FX.co ★ Wall Street Pulls Back Into Year End, Cap Strong 2025

U.S. stocks concluded the final trading session of the year on a downnote, as 2025 proved to be a turbulent period. Investors opted to curtail their risk exposure as the year drew to a close and absorbed the insights from the latest Federal Reserve minutes. The S&P 500 decreased by 0.6%, the Nasdaq declined by 0.7%, and the Dow Jones Industrial Average slipped by 0.4%, extending a slight retreat following Christmas. Nonetheless, equities ended the year with substantial gains: the S&P climbed approximately 16.6%, and the Nasdaq surged 20.4%. This marked the third consecutive year of double-digit returns, predominantly fueled by growth in artificial intelligence. The Dow increased 13.2%, partially constrained by its limited involvement with large-cap technology stocks. Throughout the year, markets contended with tariff-induced volatility, geopolitical risks, elevated valuations, and changing expectations regarding U.S. monetary policy. The Federal Reserve minutes highlighted differences of opinion concerning the timing and pace of anticipated rate cuts in 2026, but maintained an inclination toward easing. The late-December fluctuations in gold and silver markets underscored end-of-year rebalancing and a cautious approach as investors looked towards early 2026.