Matthew Griffin of Bloomberg reports Wall Street Remembers a Wild 2025:

Jed Ellerbroek barely slept.

It was the evening of Wednesday, April 2, and President Donald Trump had just appeared in the White House Rose Garden, brandishing a large placard with the punitive tariff rates he was slapping on countries around the world. On Wall Street, it quickly sunk in that Trump was serious about shattering a global trading system that he said was wired against the US.

Over dinner with his family and throughout the night — as Asian markets tumbled, initiating a meltdown that would continue around the globe — Ellerbroek, a portfolio manager at Argent Capital Management, tried to game out what would happen next.

When he and his team hunkered down the next morning at their office in St. Louis, they sought to work through the implications for their stock holdings. As the selloff raged that day, Amazon.com Inc. — their largest position — tumbled nearly 10%.

Like investors from Tokyo to New York, Ellerbroek was getting a frantic crash course in navigating what would be an unusually volatile year. The S&P 500 Index careened to the cusp of a bear market. Then sentiment reversed almost as quickly, unleashing one of the swiftest stock recoveries in decades and sending the benchmark back to new record highs. The overall lesson was that not panicking — or taking the leap to buy the dips — paid off.

The twists and turns of the US economy and the artificial-intelligence boom both played a role. But much of it could be traced to the White House.

“Volatility is a feature, not a bug,” Irene Tunkel, chief US equity strategist at BCA Research, said of the Trump administration’s effect on markets. “This year rewarded people who were very nimble, very humble and were very willing to incorporate new information.”

Also, she said: “You had to be brave.”

Here are some recollections from money managers and strategists about how they navigated the most pivotal market moments of 2025:

Jan. 27: DeepSeek

Venture capitalist Marc Andreessen on Jan. 26 called it “AI’s Sputnik moment.” The rollout of a powerful, seemingly low-cost AI program by DeepSeek, a Chinese upstart, appeared to threaten the foundations of the recent US tech boom. When US markets opened the next day — a Monday — Nvidia Corp. shares plunged 17%, erasing nearly $600 billion from its value in the largest wipeout in market history. Semiconductor stocks had the worst day since March 2020.

Nancy Tengler, the head of Laffer Tengler Investments Inc., said her heart raced as she scrolled her phone, trying to catch up with the news while in the car on her way to CNBC for a television interview. As the details became clear, she said her reaction was, “This is an opportunity.”

Like some others, she was skeptical of DeepSeek, thinking it had low-balled its cost estimates. She struck a bullish tone toward tech stocks in her TV appearance. Her firm snapped up shares of Nvidia and other AI favorites.

It turned out to be a good call. DeepSeek didn’t sound the death-knell of the American approach to AI or stanch the flood of big-tech spending to develop the technology. The Nasdaq 100 Index was back at a record high within a month and went on to a 21% gain in 2025. Nvidia is up 40% this year.

April 2: ‘Liberation Day’

Garrett Melson’s first reaction was shock. Then in the coming hours, as markets tumbled and social-media users tried to piece together what exactly Trump had just done, the fleeting relief of gallows humor: Trump’s trade war, as was soon caught, had gone so far as to penalize uninhabited islands near Antarctica that are populated by penguins.

“Watching a sea of red on your screen, sometimes you have to laugh a little bit,” said Melson, a portfolio strategist at Natixis Investment Managers Solutions.

It was the biggest two-day jolt to global markets since March 2020, when the pandemic started shutting down the US. It set off days of panicked selling when China retaliated, recession fears flared, and Treasuries slid — breaking from their typical haven role — as Trump’s willingness to challenge the global economic order cast doubt on the safety of US government debt.

In the days after the president’s announcement, Melson worked with his colleagues late into the evening and during the weekend running analyses, staring at charts and cranking out commentary for clients. In one portfolio model, the team increased its allocation to US stocks and corporate bonds.

At Argent, Ellerbroek sent an email to the investment team on April 4. “This is a scary moment,” he wrote. “If you made me pick whether we are closer to the start or finish of this episode, I’d probably say start.” Ellerbroek stuck to his positions, deciding against snapping up beaten-down stocks because there was simply too much uncertainty.

