(Jan 1): Stocks and bonds slipped along with gold and silver on the last day of 2025, bringing a subdued close to an otherwise buoyant year across asset classes that saw US equities post their third straight double-digit gain.
The S&P 500 extended a stretch of post-Christmas losses, paring the benchmark’s advance for 2025 to roughly 17%. The Nasdaq 100 was down 0.4%. Silver plunged as a run of heightened volatility featuring price moves of 5% or more entered a fourth day.
Investors have reaped strong returns this year in a market that has been powered by optimism about the vast economic potential of artificial intelligence and primed by several Federal Reserve interest-rate cuts. It hasn’t been a smooth ride, though, with traders weathering swings triggered by a range of forces including US trade policies, geopolitical tensions, concern over lofty valuations and expectations around the path of central bank monetary policy.
Beyond the advances in stocks, US Treasuries are poised to notch their biggest gains since 2020, while gold and silver remain on track for their best year since 1979. Crypto has been the big outlier, with Bitcoin facing a loss for the year after erasing an earlier rally that had sent it to a record in October.
“Describing 2025 as ‘resilient’ might be an understatement,” said Adam Turnquist, chief technical strategist for LPL Financial. “The economy showed remarkable strength by overcoming higher inflation, a slowing labour market, fewer rate cuts than originally expected, and a sharp rise in the effective tariff rate. Despite these challenges, growth remained steady without slipping into recession.”
The year’s momentum has faded in the final days of December, with traders delaying big decisions until after the holiday period, having already banked strong returns.
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“After an excellent year in equity markets, and with positioning close to highs in late November, portfolio and fund managers may have been closing their bets and realigning them to benchmark,” said Roberto Scholtes, head of strategy at Singular Bank. “Our base case is for the bull run to continue, albeit with more volatility and resulting in mid-single digit returns.”
Gold and silver stumbled on Wednesday in an otherwise banner year for precious metals. After an almost unstoppable rise, the two metals endured a series of swings in December that erased some gains as investors booked profits.
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“2025 was the year when diversification finally paid off. Equities delivered, but metals took the crown on erosion of confidence and a repricing of policy risk,” says Bloomberg strategists Brendan Fagan of Macro Strategist, Markets Live.
There was little market movement even after the release of US jobless claims data. Applications for US unemployment benefits fell last week to one of the lowest levels this year. Initial claims decreased by 16,000 to 199,000 in the week ended Dec 27, according to Labor Department data released on Wednesday. The median forecast in a Bloomberg survey of economists called for 218,000 applications.
Treasuries ticked lower, with the 10-year yield at 4.14%.
The dollar fluctuated after a three-day stretch of wins. The recent advance did little to prevent the greenback from heading towards its worst annual retreat in eight years, with investors saying more declines are coming if the next chief of the Federal Reserve opts for deeper interest-rate cuts than currently expected.
Meanwhile, Bitcoin traded near US$87,800. The digital currency has settled into a range of roughly US$85,000 to US$95,000 following a crash in October that has put it on pace for a first annual loss in three years. After kicking off 2025 with a rally that was spurred by optimism about the crypto-friendly policies of the second Trump administration, Bitcoin was hit by the uncertainty surrounding US tariffs.
Oil headed for its steepest annual loss since the start of the pandemic in 2020, in a year that has been dominated by steadily rising supplies across the globe. Brent steadied close to above US$61 a barrel, with traders’ near-term focus on an Opec+ meeting at the weekend, a bearish US industry report and American policies towards Russia, Iran and Venezuela.
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