Wall Street ends 2025 near record highs after year of economic upheaval

"Wall Street finished 2025 near record highs on Wednesday, as ballooning tech valuations and hopes of lower interest rates helped stock markets defy a year of economic uncertainty. The benchmark S&P 500 rose 16.4% over the course of the year, closing at 6,845.50 on New Year's Eve in New York, as investors largely shrugged off geopolitical uncertainty and the frenzy around artificial intelligence continued."

"Other global indices had an even stronger year. In London, the FTSE 100 enjoyed its biggest annual gain since 2009, advancing 21.5%. The Dow Jones Industrial Average gained 13.4% during 2025. The tech-focused Nasdaq Composite rallied 20.5%. A line chart showing S&P 500 Donald Trump's aggressive plan to impose sweeping US tariffs on imports from across the world spooked investors in the spring but acute anxiety gave way to a stubborn cynicism around the so-called Taco trade: Trump Always Chickens Out."

"While the US president did roll back some tariffs in response to concerns over their impact on American consumers and businesses, tariffs have surged to the highest average effective rate since 1935. The longest US government shutdown in history also shrouded the economic landscape in a further layer of fog, as inflation held firm, jobs growth stalled, and the Federal Reserve weighed highly-anticipated decisions on rates."

U.S. stock indices ended 2025 near record highs, with the S&P 500 up 16.4%, the Nasdaq up about 20.5%, the Dow up 13.4%, and the FTSE 100 surging 21.5%. The market rally was concentrated in technology, fueled by intense interest in artificial intelligence and standout gains from companies like Nvidia, which reached a $4 trillion market value. Trade-policy jitters, including high tariffs and an aggressive tariff plan that alarmed investors, contrasted with tariff rollbacks on some items. The economy also faced the longest government shutdown, persistent inflation, stalled job growth, and ongoing Federal Reserve rate deliberations.

Read at www.theguardian.com