Stocks ended 2025 with a fourth straight day of losses, trimming gains but still closing out a strong year. The S&P 500 rose about 16% for 2025, led by AI-driven optimism and resilient economic growth. The Nasdaq and Dow posted even stronger annual returns despite recent pullbacks. Wednesday’s session saw light volumes as traders locked in profits and repositioned portfolios ahead of 2026. Bonds, metals, and oil also slipped on the day, capping off a volatile but largely constructive year for diversified portfolios.
Key Headlines & Market Movers:
AI Stocks Drove 2025’s Gains Despite Year-End Cooldown: The market’s 2025 rally was powered by names linked to artificial intelligence. Chipmakers and tech firms such as Micron (+239%), Palantir (+135%), AMD (+77%), Alphabet (+65%), and Nvidia (+39%) led gains. However, Micron was among Wednesday's laggards, down 2.5%. The broader pullback this week follows strong positioning through late November and early December, with some funds rebalancing before year-end.
Precious Metals Volatile Into Year-End: Gold and silver ended their strongest year since the 1970s with steep losses Wednesday. Silver futures dropped over 9% after CME Group raised margin requirements again amid heightened volatility. Despite this week's moves, metals were among 2025’s best-performing assets, helped by investor demand for hedges against geopolitical and policy risks.
Bonds Deliver Strong Annual Returns Despite Yield Bump: US Treasuries wrapped up their best year since 2020, despite yields rising slightly into year-end. The 10-year finished at 4.17%, up five basis points on the day. Investors rotated back into fixed income as inflation moderated and the Fed pivoted toward rate cuts, though fewer cuts materialized than originally expected.
Economic Data Shows Labor Market Still Solid: Jobless claims fell to 199,000 last week, well below estimates, reinforcing the narrative of a still-resilient labor market. This adds complexity to the Fed’s rate path in early 2026, as policymakers weigh strong jobs data against softening inflation and global uncertainty.
S&P 500 Sector Performance
Looking Ahead
2026 begins with cautious optimism but subdued expectations. Historically, the S&P 500 tends to dip on the first trading day of the year, and after three years of gains, some volatility may reemerge. While the bull market still has momentum, especially in tech and AI, investors will be watching closely for signs of economic slowing, Fed policy signals, and geopolitical developments. Mid-single digit equity returns and renewed volatility are the base case heading into the new year.
The Investment Management Group at Duncan Williams Asset Management is led by a team with extensive experience in investment management, financial planning, and client service. President David Scully, CFA®, CFP®, has more than 20 years of experience and is active in Memphis civic organizations. Chief Investment Officer Kyle Gowen, CFA®, CFP®, oversees investment strategy and is engaged with the local community. Investment Analyst Jack Eason, CFA®, provides research and supports charitable initiatives. The IMG team is committed to professional standards, client service, and community involvement. No statement is intended as an offer of investment advice or a guarantee of future results.
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