The stock market posted stellar year-end returns as markets closed Wednesday for the last time in 2025. The performance marked three straight years of double-digit gains.
the&The P 500 finished the year up 16%, while the tech-heavy Nasdaq rose 19%. The Dow Jones Industrial Average closed 2025 up 13%. A drop in each of the indexes on Wednesday left markets lower in the last trading session of the year.
Each of the major indexes hit an all-time high in 2025, quickly outpacing tariffs, a government shutdown and fears of an artificial intelligence bubble.
Analysts attributed the rise in stock prices this year to overlapping trends: resilient corporate earnings, a series of interest rate cuts aimed at boosting hiring and nearly endless enthusiasm for AI.
Chip giant Nvidia, the world’s largest company by market capitalization, ended the year up 39%.
Tariffs, which threatened to derail markets in the spring, were eased during the second half of the year.
People walk in front of the New York Stock Exchange (NYSE) on December 30, 2025 in New York City.
Spencer Platt/Getty Images
One day after the tariffs were announced on April 2, major stock indexes lost about $3.1 trillion in value. The selloff represented the biggest daily decline in markets since the start of the COVID-19 pandemic. Days later, a large portion of the tariffs were suspended, causing one of the largest single-day increases in market history.
“While tariffs remain a source of uncertainty, markets are pricing in limited disruption,” JPMorgan Wealth Management he said in a note to investors last month.
Although markets proved resilient, this year’s gains remained concentrated in a handful of tech giants, known as the Magnificent Seven: Alphabet, Amazon, Apple, Meta, Microsoft, Tesla and Nvidia. In September, concerns about AI poured cold water on those stocks, causing their prices to falter.
In November, Nvidia’s blockbuster earnings helped refute fears about AI and lift markets out of the doldrums. Still, some analysts have continued to express concern about the market’s reliance on AI, as tech companies face greater pressure to turn massive capital investments into profits.
