Business
US stock market ends 2025 on a high note after volatile year
Danielle KayeBusiness reporter
Michael Nagle/Bloomberg via Getty ImagesIt’s been a roller-coaster year for financial markets – but US stock investors are heading into 2026 on a high note.
US President Donald Trump’s global trade tariffs sent shockwaves through markets in the spring. But by summer, the US saw record highs fuelled by strong company profits and confidence in artificial intelligence investments.
The S&P 500 index is on track to end the year up about 17%, the third consecutive year of double-digit gains.
Next year could shape up to be yet another big one for stock investors, analysts say. Still, with leadership changes at the US central bank and mounting concerns that AI stocks are overvalued, the path ahead might be bumpy.
The technology-heavy Nasdaq Composite index is poised for a 21% gain this year, while the Russell 2000 index of smaller companies is roughly 12% higher year-to-date.
In early April, when Trump announced sweeping tariffs on US trading partners, the S&P 500 fell to the brink of bear market territory – Wall Street’s term for a drop of 20% from the latest high. Both the Nasdaq Composite and Russell 2000 indexes did briefly tumble into bear markets.
But major indexes quickly bounced back after Trump walked back his steepest tariffs, easing Wall Street’s fears about a tariff-driven economic slowdown.
Stocks have since surged to new highs.
That’s been in spite of persistent jitters about the economy, Robert Edwards, chief investment officer at Edwards Asset Management, said in a note.
“The market continues to climb the wall of worry into next year,” he said.
He added that 2026 “should be another year of record setting for stocks”, pointing in part to expectations for lower borrowing costs, which could boost corporate earnings and drive stock prices higher.
Strong earnings growth in corporate America has been a key driver of the stock market rally since the tariff-driven whiplash in the spring, said Parag Thatte, an equity strategist at Deutsche Bank.
At the same time, geopolitical tensions, Trump’s tariffs and expectations of interest rate cuts added to investor demand this year for safe haven assets, such as gold and other commodities. The price of gold is on track for a nearly 70% yearly increase.
Bitcoin, on the other hand, has struggled to keep up with strong returns across stocks and gold.
Despite getting a boost earlier in the year from the Trump administration’s support for digital assets, the world’s largest cryptocurrency is poised to end 2025 slightly lower, after a sharp decline from its record highs in October.
ReutersBroadening beyond tech
Enthusiasm among investors about massive AI spending has helped several tech firms outperform the broader S&P 500.
The top five companies – Nvidia, Apple, Microsoft, Amazon and Alphabet – make up almost 30% of the overall index.
But in recent months, fears have mounted in Silicon Valley and beyond of an AI bubble bursting, as the values of tech companies linked to AI have soared and companies keep spending big on the burgeoning industry.
Analysts note that corporate earnings growth appears to be broadening out beyond the tech sector. That could offer investors a cushion, as tech company valuations remain under intense scrutiny.
Mr Thatte, with Deutsche Bank, said growth picked up for average-sized companies in the third quarter of 2025, not just for tech giants. He called this a “key development”.
But even with increasingly broad gains across the US stock market, whether the S&P 500 can maintain its momentum if the tech sector’s rally were to slow remains to be seen.
“The rotation is already happening,” Mr Thatte said, referring to investors pivoting away from Big Tech stocks. “It might be noisy along the way.”
There are also ongoing concerns among professional investors that some stocks outside of tech are overvalued, too.
Analysts at Vanguard predict annualized returns of about 3.5% to 5.5% for US stocks over the next decade – a relatively subdued outlook, compared to recent gains.
JOHN G MABANGLO/EPA/ShutterstockPolicy risk is ‘not subsiding’
In 2025, the US economy “probably held up better than most people had expected,” said David Sekera, chief US market strategist at Morningstar.
The world’s largest economy picked up speed over the three months to September, expanding at an annual rate of 4.3%, up from 3.8% in the previous quarter – the strongest growth in two years.
But that’s not to say there aren’t big economic question marks in the months ahead.
There’s still the possibility that Trump tariff policies could prompt another jolt to markets. Negotations between Washington and major trading partners will be “an ongoing headline”, Mr Sekera said.
The US labour market has also shown signs of weakness. The unemployment rate rose to a four-year high of 4.6% in November, up from 4.4% in September, according to Labor Department figures.
“With policy risk not subsiding anytime soon,” analysts at Charles Schwab wrote in a research note, “the bar for a pullback or mini correction in the beginning of 2026 is not terribly high.”
Trump is also expected to name a new Federal Reserve chair in the coming weeks, to succeed Jerome Powell after his term ends in May.
The decision is “the big uncertainty” for investors heading into 2026, Paul Stanley, chief investment officer at Granite Bay Wealth Management, said in a note.
Trump, who has been pressuring Powell to lower interest rates, has said he will pick a Fed chair who he views as committed to easing borrowing costs.
Wall Street investors will be focused on understanding how the change in leadership will impact monetary policy moving forward.
“Fed chair transitions come with volatility,” Mr Stanley said.
That leaves investors facing down plenty of unpredictability, even as analysts anticipate another strong year ahead.
One of Britain’s most prolific rail fare dodgers could face jail after admitting dozens of travel offences.
Charles Brohiri, 29, pleaded guilty to travelling without buying a ticket a total of 112 times over a two-year period, Westminster Magistrates’ Court heard.
He could be ordered to pay more than £18,000 in unpaid fares and legal costs, the court was told.
He will be sentenced next month.
District Judge Nina Tempia warned Brohiri “could face a custodial sentence because of the number of offences he has committed”.
He pleaded guilty to 76 offences on Thursday.
It came after he was convicted in his absence of 36 charges at a previous hearing.
