Wall Street ends 2025 near record highs after year of economic upheaval

• Nvidia led the AI boom with a 34.8% gain to reach $4.55 trillion valuation, becoming the world's most valuable company as the entire Nasdaq has surged 110% since ChatGPT's November 2022 launch
• Trump's aggressive tariff plans initially spooked markets but investors adopted a 'Trump Always Chickens Out' stance, though US tariffs have still reached their highest levels since 1935
• Despite market gains, twice as many Americans expect the economy to weaken rather than strengthen, highlighting a 'two-track economy' that leaves those without investment portfolios feeling left behind

Wall Street closed 2025 near record highs despite a year marked by economic volatility and uncertainty. The S&P 500 gained 16.4% for the year, ending at 6,845.50, though it declined 0.7% on the final trading day. The Dow Jones Industrial Average rose 13.4%, while the tech-heavy Nasdaq Composite surged 20.5%.

Technology stocks drove the market rally, fueled by continued enthusiasm around artificial intelligence. Nvidia, the leading chipmaker, exemplified this trend with a 34.8% gain for the year, reaching a $4.55 trillion valuation. The company briefly became the world's most valuable during the summer. Since OpenAI launched ChatGPT in November 2022, the Nasdaq has surged over 110%, raising concerns about a potential tech bubble.

President Trump's tariff threats initially spooked investors in spring 2025, but markets recovered as fears subsided under the "TACO" trade mentality (Trump Always Chickens Out). Despite some rollbacks, U.S. tariffs reached their highest levels since 1935.

The S&P 500 recorded its third consecutive positive year, though 2025's 16.4% gain was the weakest of the trio. Tech giants including Nvidia, Apple, Microsoft, Amazon, and Alphabet continue to dominate the index.

Internationally, London's FTSE 100 outperformed U.S. markets with a 21.5% gain, its best year since 2009. Analysts maintain relatively optimistic forecasts for 2026, expecting continued growth.

However, the rally has deepened inequality concerns, with economists noting a "two-tier economy" that disproportionately benefits wealthy investors. A Harris poll revealed twice as many Americans feel pessimistic about the economic outlook, highlighting the disconnect between market performance and broader economic sentiment.