US Markets: A Year of Big Wins and Big Swings

The US stock market is on track to finish a remarkable three-year streak. The S&P 500 is up 17% this year, adding to gains of 23% in 2024 and 24% in 2023. This rare feat has only happened five times since the 1940s.

What Drove These Gains?

• Strong company earnings
• Excitement about AI
• Hopes for lower interest rates from the Federal Reserve

Despite worries about trade wars, political chaos, and even a government shutdown, stocks kept climbing.

A Bumpy Ride

The year wasn't smooth sailing:

• January: Fears about AI spending caused a market dip.
• Spring: President Trump's tariffs shook things up.
• Recovery: Markets bounced back as Trump softened his stance, and strong earnings kept stocks rising.

Tech Stocks Lead the Way

• Nasdaq: Packed with tech giants, rose 21%, making it the top performer for three straight years.
• Dow Jones: Gained 13.7%, hitting new highs.

Volatility and Bonds

• VIX (Wall Street's fear gauge): Spiked in April and June but calmed down later in the year.
• 10-year Treasury yield: Dropped from 4.57% to 4.12%, helping keep mortgage rates in check.
• 30-year yield: Ended slightly higher at 4.8%, as inflation worries lingered.

Currency and International Markets

• US dollar: Had its worst year since 2017, falling 9.5% against other major currencies.
• International stocks: Did even better than US markets.
• South Korea's Kospi: Surged 76%.
• Japan's Nikkei: Gained 26%.

Precious Metals Shine

• Gold: Soared 66%, its best year since 1979.
• Silver: Had an even bigger jump, rising 164%.
• Platinum and palladium: Also saw big gains.

Commodities Mixed

• Copper: Rose 43%, its best gain since 2009.
• Oil prices: Fell about 18%.
• Cocoa: Tumbled 48% after a huge spike last year.

Bitcoin

• Bitcoin: Started strong but ended with a loss of 6.6%, closing around $88,000.