Neil Sutherland, a fixed-income investor at Schroder Investment Management, and his colleagues started a project to track the fallout. They updated the average US tariff rate on affected countries as Trump kept rolling out new salvos, modeling the asset-price implications and relaying their findings to anxious clients. Eventually, they gave up.

“It just honestly became meaningless because it would change in the space of five minutes,” Sutherland said. “We just had to come to realize that it’s a moving target.”

April 9: The Tariff Pause

Tunkel, the BCA stock strategist, had taken the day off to hunt for a house in Boca Raton, Florida. It had been a relatively quiet day for stocks, with the S&P 500 drifting sideways. But she stayed tuned to the radio during the three-hour drive from her home in Venice, on the Gulf Coast.

Then, when she stopped for lunch and tuned out, the fear that descended on Wall Street days earlier quickly gave way to euphoria. At 1:18 p.m., after the bond-market selloff raised fears in Washington by pushing interest rates higher, Trump announced he was pausing many of his tariffs for 90 days. The S&P 500 surged 7% in less than 10 minutes and went on to a 9.5% gain — its biggest one-day jump since October 2008.

“This magnitude of the moves in response to the piece of news — I think this is something that is historical,” Tunkel said. “We’ll always remember those moments.”

Jay Woods, the chief market strategist at Freedom Capital Markets, saw the moment firsthand from his perch at the New York Stock Exchange. After the initial roar faded, he prepared to welcome a group of visitors. He was teaching a class in technical analysis at Fordham University. By chance, he had scheduled a field trip for his students to visit.

By the time they arrived, the Big Board was a sea of green — nearly everything up, with the so-called fear gauge, the VIX, one of the few exceptions. Alerts rang out constantly from brokers’ desks, including some with the ring of a cash register’s chime.

The day set up a dynamic that would occur repeatedly over the next several months and came to be known as the TACO trade, short for Trump Always Chickens Out. Traders started to discount his worst tariff threats, wagering they were only a negotiating tactic. Selloffs, therefore, were buying opportunities.

Chase Games, one of Woods’ students, was sucked in by the excitement. Visiting the exchange was “obviously a huge dream of mine,” said Games. “I lucked out.” In October, he started working as an intern at Woods’ firm, Freedom Capital.

June 21: Bombing of Iran

It was a Saturday evening in New Jersey, and Siebert Financial’s Mark Malek was celebrating his recent birthday when he learned the US had bombed Iran’s nuclear sites, a move that traders feared could dangerously escalate the conflicts in the Middle East.

“If this is true, my phone is going to ring,” Malek told his family at the French restaurant in Asbury Park. Soon enough it did.

For all the risks, Malek wagered — counterintuitively — that stocks would rise. The S&P 500 had already pulled back recently as traders started fretting about a widening conflict between Israel and Iran. But he thought the US wouldn’t escalate the conflict from there and the market’s reaction would ultimately be relief.

Sure enough, the S&P 500 advanced roughly 1% on Monday — and then again on Tuesday — as Trump moved toward a ceasefire. It went on to end the week at another record high.

Oct. 10: Crypto Dives

“What is going on?” Jeff Dorman thought as crypto markets nosedived. Trump had threatened an additional 100% tariff on China and traders were dumping risk assets. And Bitcoin, which had recently pushed over $125,000, was sliding as leveraged bets were unwound.

Messages on Slack piled up at Arca, a crypto asset manager where Dorman is chief investment officer. He was at home, but soon he and his team were on a Zoom call. They made a plan to cover short positions by snapping up assets that had tumbled.

In their early days investing together, it would have taken them all night. After years of experience, they’d learned to draw up a plan and leave the execution to their traders. The CIO took stock of the situation, went to bed and “slept like a baby.”

Dorman remains bullish on segments of the crypto sector. Still, the moment, for now, has deflated the euphoria for crypto that swept through markets for much of the year as Trump championed the industry.

It also has bucked the buy-the-dip formula that’s paid off elsewhere in 2025. Bitcoin is heading to its first annual drop since the 2022 crash, and other popular cryptocurrencies have tumbled over the past two months. That has hammered crypto-linked shares like the stockpiler Strategy Inc. and the Trump-family-affiliated American Bitcoin Corp.

