Market Recap & Snapshot[1]
Global stocks in 2025 posted their strongest year since 2019, supported by stronger earnings and optimism surrounding AI.
The MSCI Asia index, up 30% in dollar terms for 2025, enjoyed its best annual gain in eight years. South Korea’s KOSPI was the best-performing major equity benchmark on Earth, sporting a 76% gain driven by chip heavyweights Samsung Electronics and SK Hynix, K-beauty stocks, as well as defense and nuclear firms.
Spain’s benchmark Ibex 35 Index was up close to 50% in 2025, beating all other major European markets. Strong corporate earnings, low unemployment and inflation, and relatively few effects felt from US tariffs boosted the Iberian nation’s stocks to their best performance since the 1990s.
The chart below provides performance data for a smattering of the world’s leading equity indexes.
US stocks may have lagged global equities in 2025—mostly attributable to a falling dollar—but the S&P 500 has had one heck of a run over the last three-plus years. Including dividends, the index has doubled (up 100%) from its October 2022 low through the end of 2025.
While gold has garnered much of the attention in the precious metals space lately, the crown for 2025’s top financial asset was cast in silver. The white metal broke through $80/ounce for the first time ever early in the week before pulling back after a blistering rally. Silver is viewed as possessing a greater variety of industrial uses than does gold. Perceived future demand resulting from data center construction and electric vehicle production has attracted speculators.
Both gold and silver had their best annual performances since 1979. At the opposite end of the commodities spectrum, crude oil had its worst year since 2020, which helped to abate some of the stubborn inflationary pressure that has persisted since the pandemic. An ounce of silver now costs more than a barrel of oil—for only the second time in recorded history. DataTrek Research says that the only other occurrence of this anomaly was in January 1980, during the famous attempt by the Hunt brothers to corner the silver market sent the metal spiking to $50 an ounce (the stunt that gifted us the film Trading Places).[2]
The ICE US Dollar Index—a widely used measure of the value of the greenback relative to a basket of major foreign currencies—experienced its worst year since 2017, falling 9.4%. All of the damage and thensome came in the first half of the year, on the heels of the Trump administration’s unveiling of its drastic trade policies. The dollar slid almost 7% between April 2’s “Liberation Day” speech and July 1.
For the week ending January 2, the S&P 500 fell 1.0%.
Geopolitics
President Trump met with Ukrainian President Volodymyr Zelensky met in Mar-a-Lago on December 28. Both leaders touted “progress” on peace talks but admitted that much still needs to be ironed out before a deal is reached. The main sticking point at this juncture remains the uncertain future of the industrial Donbas region in Ukraine’s east, which Russia has partially controlled since early in the war. Ukraine has been steadfast in its reluctance to cede any territory to the Russians in exchange for peace. Zelensky is also pushing for a lengthy 30- to 50-year security guarantee to deter future Russian invasions if and when a peace agreement is reached. European Union, though not NATO, membership is also on the table.
Russian President Vladimir Putin claimed that Ukraine targeted one of his residences in an assassination attempt via drone strike. Ukraine labeled the accusation as “fabricated.” President Trump appeared to side with Putin and said he was “very angry” about the perhaps brazen attack.
China’s military held major exercises in the waters and airspace surrounding Taiwan following the United States’ $11 billion arms sale to the island nation in mid-December. On the second day of drills, the People’s Liberation Army simulated a blockade of one of the world’s busiest shipping lanes. President Trump downplayed the belligerent activity, citing his claim that President Xi Jinping promised that China would not invade Taiwan while Trump holds office. Taiwan, of course, is home to TSMC, which manufactures roughly 90% of the world’s most advanced semiconductors, making it a linchpin for global technology and AI development.
Although he was characteristically light on details, President Trump stated that the US had successfully attacked a Venezuelan dock area in the latest episode of the pressure campaign on strongman Nicolas Maduro. “They load the boats up with drugs. So we hit all the boats,” Trump said from Mar-a-Lago. The Trump administration has yet to articulate a detailed explanation for its recent spate of actions against Venezuela, but has insinuated drug trafficking and illegal migrant flows as ostensible instigators.[3]
Protests erupted in Tehran’s Grand Bazaar and the surrounding commercial areas over the declining rial, which touched a record low of 1.42 million to the US dollar, causing central bank head Mohammad Reza Farzin to resign. Inflation hit a 40-month high of 48.6% in October and remains elevated even as the Iranian economy has been mired in a sanctions-induced recession. The rapid depreciation of the rial is exacerbating inflationary pressure, pushing up prices for staple goods.[4], [5]In response, Iran’s President Masoud Pezeshkian promised to revise plans for a tax hike to appease the disgruntled populace.
