Global Stock Markets Mark Best Year Since 2019 Amid Trade Tensions and AI Rally
The MSCI All Country World Index rose over 21% in 2025, marking the best annual performance since 2019 and the second best since 2009. The US S&P 500 gained 17%, but lagged behind stronger gains seen in Europe and Asia, with Germany's DAX up 22%, the UK's FTSE 100 up 20%, and Japan's Nikkei rising 26%.
The year was volatile due to tariffs and trade tensions. Trump-era tariffs in spring triggered a market slump before recovery amid changing policy stances. The US dollar experienced its worst first half in over 50 years amid these tariff-related dynamics.
Europe managed external shocks with stronger household consumption, falling unemployment, recovering confidence, and productivity improvements. European currencies strengthened against the dollar despite tariff challenges. Germany’s substantial fiscal stimulus supported upward revisions of growth forecasts for 2026–2028.
The AI-led rally dominated headlines, with major tech companies posting significant gains: Alphabet rose about 65%, Nvidia around 40%, Microsoft about 15%, and Oracle about 17%.
The year concludes with several markets closing on the last trading day including Japan, South Korea, and Thailand. London will observe a half-day tomorrow. Upcoming data releases include the US house price index at 2pm GMT and Federal Reserve minutes at 7pm GMT.
