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2025 Stock Market Recap

A look back at the major market events and strong returns that defined 2025, along with the opportunities and risks investors may face in 2026. We also consider what history can—and can’t—tell us after three consecutive years of double-digit market gains.

2025 was a year for the record books: The U.S. stock market achieved something remarkable: three consecutive years of double-digit gains, a feat that’s only happened a few times in the past.²In this 2025 stock market recap, we review the year’s major returns and events and consider what investors could face in 2026.

This happened despite a wild ride: markets tumbled in the spring when sweeping tariffs were announced, recovered after the administration walked back the most severe proposals, survived a government shutdown, and shrugged off ongoing concerns about AI valuations.²

Here are the final returns for 2025 from the 3 major indexes:

2025 proved again why staying invested through turbulent markets is usually a wise decision for long-term investors. This was not a placid year by any means, but markets finished the year very strong despite all of the volatility in March and April.

Check out the chart below to see milestones and events that impacted the markets in 2025. This chart shows how quickly sentiment shifted throughout the year and how markets ultimately recovered.

After three years of exceptional returns, it’s natural to ask: What happens next?

What does history tell us about year four? Not much. This kind of streak has only happened six times since the 1940s.⁵

Maybe the rally will continue for another year or two (like it did in the late 1990s). Maybe it won’t.

As we know, the past doesn’t predict the future.

There are reasons for optimism as well as restraint in 2026. Here are 4 areas that will likely shape the market as 2026 unfolds.

Corporate earnings remained strong throughout 2025, the Fed cut rates, and AI continues to drive innovation. Many Wall Street analysts expect another positive year, but we know that market predictions aren’t worth much.⁶

There are also challenges to navigate.

After such strong gains, stocks are trading at elevated valuations, and some analysts worry about a bubble.⁶ The labor market may be weakening, inflation remains sticky, and tariff uncertainties linger. With clouds on the horizon, reversals can happen quickly, so we should be prepared for another bumpy year ahead.

We’re watching the data, staying balanced, and positioning portfolios for a potentially choppier 2026.

Questions about your portfolio heading into the new year? Let’s talk.

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