Post by : Saif Rahman

The year 2025 will stand out in history as an astonishing period for global financial markets. With Donald Trump back in the U.S. presidency, investors braced for change, yet the scope of the market's behavior was remarkable and unforeseen. Nearly every main asset category exhibited erratic movements that defied expectations.

Stock markets globally had a successful year, with world stocks increasing by approximately 21%, adding nearly $15 trillion in overall market capitalization. This constituted another year of significant growth, even in the face of a brief downturn in April due to new trade tariffs. The swift recovery highlighted investor confidence in risk, amid a landscape of political and economic ambiguity.

Gold seized the spotlight as the standout performer of the year. Traditionally viewed as a safe haven, gold prices soared by nearly 70%, marking the most significant yearly increase since the 1979 oil crisis. Investors flocked to gold amid rising concerns about trade tensions, escalating global debt, and ongoing geopolitical disputes. Additionally, silver and platinum experienced sharp rises, underlining the immense pursuit of security in uncertain times.

Conversely, the U.S. dollar diminished in value, plummeting nearly 10% during the year—its weakest showing in recent history. This decline allowed various currencies to appreciate, with the euro and Swiss franc each rising approximately 14%. Several emerging market currencies also enjoyed their most robust performance in over ten years. Analysts suggest this could indicate an end to a prolonged struggle for emerging market currencies against the dollar.

Moreover, the bond markets revealed unexpected outcomes. U.S. Treasury bonds posted minor gains despite long-term yields reaching their highest levels since 2007 earlier in the year. Conversely, emerging market bonds achieved remarkable results, seeing their best performance since 2009, regardless of rising governmental and corporate debt apprehensions.

Technology stocks, which had previously dominated the markets, began to show signs of fatigue. Following Nvidia’s brief emergence as the world’s largest company, enthusiasm for major tech firms started to wane. Oil prices dropped nearly 17% through 2025, reflecting a decrease in demand and evolving energy trends. Bitcoin illustrated its volatility, sharply declining after peaking in October and finishing the year lower.

Political dynamics heavily influenced market movements. Trump’s trade policies, criticisms of the U.S. Federal Reserve, and expansive spending plans markedly shaped investor sentiment. In Europe, defense and banking stocks surged in anticipation of increased military expenditures. Political events and elections in emerging markets triggered volatile swings, particularly in nations like Argentina.

As the financial landscape moves towards 2026, considerable uncertainty looms. Investors are closely monitoring global elections, tensions in Ukraine and the Middle East, China's economic revival, and the future direction of spending on artificial intelligence. Experts caution that while markets remain powerful, indicators of strain, such as rising bond yields and downturns in cryptocurrency prices, are surfacing.

In summary, 2025 was anything but a tranquil year for financial markets. It was characterized by significant fluctuations, unexpected successes, and clear indications that the global financial landscape is entering a new phase fraught with uncertainty.

#Business News #Market #Gold