As of December 31, protests had spread to other cities. President Trump warned the Iranian government that the protesters were not to be harmed. An internally driven regime change in Persia would likely be welcomed by most of the globe.
The Fog of [Trade] War
Trade in goods between the U.S. and Mexico is on track to reach a record of nearly $900 billion this year. Today, almost 85% of Mexico’s total exports remain tariff-free under the United States-Mexico-Canada Agreement (USMCA). According to the Penn Wharton Budget Model, Mexico’s effective tariff rate is 4.7%, compared with 37.1% for China and 10% for the world. US Trade Representative Jamieson Greer said Mexico has captured about 25% of the reduction in the US trade deficit with China. Mexico’s economy is projected by its central bank to expand 0.3% in 2025—anemic but far better than the contraction of 1% that was expected at the outset of the year. The iShares MSCI Mexico ETF (EWW) returned a whopping 54% in 2025.[6]
Economic Data
The S&P Cotality Case-Shiller US National Home Price NSA Index posted a 1.4% annual gain for October, up from a 1.3% rise in the previous month. However, on a month-over-month basis, the national index fell 0.2% as 16 of 20 markets posted MoM declines, signaling broad stagnation in the housing market as elevated prices and mortgage rates suppress affordability. “Would-be buyers are facing the highest borrowing costs in decades, and that affordability squeeze has curbed demand enough to erode price momentum across most of the country,” opined Nicolas Godec of S&P Dow Jones Indices.[7]
On a more positive note, the 30-year fixed rate mortgage fell to 6.15%, closing at its lowest level of the year.
Layoffs appeared to taper as 2025 came to a close. The Department of Labor reported that initial jobless claims totaled a seasonally adjusted 199,000 for the week ended December 27, down 16,000 from the prior week’s level and below the Dow Jones consensus forecast for 220,000. It was one of just a handful of readings on the year that came in below the 200,000 mark.
President Xi Jinping stated that China is set to meet its economic growth target of “about 5%” for 2025. China’s manufacturing sector may finally be turning a corner, with factory activity marginally expanding in December after eight straight months of contraction. Economists expect further government stimulus in 2026 in an attempt to reenergize flagging domestic demand.
Central Bank Watch
The Federal Reserve released the minutes of its December meeting, which resulted in the FOMC cutting the federal funds rate by 25 basis points to a range of 3.50-3.75%. Three officials disagreed with the decision to cut rates for the third time this year—the most significant dissent since 2019. Traders see the odds of another rate cut in the first quarter as a coin toss.
The whole year is apparently up for grabs, in fact. The median forecast of the Fed’s 19 policymakers points to only one quarter-point cut in 2026. Seven officials are projecting no cut, four are expecting two quarter-point cuts, and several said it would likely be appropriate to “keep the target rate unchanged for some time.”[8] This high degree of uncertainty about the future path of interest rates, everything else held equal, typically translates into elevated capital markets volatility.
(A)simov (I)saac
MetaPlatforms agreed to acquire Singapore-based Manus for upwards of $2 billion, thus bringing autonomous agent technology into Meta’s broader AI ecosystem and highlighting the company’s ambition to go beyond smart conversation toward AI that actually does work. Manus made a splash in the tech world after previewing in March an AI agent capable of producing detailed research reports and building custom websites. The startup has garnered millions of users since that spring launch, including some who pay subscriptions to use its models for analysis, coding, and other tasks. The company announced in December that it had surpassed $100 million in annual recurring revenue.[9]
Corporate Earnings & Stocks in the News
Tesla published numbers that indicate that the carmaker is on course for its second consecutive annual decline in vehicle sales. Estimates for 2025 are for 1.6 million deliveries, down more than 8% from a year earlier. Projections for the next three years are similarly stark. Chinese rival BYD is extending its lead as the world’s largest EV seller.
Warner Bros. Discovery rejected an overture from Paramount Skydance in favor of merging with Netflix. Paramount is run by David Ellison and its bid to buy Warner Bros. is backed by the deep pockets of his father, Oracle executive chairman and the world’s second-richest man, Larry.
