US Markets: A Year of Big Wins and Big Swings

The US stock market is on track to finish a remarkable three-year streak. The S&P 500 is up 17% this year, adding to gains of 23% in 2024 and 24% in 2023. This rare feat has only happened five times since the 1940s. What drove these gains? Strong company earnings, excitement about AI, and hopes for lower interest rates from the Federal Reserve. Despite worries about trade wars, political chaos, and even a government shutdown, stocks kept climbing. The year wasn't smooth sailing. In January, fears about AI spending caused a market dip. Then, in spring, President Trump's tariffs shook things up. But markets bounced back as Trump softened his stance, and strong earnings kept stocks rising. Tech stocks, especially those tied to AI, led the way. The Nasdaq, packed with tech giants, rose 21%, making it the top performer for three straight years. Meanwhile, the Dow Jones gained 13. 7%, hitting new highs.Volatility was a big part of the story. The VIX, Wall Street's fear gauge, spiked in April and June but calmed down later in the year. Bonds had their own ups and downs. The 10-year Treasury yield dropped from 4. 57% to 4. 12%, helping keep mortgage rates in check. The 30-year yield ended slightly higher at 4. 8%, as inflation worries lingered. The US dollar had its worst year since 2017, falling 9. 5% against other major currencies. This drop boosted international stocks, which did even better than US markets. South Korea's Kospi surged 76%, and Japan's Nikkei gained 26%. Precious metals shined bright. Gold soared 66%, its best year since 1979. Silver had an even bigger jump, rising 164%. Platinum and palladium also saw big gains. Commodities had a mixed year. Copper rose 43%, its best gain since 2009. Oil prices fell about 18%, while cocoa tumbled 48% after a huge spike last year. Bitcoin started strong but ended with a loss of 6. 6%, closing around $88, 000.