As 2025 draws to a close, it’s worth reflecting on a year that tested assumptions as markets delivered drama, recovery and a reminder that narratives can change faster than most expect.
The year split neatly into two acts. The first half brought genuine turbulence, the second a comeback that few predicted in February.
January’s DeepSeek shock set the tone early. When the Chinese start-up revealed it had built a frontier artificial-intelligence (AI) model for just $5.6m, Nvidia lost nearly $600bn in value in a single session. Upon taking office, US president Trump unveiled a blitz of executive orders that threatened to reshape the global order and trade policy overnight. This was the opening act to months of policy volatility.
The Nasdaq fell over 10% in the opening quarter, with the S&P 500 down 4.4%, as investors questioned whether the AI trade had run too far and worried about looming trade tensions.
On April’s Liberation Day, Trump announced sweeping tariffs on virtually every country on the planet, with the US and China hitting each other with a series of tit-for-tat tariffs before seemingly coming to a truce. Nations lined up to start brokering trade agreements with the US in a bid to lower their tariff burdens, leading to a period of uncertainty.
But markets rarely follow a straight line. September’s Federal Reserve rate cuts marked the turning point, signalling that inflation pressures were easing. The AI rally resumed as hyperscalers demonstrated their value, proving that infrastructure and scale still mattered.
At the time of writing (as you read this, I’ll be taking a festive break with the family), the S&P 500 had recovered to post a 15.3% gain year-to-date, and the Nasdaq is up 20.4%. These markets lagged behind the FTSE All Share (22%), EuroSTOXX (22.9%), Nikkei 225 (25.9%) and MSCI Emerging Markets (27.7%), however.
Beneath the equity market headlines, other assets told their own stories. Gold hit record highs in the third quarter, acting as a hedge against trade war rhetoric. Bitcoin surged past $124,000 by August before plunging dramatically within months. Oil fell below $60 per barrel as global demand weakened.
Looking ahead to 2026, uncertainty feels more pronounced than usual. Some expect the AI rally to continue and emerging markets to keep outperforming. Others see AI valuations entering bubble territory, with risks accumulating in private markets.
What this means for investors could be simple: active management and diversification matter. Concentration risk in US tech delivered extraordinary returns in recent years, but 2025 showed how quickly sentiment can reverse. The ability to be selective without putting all eggs in one basket might be valuable in the coming months.
We’re grateful you’ve followed Trustnet throughout the year. As we head into the festive season, we wish you a restful break and a prosperous 2026, whatever the markets bring.
Merry Christmas,
Gary
Jonny
Matteo
Emmy
Patrick