In Other News…
Democratic socialist Zohran Mamdani was sworn into office as mayor of New York City as New Year’s Eve revelers kissed and broke into Auld Lang Syne in Times Square to ring in 2026. His campaign promises include free childcare and bus transportation, as well as a vow to freeze rent for tenants in stabilized apartments.
The Trump administration froze federal childcare funding to the state of Minnesota after allegations of years-long fraud schemes involving the state’s social services system.
A bet against the Second Coming of Christ in 2025 cashed, returning 5.5% on Polymarket.
Legendary French actress, pop culture icon, sex symbol, and animal rights activist Brigitte Bardot passed away at the age of 91.
The Week Ahead
A slew of labor market data is set to be released, headlined by the Bureau of Labor Statistics’ December jobs report. Economists are forecasting a relatively benign 55,000 increase in nonfarm payrolls, on par with the average for the first 11 months of 2025. The unemployment rate is expected to tick down to 4.5% from 4.6%, which remains low by historical measures.
The Supreme Court could rule on the legality of tariffs imposed by the Trump administration under the auspices of the International Emergency Economic Powers Act (IEEPA) as early as next week, with Polymarket indicating roughly 2:1 odds of the tariffs being struck down. If so, it should be quite interesting to find out how exactly US Customs and Border Protection squeezes the toothpaste back into the tube.
The tech world will descend on Sin City to flaunt its latest wares at the annual Consumer Electronics Show (CES) in Vegas. AMD CEO Lisa Su will be among the keynote speakers.
Economic and Index Definitions: https://www.waldronpartners.com/economic-and-index-definitions
[1] Data obtained from YCharts unless otherwise noted
[2] La Monica, Paul. “Silver’s Up, Oil’s Down. Is This a Bubble Indiscator?” Barron’s, 2 January 2026, https://www.barrons.com/articles/silvers-up-oils-down-is-this-a-bubble-indicator-a1276331?gaa_at=eafs&gaa_n=AWEtsqdODXQjbyrjxsXXHBu57ITBUsE0DrA-gnbjYlzcb-vnsuW4MMtVqq8n04of5do%3D&gaa_ts=695f0ad8&gaa_sig=EvIpMkF5A-o4p0AyBR0XlKI0cUqZ5lHqqUPf7lC9lkuUf4NylDKf5DPMMKDcQ77YatwjApbcpnkXjFnk_dQP3w%3D%3D.
[3] Volz, et al. “Trump Says the U.S. Attacked Venezuelan Docks Where Drugs Are Loaded Onto Boats.” The Wall Street Journal, 29 December 2025, https://www.wsj.com/world/americas/venezuela-attack-trump-claims-c8b01351?mod=article_inline.
[4] “Protests erupt in Iran over currency’s plunge to record low.” AP, 29 December 2025, https://apnews.com/article/iran-traders-protest-rial-currency-ddc955739fb412b642251dee10638f03.
[5] “Iran’s central bank chief resigns, pending president’s approval, state media says.” Reuters, 29 December 2025, https://www.reuters.com/world/middle-east/irans-central-bank-chief-resigns-pending-presidents-approval-state-media-says-2025-12-29/.
[6] Perez and Harrup. “The Unexpected Winner of Rising American Tariffs Is Mexico.” The Wall Street Journal, 26 December 2025, https://www.wsj.com/economy/trade/mexico-exports-us-trump-tariffs-e891510a.
[7] S&P Dow Jones Indices. “S&P Cotality Case-Shiller Index Reports Annual Gain in October 2025.” S&P Global, 30 December 2025, https://www.spglobal.com/spdji/en/index-announcements/article/sp-cotality-case-shiller-index-reports-annual-gain-in-october-2025/.
[8] Goodkind, Nicole. “Fed Officials Signal More Cuts Could Come in 2026: Minutes.” Barron’s, 30 December 2026, https://www.barrons.com/articles/fed-minutes-rate-cuts-powell-c323417e?mod=djem_b_Feature_12312025%2065051%20AM.
[9] Au-Yeung, et al. “Meta Buys AI Startup Manus for More Than $2 Billion.” The Wall Street Journal, 30 December 2025, https://www.wsj.com/tech/ai/meta-buys-ai-startup-manus-adding-millions-of-paying-users-f1dc7ef8?mod=djem10point.