Nov. 21: Year-End ‘Sigh of Relief’

It had looked like the retreat from risk was poised to drag down the broader stock market, too, as worries about frothy AI valuations and the Federal Reserve’s rate-cut path weighed on the S&P 500.

The worries didn’t last. On Nov. 21, stocks started bouncing back on anticipation that the cooling labor market would prod the Fed to continue easing monetary policy, as it did when it met on Dec. 10.

Meanwhile, the economy has kept on defying recession fears despite Trump’s trade war, federal-employee job cuts and a Congressional standoff that caused a record-long government shutdown. The AI boom, for all the bubble talk, hasn’t turned to bust. And whomever Trump picks to replace Fed Chair Jerome Powell next year is seen as likely to back Trump’s push for even faster rate cuts.

That has sowed a late-year sense of optimism heading into 2026. After this year’s gains stung anybody who stuck to bearish calls, Wall Street strategists are anticipating that the S&P 500 will rise for a fourth straight year. If they’re right, that would be the longest winning streak in nearly two decades.

“Overall,” Freedom Capital’s Woods said, “there’s a sigh of relief that we’ve gotten through some of the biggest waves that were thrown at this market.”

Stan Choe of the Associated Press also reports US stocks rose again in 2025 after overcoming turbulence from tariffs and Trump's fight with the Fed:

It was a scary good year for investors.

It was scary because the U.S. stock market plunged to several historic drops on worries about everything from President Donald Trump’s tariffs to interest rates to a possible bubble in artificial-intelligence technology. In the end, though, it was a great year for anyone with the stomach to stick through the swings.

S&P 500 index funds, which sit at the heart of many savers’ 401(k) accounts, returned more than 18% in 2025 through Dec. 11 and set a record high that day. It’s their third straight year of big returns.

Here’s a look at some of the surprises that shaped financial markets along the way:

Tariff tremors

Trump dropped the biggest surprise on “Liberation Day” in April, when he announced a sweeping set of tariffs that were more severe than investors expected.

It immediately triggered worries about a possible recession and spiking inflation. The S&P 500 plunged nearly 5% on April 3 for its worst day since the 2020 COVID crash. The very next day, it dropped 6% after China’s response raised fears of a tit-for-tat trade war.

The tariffs’ impact went beyond the stock market. The value of the U.S. dollar fell, and fear even shook the U.S. Treasury market, which is seen as perhaps the safest in existence.

Trump eventually put his tariffs on pause on April 9 after seeing the U.S. bond market get “queasy,” as he put it, which sent relief through Wall Street. Since then, Trump has negotiated agreements with countries to lower his proposed tariff rates on their imports, helping calm investors’ nerves.

Wall Street motored higher through a remarkably calm summer thanks to euphoria around artificial-intelligence technology and strong profit reports from companies. The market also got a boost from three cuts to interest rates by the Federal Reserve.

Trade worries can still cause havoc in markets, and Trump sent stocks spiraling as recently as October with threats of higher tariffs on China.

Trump and the Fed

Another surprise was how hard, and how personally, Trump lobbied to get the Federal Reserve to lower interest rates.

The Fed has traditionally operated separately from the rest of Washington, making its decisions on interest rates without having to bend to political whims. Such independence, the thinking goes, gives it freedom to make unpopular moves that are necessary for the economy’s long-term health.

Keeping interest rates high, for example, could slow the economy and frustrate politicians looking to please voters. But it could also be the medicine needed to get high inflation under control.

As inflation stubbornly remained above the Fed’s 2% target, the central bank kept rates steady through August. This drew Trump’s ire – even though it was his own trade policies that were driving fears about inflation higher.

Trump continuously picked on Fed Chair Jerome Powell, even giving him the nickname “Too Late.” Their tense relationship reached a head in July when Trump, in front of cameras, accused Powell of mismanaging the costs of a renovation of the Fed’s headquarters. Powell, in turn, shook his head.

Even though Wall Street loves lower rates, the personal attacks caused some queasiness in financial markets because of the possibility of a less independent Fed. Powell’s turn as Fed chair is set to expire in May, and the wide expectation is that Trump will choose a replacement more likely to cut rates.

