S&P 500 Ends 2025 With 17% Gain

U.S. stocks traded narrowly Wednesday as Wall Street headed toward the final stretch of 2025, capping another strong year for equities despite a recent bout of mild selling.

The S&P 500 hovered near flat in early trading and remains on track to finish the year up roughly 17%, marking its third consecutive year of double-digit gains.

The Nasdaq Composite has climbed about 21% in 2025, fueled largely by continued enthusiasm around artificial intelligence, while the Dow Jones Industrial Average is up approximately 13%, weighed down by its relatively limited exposure to major technology stocks.

The late-year calm follows a modest three-session losing streak, though declines have been restrained. The market’s resilience stands in sharp contrast to early April, when stocks sold off aggressively after President Donald Trump announced sweeping tariffs. At its low, the S&P 500 fell nearly 19% from its February peak and briefly dipped below the 5,000 level for the first time since April 2024.

Recent weakness has raised some eyebrows given seasonal trends. The final five trading days of the year — plus the first two sessions of January — are traditionally associated with the so-called “Santa Claus rally,” a period that often delivers a late boost to equities. This year’s profit-taking could signal a more volatile start to 2026.

Strategists broadly expect gains to continue next year, but with less momentum. Many anticipate another double-digit advance for the S&P 500 in 2026, while cautioning that markets may trade sideways for extended periods as earnings growth works to justify elevated valuations.

“As we look toward next year, we’re expecting a little bit more volatility,” said Meghan Shue, head of investment strategy and portfolio construction at Wilmington Trust. She described the recent pullback as a “healthy churn” that could reset markets for the next phase of the bull cycle, while noting that recession risks remain elevated.

Artificial intelligence has been the dominant market narrative for much of the past three years. After the S&P 500 surged 24% in 2023 and another 23% in 2024, the AI-driven rally broadened in 2025, with performance diverging among the largest technology companies.

Alphabet emerged as a standout, rising more than 65% on optimism that it could gain ground against OpenAI, while Amazon lagged, posting a gain of roughly 6%.

Strength was not confined to equities. Commodities outperformed many asset classes this year, with gold climbing more than 66% and silver surging over 165%, underscoring broader investor demand for inflation hedges and alternative stores of value.

Stocks are also poised to close December in positive territory. The Dow is up 1.4% for the month, on track for its eighth consecutive monthly gain, a streak not seen since 2018.

The S&P 500 has added 0.7%, also eyeing an eight-month winning run, while the Nasdaq is modestly higher, heading for its eighth positive month in nine.

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