Wall Street's three major indices ended 2025 with substantial gains, marking three consecutive years of increases. The S&P 500 rose 16.39%, Nasdaq 20.36%, and Dow Jones 12.97%, driven by artificial intelligence despite turbulence from Donald Trump's tariff policies.
Despite a red close on the last day of 2025, with four consecutive down sessions, Wall Street recorded a positive annual balance for the third straight year. The S&P 500 advanced 16.39%, achieving double-digit gains for the third time in a row, while the Nasdaq Composite added 20.36% and the Dow Jones 12.97%.
The year was shaped by two key factors: artificial intelligence, which has driven the U.S. market for the past three years, and the tariff policy announced by President Donald Trump in early April. The latter triggered an initial market drop, with the S&P 500 nearly erasing all its year-to-date gains at that point.
Keith Buchanan, senior portfolio manager at Globalt Investments, told CNBC: “Thanks to 2025, the market can now ignore any tariff changes in 2026, trusting that the administration remembers the lessons of 2025 and that U.S. companies can adapt on the fly to preserve margins.” Buchanan emphasized the need for gradualism in such measures to avoid negative market impacts.
In the AI sector, Nvidia stood out as the big winner, ending the year as the world's most valuable company with a market cap exceeding $4.5 trillion. However, doubts arose about a potential bubble in this area, fueling fears of a correction.
On a monthly basis, December closed positive, extending a streak of eight consecutive gaining months for the Dow Jones and S&P 500, unseen since 2018. The final session saw declines of 0.63% in the Dow, 0.74% in the S&P 500, and 0.74% in the Nasdaq, during a low-volume holiday-shortened week, missing the expected 'Santa Claus rally'.
Looking to 2026, investors expect the S&P 500 to rise over 10% if corporate earnings support current valuations.