Good but not first

“America first” didn’t extend to global markets. Even as U.S. stocks soared to another double-digit gain, many foreign markets fared even better.

The technology frenzy that helped fuel gains for the S&P 500 and the Nasdaq composite drove Korea’s KOSPI higher in 2025, enjoying its biggest gain in more than two decades. South Korea is a technology hub and companies including Samsung and SK Hynix surged amid the focus on artificial intelligence investments and advancements.

Japan’s Nikkei 225 had a double-digit gain for a third straight year. Besides the focus on AI and the technology sector, the gains were boosted in October and November following national elections and plans for a $135 billion stimulus package.

European markets also had a strong year. Germany’s DAX got a boost as the government announced plans to ramp up spending on infrastructure and defense, which could fuel economic growth in Europe’s largest economy.

The European Central Bank spent the first half of the year cutting interest rates, which helped give financial markets across Europe a boost. France’s CAC 40 was a laggard, up 10% as of Monday.

Crypto’s ups and downs

Even with a reputation for volatility, cryptocurrencies still managed to surprise market watchers.

Bitcoin dropped along with most other assets early in the year as Trump’s trade policies scared investors away from riskier investments.

The most widely used cryptocurrency roared back as the White House and Congress threw their support behind digital assets and the Trump family launched a number of crypto ventures. Retail investors joined in by pouring money into bitcoin ETFs, stock-like investments that allowed them to benefit from the run-up in price without having to actually store bitcoin in digital wallets. Some companies, notably Strategy Inc., made buying and holding crypto the crux of their business and their stocks jumped.

Bitcoin and hit a high around $125,000 in early October. But, almost as quickly, digital assets tanked as investors worried the prices for shining stars such as tech stocks and crypto had jumped too high. As of Monday afternoon, bitcoin traded around $89,400, down roughly 28% from the peak and 4% below where it started the year.

What’s ahead?

Many professional investors think more gains could be ahead in 2026.

That’s because most expect the economy to plod ahead and avoid a recession. That should help U.S. companies grow their profits, which stock prices tend to track over the long term. For companies in the S&P 500, analysts are expecting earnings per share to rise 14.5% in 2026, according to FactSet. That would be an acceleration from the 12.1% growth estimated for 2025.

But some of this year’s concerns will linger. Chief among them is the worry that all the investment in artificial-intelligence technology may not produce enough profits and productivity to make it worth it. That could keep the pressure on AI stocks like Nvidia and Broadcom, which were responsible for so much of the market’s gains this year.

And it’s not just AI stocks that critics say are too pricey. Stocks across the market still look expensive after their prices climbed faster than profits.

That has strategists at Vanguard estimating U.S. stocks may return only about 3.5% to 5.5% in annualized returns over the next 10 years. Only twice in the last 10 years has the S&P 500 failed to meet that bar, assuming this year ends without another sell-off.

At Bank of America, strategist Savita Subramanian says the S& P 500 could rise by less than half as much as profits do in 2026. She said that could be a result of companies reducing stock buybacks, as well as global central banks implementing fewer rate cuts.

2025 was a wild and crazy year, no doubt about it.

We all knew President Trump was assuming office and that he'd implement his agenda but it's the way he implemented it that unnerved investors and roiled markets across the world.

The thing that stands out to me the most was 'Liberation Day' and how stock sank fast and then subsequently made an incredible recovery.

The biggest gain from post-Liberation Day lows were once again in tech stocks but other sectors also followed suit and did very well -- like financials, industrials and utilities:

Concentration risk remained high in 2025 as Mag-7 still dominated headlines but not as much as the previous year and even among the Mag-7, performance diverged wildly with Google and Nvidia outperforming the others by a wide margin (was more like a Mag-2 year).

It was also a year where Mag-7 expanded to Mag-10+ with Broadcom, AMD, Micron Technology asserting themselves.

And the AI trade wasn't just in tech, AI-related utilities surged as well with Vertiv, GE Vernova and Eton taking off as well.

Globally, stock markets surged as investors diversified away from the US to more value oriented or cyclical markets with strong exposure to mining shares which did well.

