Ending 2025: markets lose steam. After a record year, caution returns

Global stocks end the year out of breath after an exceptional rally. With precious metals soaring, the dollar weakening and political tensions rising, investors look to 2026 with enthusiasm… but also with caution.

2025 ends with a slight pullback for global markets. In the final trading session of the year, equity indices trimmed part of the gains accumulated during an extraordinary twelve-month stretch, while U.S. futures pointed to a weaker open for the S&P 500 and the Nasdaq 100. In Asia—where several exchanges had already closed out the year—thin trading volumes accompanied a further decline in indices, despite their best annual performance since 2017.

The real jolt of the day, however, came from precious metals: silver plunged 6% in just a few hours, yet remained the standout performer of 2025 with a staggering 147% annual gain. Gold and silver sealed their best year since 1979, in stark contrast to Bitcoin, which was heading for its second annual drop in four years. The U.S. dollar, weakened by a more accommodative Federal Reserve, recorded an 8.1% decline—its sharpest since 2017.

Despite the turbulence, the MSCI All Country World Index ended the year with a solid 21% rise, driven by optimism around economic growth, corporate earnings and, above all, U.S. rate cuts. 2025 was also marked by Donald Trump’s return to the White House—an event that initially rattled global markets before revitalizing sectors such as European defense and fueling fresh speculative waves.

Now all eyes turn to 2026, where sentiment is more mixed. Stretched valuations and divisions within the Fed over the scope for further monetary easing are tempering investor enthusiasm. “Global indices lost momentum toward year-end,” noted Kathleen Brooks of XTB, explaining that many market participants prefer to wait until after the holiday break to recalibrate their strategies.

Still, 2025 will be remembered as a standout year: amid rallies driven by expectations, political bets and high-octane leverage, some investors seized extraordinary opportunities. Others, however, saw their positions unravel when momentum suddenly reversed. A timely reminder, on the eve of the new year, that in financial markets, euphoria is always something to handle with care.

Andrea Pelucchi