Feels like we blinked and it is already 2026! The equity and bond markets had a great 2025, but there is still a lot of uncertainty for what unfolds in the new year. I don’t know about you, but I feel like I need a recap of what happened in the last 12 months since my head is still spinning from the nonstop blitzkrieg of news cycle we just went through. Below is a quick monthly recap (with S&P 500 returns) for sanity’s sake:
January 2025: +2.8%
- The Trump Administration comes out of the gate with big changes on deck. While little is implemented in January, markets stir with anticipation.
- DeepSeek announces its new Artificial Intelligence R1 which seems to accomplish ChatGPT AI with much less investment and power. Some call it a “Sputnik Moment”, but it ultimately fizzles.
February 2025: -1.3%
- DOGE is up and running, threatening to decrease government spending.
- Trump increases tariffs on China and threatens tariffs on Mexico and Canada, sparking concerns of a trade war.
March 2025: -5.6%
- Trump announces 25% tariffs on Mexico and Canada. Markets struggle to interpret the new regime.
- International stocks rally in the face of U.S. Equity declines. The dollar drops significantly.
- Market analysts become concerned of a possible U.S. recession.
April 2025: – 0.7%
- Liberation Day starts the month with wide sweeping tariffs across the globe. The market is confused by the implementation and the way the tariffs were calculated.
- Trump puts a 90 day pause on April 9th after a severe market sell off. The markets make a V shaped bottom as they question Trump’s willingness to endure a significant equity market decline to accomplish his policies.
May 2025: +6.3%
- 50% EU tariff keeps trade concerns in the front of mind, but the market has dismissed Trump’s conviction to see real market pain.
- The Magnificent 7 report blockbuster earnings, shifting the focus away from policy and back to the fundamentals and Artificial Intelligence.
June 2025: +5.1%
- U.S. sacks Iran, causing a 25% spike in oil prices. The military operation is a strategic win.
- Trump starts publicly feuding with FOMC Chair Jerome Powell, putting pressure on the FOMC to lower rates.
July 2025: +2.3%
- The Big Beautiful Bill is passed, extending tax cuts from 2018 and providing new tax write offs for corporate capital expenditures.
August 2025: +2.0%
- There were some crazy headlines in August, but the biggest news of the month was the Federal Reserve signaling a rate cut in September. This was on the heals of a weak jobs report.
- Nvidia reports blockbuster numbers, helping the AI trade continue its optimism.
September 2025: +3.7%
- Federal Reserve cuts rates by 25 basis points and signals future cuts.
- Market rally broadens to other sectors beyond technology as market participants start to buy up names that might benefit from AI that are not tech related.
October 2025: +2.3%
- Government shutdown stops economic data. The market looked right past the “black out” and took no news as good news.
- Federal Reserve cuts interest rates another 25 basis points to below 4%.
- Technology earnings continue to surprise to the upside, along with corporate capital expenditures for Artificial Intelligence infrastructure.
November 2025: +0.3%
- Government shutdown ends, and government “Data Dump” shows inflation as cooling and jobs market remains weak. Ultimately, market sees it as not disrupting the Federal Reserve in its rate cut cycle.
- Black Friday sales boom, and consumers show that Christmas will be a big spending season.
December 2025: 0.1%
- Federal Reserve cuts rates again, but the FOMC committee is split on the decision, causing the market to question future cuts.
- Federal Reserve raised its 2026 GDP forecast to 2.3% from 1.8%.
A year like 2025 makes it clear how quickly market narratives can shift. In our January 2026 Market Update, we’ll step back from the monthly noise to focus on the bigger picture and how investors can stay grounded as the year unfolds.