The S&P 500 was up 17.4% this year when US markets closed on Monday, undershooting the 29% gain for the MSCI All Country World ex-US index by the widest margin since the global financial crisis in 2009. https://t.co/JT6Y45RHfQ pic.twitter.com/wivpY8qAe3

— Lisa Abramowicz (@lisaabramowicz1) December 30, 2025

It was the year where precious metals like platinum, silver and gold all took off while bitcoin and other cryptos got clobbered.

The risk of inflation from tariffs remained omnipresent throughout 2025 which is one factor helping precious metals reach record levels, but it was heightened geopolitical risk that added fuel to the fire.

The Fed cut rates three times this year but further rate cuts in question as Fed policymakers deeply divided over December cut, minutes show:

Federal Reserve policymakers were deeply divided over the decision to cut interest rates at their meeting in December as the U.S. economy faces a challenging combination of risks, according to the minutes from their latest policy meeting.

The Fed cut rates by 25 basis points for the third straight time at their December meeting, lowering the benchmark federal funds rate to a range of 3.5% to 3.75%. The decision occurred against the backdrop of a slowing labor market with inflation elevated above the Fed's 2% target, a dynamic which puts both sides of the central bank's dual mandate at risk.

Two voting members of the Federal Open Market Committee dissented in favor of leaving rates unchanged, while one dissented in favor of a larger 50 basis point cut. Further, six officials released economic projections suggesting that they were opposed to a cut.

"Most participants" voted in favor of a cut, while "some" of those policymakers argued that it was an appropriate forward-looking strategy that would "help stabilize the labor market" amid a recent slowdown in job creation. However, others "expressed concern that progress towards the committee's 2% inflation objective had stalled."

"Some participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target rate unchanged for some time after a lowering of the range at this meeting," the minutes said.

Policymakers including Fed Chair Jerome Powell have suggested that the central bank's policy level is now closer to neutral and that further rate cuts may be on hold in the new year as they await fresh economic data, after the historic 43-day government shutdown that ended in November delayed key economic reports in the final months of the year.

Some of the policymakers who were opposed or skeptical of the decision to cut rates in December "suggested that the arrival of a considerable amount of labor market and inflation data over the coming intermeeting period would be helpful on making judgments about whether a rate reduction was warranted."

December inflation and labor market data is due to be released on Jan. 9 and Jan. 13, as the federal agencies tasked with collecting data and compiling economic reports return to their normal release schedule in the wake of the shutdown.

The minutes also showed that policymakers are monitoring for signs of a "K-shaped" economy in which there's a divergence in the spending patterns of high- and low-income households.

"A majority of participants mentioned evidence of stronger spending growth for high-income households, while lower-income households had become increasingly price sensitive and were making adjustments to their spending in response to the outsized cumulative increase in the prices of basic goods and services over the past several years," the minutes said.

The Fed will hold its next monetary policy meeting on Jan. 27 and Jan. 28 and the market sees a higher likelihood that it will hold rates steady.

The probability of the Fed leaving rates at its current range of 3.5% to 3.75% is currently 85%, up from 67.1% a month ago, according to the CME FedWatch tool. 

I'd personally be very surprised if the Fed cut rates in the first quarter of next year unless something breaks in financial markets.

Alright, let me wrap it up with the best and worst performing US large cap stocks in 2025 (full list available here): 

 

Let me wish everyone a Happy & Healthy New Year! Goodbye 2025, hello 2026!

Below, the CNBC Investment Committee size up the path for stocks as we close out 2025 (from Tuesday).

Also,Adam Parker, Trivariate, Meghan Shue, Wilmington Trust, and Scott Wren, Wells Fargo, join 'Closing Bell' to talk the day's market action and what is ahead for 2026.

Third, Jeff Hirsch, CEO of Hirsch Holdings says 2025 reset—not ended—the bull market. He expects 2026 volatility to resolve higher, driven by liquidity, earnings strength, and an AI super boom.

Fourth, David Katz, CIO at Matrix Asset Advisors, says the Santa rally came early and 2026 will favor market rotation. He expects value, dividends, and small caps to catch up, urges caution on commodities, and sees steadier not explosive tech gains.

Lastly, Ed Price, NYU senior fellow, talks the stakes of geopolitics across the globe as conflicts escalate in Venezuela, Taiwan and Nigeria and breaks down what US involvement means for the global economy.