Wall Street's Wild Ride in 2025: Tariffs, Tech, and Triumphs

In 2025, the U. S. stock market had a rollercoaster year. It faced many challenges, but in the end, it ended up being a great year for investors who stayed patient. The S&P 500 index funds, which are a big part of many people's retirement savings, saw returns of over 18% by December 11. This was the third year in a row with big gains. But the journey wasn't smooth. Early in the year, President Donald Trump announced big tariffs. This caused a lot of fear. The stock market dropped a lot, and people worried about a recession and high inflation. The value of the U. S. dollar also fell, and even the usually safe U. S. Treasury market felt the impact. Later, Trump put the tariffs on hold, which calmed investors. The market then had a good summer, thanks to excitement about artificial intelligence and strong company profits. The Federal Reserve also cut interest rates three times, which helped boost the market. But trade worries kept coming back. In October, Trump's threats of higher tariffs on China caused another drop in the market.Another big surprise was how much Trump pushed the Federal Reserve to lower interest rates. The Fed usually makes decisions independently, but Trump's pressure raised concerns about the Fed's independence. Fed Chair Jerome Powell's term is ending in May, and many expect Trump to choose a new chair who will cut rates. While U. S. stocks did well, many foreign markets did even better. South Korea's KOSPI had its biggest gain in over two decades, thanks to its tech industry. Japan's Nikkei 225 also had a good year, boosted by elections and a big stimulus package. European markets did well too, with Germany's DAX getting a boost from infrastructure and defense spending plans. Cryptocurrencies also had a wild year. Bitcoin dropped early in the year but then rose to around $125, 000 in October. But then it dropped again, ending the year around $89, 400. Looking ahead to 2026, many investors think there could be more gains. They expect the economy to keep growing, which should help company profits. But there are still concerns, like whether AI investments will pay off and if stock prices are too high.