amid challenges to the Federal Reserve’s autonomy, interest rate cuts, and uncertainty surrounding U.S. policy decisions and tariffs.
Gold futures traded in New York have surged 66% this year, poised to achieve their most significant annual increase since 1979. Gold commenced the year at approximately $2,640 per troy ounce, peaked above $4,500 in December, and later retraced to around $4,355. As gold rose, silver surged 164%, briefly surpassing $80 per ounce, driven by investment and industrial demand tied to solar panels, electric vehicles, and batteries. Platinum futures climbed 144%, palladium rose 87%, and copper futures jumped 43%, marking their strongest annual gain since 2009 due to industrial demand and trade disruptions. Oil prices fluctuated amid geopolitical tensions but ended lower, with US crude down 18% and Brent crude down 17%. Cocoa futures fell 48% after last year’s surge. International markets outperformed US equities, led by South Korea’s Kospi with a 76% gain and Japan’s Nikkei rising 26%, while European defense stocks surged. Bitcoin ended the year near $88,000, down about 6.6%, after peaking at $126,000 earlier in the year before late sell-offs unsettled investors.