2025 Wall Street Stock Markets Review and Outlook
The year 2025 saw strong gains in major US stock indices despite several economic challenges. The S&P 500 finished the year up 16.4%, closing at 6,845.50 on New Year’s Eve, though it fell 0.7% in that final session. The Dow Jones Industrial Average rose 13.4% over the year, while the Nasdaq Composite surged 20.5%. Nvidia was a standout performer, finishing 2025 up 34.8% and reaching a market valuation of $4.55 trillion, driving much of the AI-related rally. Since the launch of OpenAI's ChatGPT in November 2022, the Nasdaq has surged more than 110%. The year’s market volatility was influenced by rising tariffs, which reached the highest average effective rate since 1935 following proposals by President Trump despite some rollbacks. The economic backdrop included the longest US government shutdown in history, persistent inflation, and slower job growth amid looming Federal Reserve rate decisions. International markets also showed strength, with London’s FTSE 100 rising 21.5% in 2025. Analysts remain optimistic for further gains in 2026. However, the gains have disproportionately benefited the wealthy, contributing to widening "K-shaped" economic inequality, while polls show a worsening trend in Americans’ financial security.
