Wed, 31 Dec 2025

Wed, 31 Dec 2025 US stock market ends 2025 on a high note after volatile year

It's been a roller coaster year for the stock market, but the S&P 500 is set to end 2025 up about 17%, the third straight year of double-digit gains.
US stock markets are ending the year on a high note, with the S&P 500 index up around 17% and the Nasdaq Composite index poised for a 21% gain. Despite initial concerns over President Trump's trade tariffs, markets have rebounded strongly since summer. Strong company profits and investments in artificial intelligence (AI) have driven growth, particularly in tech-heavy stocks such as Nvidia, Apple, Microsoft, Amazon, and Alphabet. However, some analysts warn of an AI bubble bursting due to rising valuations. Meanwhile, the economy has shown resilience despite jitters about interest rates and geopolitical tensions. The US labour market is experiencing weakness, with a rising unemployment rate, while negotiations over trade tariffs are set to continue in 2026. The upcoming leadership change at the Federal Reserve, as President Trump announces a new chair to succeed Jerome Powell, will be closely watched by investors. Analysts predict another strong year for stocks, but warn of potential volatility ahead. Some analysts express concerns about stock valuations, with some predicting subdued returns over the next decade. Others point to ongoing economic uncertainties and potential risks from trade policies as reasons for caution.
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