During Thursday’s hearing, Judge Tempia dismissed a bid by Brohiri’s lawyers to have the 36 convictions overturned.
They had argued the prosecutions were unlawful because they had not been brought by a qualified legal professional.
But Judge Tempia rejected the argument, saying there had been “no abuse of this court’s process”.
JSW Jetour T2 Launch: JSW Motors Limited, the passenger vehicle arm of the JSW Group, is reportedly preparing to enter the Indian car market this year. It has partnered with Jetour, a China-based automotive brand owned by Chery Automobile, and the Jetour T2 SUV could be the company’s first product, according to the reports.
Media reports suggest that the launch will happen independently and not under the JSW MG Motor India joint venture. The SUV will wear a JSW badge and name, instead of the Jetour branding. The upcoming SUV will be assembled at JSW’s upcoming greenfield manufacturing facility in Chhatrapati Sambhaji Nagar, Maharashtra.
According to the reports, the company plans to have the vehicle on sale by the third quarter of this year. With this move, JSW aims to establish itself as a standalone carmaker in India.
Expected Powertrain
The SUV is likely to arrive with a 1.5-litre plug-in hybrid setup. Internationally, this hybrid powertrain is offered with both front-wheel drive and all-wheel drive options. It is still unclear which version will be introduced in India.
Design
In terms of design, the T2 is a large and rugged-looking SUV. It has a boxy and upright stance, similar to vehicles like the Land Rover Defender. Despite its tough appearance, it uses a monocoque chassis instead of a ladder-frame construction.
Size
The SUV measures around 4.7 metres in length and nearly 2 metres in width. This makes it larger than the Tata Safari, even though it is a five-seater. A longer 7-seat version is also sold in some markets.
Price
Pricing details for India are yet to be announced. For reference, the front-wheel-drive five-seat T2 i-DM is priced at AED 1,44,000 (around Rs 35 lakh) in the UAE.
Jetour
Jetour is a brand owned by Chinese automaker Chery. Launched in 2018, it focuses mainly on SUVs and is present in markets across China, the Middle East, Africa, Southeast Asia and Latin America.
John Swinney has been pressed over whether this week’s Scottish Budget gives some workers the “smallest tax cut in history” – with Tory leader Russell Findlay branding the reduction “miserly” and “insulting”.
The Scottish Conservative leader challenged the First Minister after Tuesday’s Holyrood Budget effectively cut taxes for lower earners, by increasing the threshold for the basic and intermediate bands of income tax.
But Mr Findlay said that would leave workers at most £31.75 a year better off – saying this amounts to a saving of just £61p a week
“That wouldn’t even buy you a bag of peanuts,” the Scottish Tory leader said.
“John Swinney’s Budget might even have broken a world record, because a Scottish Government tax adviser says it ‘maybe the smallest tax cut in history’.”
Raising the “miserly cut” at First Minister’s Questions in the Scottish Parliament, Mr Findlay demanded to know if the SNP leader believed his “insulting tax cut will actually help Scotland’s struggling households”.
The attack came as the Tory accused the SNP government of increasing taxes on higher earners, with its freeze on higher income tax thresholds, which will pull more Scots into these brackets.
This is needed to pay for the “SNP’s out of control, unaffordable benefits bill”, the Conservative added.
Mr Findlay said: “The Scottish Conservatives will not back and cannot back a Budget that does nothing to help Scotland’s workers and businesses.
“It hammers people with higher taxes to fund a bloated benefits system.”
Hitting out at Labour – whose leader Anas Sarwar has already declared they will not block the government’s Budget – Mr Findlay said: “It is absolutely mind-blowing that Labour and other so-called opposition parties will let this SNP boorach of a budget pass.
“Don’t the people of Scotland deserve lower taxes, fairer benefits and a government focused on economic growth?”
Mr Swinney said the Budget “delivers on the priorities of the people of Scotland” by “strengthening our National Health Service and supporting people and businesses with the challenges of the cost of living”.
He insisted income tax decisions in the Budget would mean that in 2026-27 “55% of Scottish taxpayers are now expected to pay less income tax than if they lived in England”.
The First Minister went on to say that showed “the people of Scotland have a Government that is on their side”.
Referring to polls putting his party on course to win the Holyrood elections in May, the SNP leader added that “all the current indications show the people of Scotland want to have this Government here for the long term”.
Benefits funding is “keeping children out of poverty”, he told MSPs, adding the Budget contained a “range of measures” that would build on existing support.
The First Minister said: “What that is a demonstration of is a Government that is on the side of the people of Scotland and I am proud of the measures we set out in the Budget on Tuesday.”
Meanwhile he said the Tories wanted to make tax cuts that would cost £1 billion, with “not a scrap of detail about how that would be delivered”.
With the weekly leaders’ question time clash coming less than 48 hours after the draft 2026-27 Budget was unveiled, the First Minister also faced questions from Scottish Labour’s Anas Sarwar, who insisted that the proposals “lacks ambition for Scotland”.
Pressing his SNP rival, the Scottish Labour leader said: “While he brags about his £6 a year tax cut for the lowest paid, one million Scots including nurses, teachers and police officers face being forced to pay more.
“Even his own tax adviser says this is a political stunt. So why does John Swinney believe that someone earning £33,500 has the broadest shoulders and therefore should pay more tax in Scotland?”
Mr Swinney, however, said that many public sector workers would be better off in Scotland.
He told the Scottish Labour leader: “A band six nurse at the bottom of the scale will take home an additional £1,994 after tax compared to the same band in England.
“A qualified teacher at the bottom of the band will take home £6,365 more after tax in Scotland than the equivalent in England. There are the facts for Mr Sarwar.”
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