2025 Recap: A Look at What Drove the Markets This Year

Summary:

• 2025 was a year of major shifts and records, shaped by a weaker US dollar, widespread interest-rate cuts and sharp moves across commodities, crypto and oil.
• Equity markets proved resilient, led by AI-driven US tech stocks like Nvidia and strong performances across Asia, despite trade tariffs and bouts of volatility.
• Investors navigated big contrasts, with gold and silver hitting record highs, oil sliding to multi-year lows and cryptocurrencies experiencing extreme swings.

2025 was a landmark year for markets. As we approach year-end, we take a closer look at the ten key stories that defined the year, from Trump’s tariffs and oil’s struggles to Nvidia’s milestones and record-breaking commodities.

1. A Weaker US Dollar Sets the Tone

One of the key themes of 2025 was a weaker US dollar. In the first half of the year, the dollar recorded its largest first-half decline in more than 50 years, with the Dollar Index (which measures the dollar against a basket of major currencies) falling by around 10%. The primary driver for this was shifting expectations around US interest rates, as while inflation softened, markets increasingly priced in future Federal Reserve rate cuts.

2. A Year for Interest Rate Cuts

Interest rate cuts were a theme around the globe. The Bank of England cut interest rates four times during the year, the US Federal Reserve cut rates three times, and the European Central Bank delivered two rate cuts. These moves reflected a weakening global economic backdrop, with policymakers aiming to stimulate growth, support investment, and encourage consumer spending.

3. Equity Markets Power Higher

Despite economic uncertainty, equity markets delivered a strong year. US markets reached all-time highs and are up around 16% year-to-date. Much of this performance was driven by AI-linked stocks and large technology companies, with the “Magnificent 7” increasing their dominance of the market. Elsewhere, UK and European markets also performed well, posting double-digit gains and reinforcing the global strength of equities in 2025.

4. Nvidia’s Historic Year

Among individual stocks, Nvidia once again stole the spotlight. In July, it became the first company in history to reach a US$4 trillion market capitalisation, before breaking another milestone in October by becoming the first to hit US$5 trillion. For context, Apple took over two years to move from a US$3 trillion to a US$4 trillion valuation, which it achieved in October this year. Nvidia remains central to the AI boom, driving rapid innovation in high-performance GPUs and the infrastructure underpinning artificial intelligence.

5. Asia Outperforms

Asian markets were standout performers in 2025. Japanese equities outperformed most major global markets, while Chinese markets also delivered strong gains. South Korea was among the best-performing markets worldwide, rising nearly 70% year-to-date, highlighting the region’s growing influence and resilience.

6. Gold Shines

Gold also had an exceptional year, as investors sought protection from geopolitical and macroeconomic uncertainty. Prices surged above US$4,300 per ounce, reaching a new all-time high in October. Year-to-date, gold is up around 55%, supported by ongoing tensions in the Middle East, the Russia-Ukraine conflict, global trade frictions, and broader economic instability.

7. Silver Breaks Long-Standing Records

Silver, though less prominent in headlines, quietly delivered an even stronger performance. In December 2025, it surpassed US$65 per ounce for the first time in history, breaking records last set in the early 1980s, and is up roughly 125% year-to-date. Unlike gold, it serves both as a precious metal and an industrial input, with around half of global demand coming from industrial uses. This makes silver particularly sensitive to global capital expenditure and energy-transition investment.

8. Trade Tariffs

The year was not without its shocks. In April, President Trump’s major tariff rollout, which he termed as “Liberation Day”, triggered a sharp market sell-off. US equities fell nearly 5% in a single day and around 10% over the following days. This wiped out roughly US$5 trillion in market value, marking the largest two-day loss on record for the US stock market. While further tariff announcements also weighed on markets, investors gradually became more accustomed to the volatility as the year progressed.

9. Crypto’s Volatility

Cryptocurrencies experienced significant volatility, particularly toward the end of the year. Bitcoin reached a new all-time high of around $125,000 in October, before slumping to just over $80,000 in December as risk aversion increased. In November alone, Bitcoin shed more than $18,000, as record outflows hit the market – its largest dollar loss since May 2021.

10. Oil Prices Slide to Multi-Year Lows

2025 proved to be a challenging year for oil markets. Oil prices fell by around 20%, reaching their lowest level in nearly five years. The decline was driven by oversupply concerns, alongside early signs of weakening demand from major consumers, including China and the United States.

As 2025 comes to a close, the year leaves a mix of record-breaking achievements and dramatic shifts. Nvidia reached unprecedented valuations, Asian markets surged, and precious metals like gold and silver hit historic highs. At the same time, oil prices slid, Trump’s tariffs shook markets, and cryptocurrencies swung wildly. With a weaker dollar and widespread interest rate cuts shaping the backdrop, 2025 was a year where innovation, policy, and volatility all collided, yet markets showed remarkable resilience throughout.

The Noise

• Global markets had a mixed week. In the UK, markets rose slightly, supported by an improvement in consumer confidence in December, indicating that households felt a bit more optimistic after the Autumn Budget. However, this was partly offset by weaker retail activity, as UK retail sales unexpectedly fell in November, alongside a rise in the unemployment rate from 5% to 5.1%. US markets remained relatively flat, with the main highlight being that annual inflation eased to 2.7% in November which is the lowest level since July and below market expectations of 3.1%.
• In commodities, oil had another poor week, falling to its lowest level in nearly five years, driven by expectations of over-supply. Gold remained relatively flat, while silver hovered near record highs and is on track for a fourth consecutive weekly gain. Investor demand for silver and other precious metals has surged this year, driven by falling interest rates and broader economic uncertainty, as investors seek safe haven assets.
• In currencies, the US dollar index, which tracks its value against a basket of global currencies, remained flat, while the British pound strengthened to US$1.34, approaching two-month highs as markets digested the latest Bank of England decision. The central bank cut interest rates by 0.25% to 3.75% following a larger-than-expected fall in inflation from 3.6% to 3.2% in November. Meanwhile, the Euro saw minor losses after the European Central Bank left interest rates unchanged, a widely expected move that offered little new direction for markets.