Global Stocks Ease Into Year-End After Strong 2025 Gains
This article first appeared on GuruFocus.
Global equities edged lower on the final trading day of 2025, paring some of the gains that delivered a third straight annual advance, as light holiday liquidity weighed on sentiment. Shares in Australia slipped, while S&P 500 (SPY) and Nasdaq 100 (NASDAQ:QQQ) futures both dipped 0.1% after US benchmarks retreated overnight. Several Asian markets, including Japan and South Korea, were already closed for the year. Gold inched higher as silver dropped 2.6%, even as the MSCI All Country World Index still notched a 21% gain for 2025, supported by Federal Reserve rate cuts and sustained enthusiasm around artificial intelligence. Asian equities are heading for their strongest annual performance since 2017, while a Bloomberg gauge of the dollar fell 8.1%, its biggest annual decline since that year.
Under the surface, 2025 delivered sharp divergences across asset classes. Precious metals posted standout gains, with gold and silver set for their best annual jumps since 1979, and silver outperforming most assets with a 155% surge. Bitcoin, by contrast, was poised for its second annual decline in four years. Oil headed toward its deepest yearly loss since the pandemic in 2020, pressured by concerns about a significant supply surplus that could shape trading into the new year. Equities reached record highs during the year as optimism around growth, earnings, and looser monetary policy helped markets rebound from an April slump triggered by tariffs announced under President Donald Trump, though momentum faded into year-end as valuations climbed and policymakers appeared more divided on the scope for further easing, according to the minutes of the Fed’s December meeting.
Looking ahead to 2026, investors are weighing a resilient backdrop against signs of fatigue after strong returns. Strategists note that markets are entering the new year with tempered risk appetite, even as underlying support for US equities remains in place. Currency moves in Asia have also drawn attention, with the onshore yuan strengthening past the closely watched 7-per-dollar level for the first time since 2023. Seasonally, history offers some encouragement: MSCI’s global equity gauge has risen an average 1.4% in January over the past decade and advanced in six of those years. Still, as one analyst put it, markets appear to be pricing in conditions that could be close to ideal, suggesting early-2026 performance may depend on whether economic data and policy decisions can keep pace with those expectations.
