Your Money
In the fourth quarter of 2025, global financial markets proved notably resilient. Major equity indices reached new all-time highs despite persistent inflation, a U.S. government shutdown, and a softening labor market. This broad “everything rally” produced positive returns across all major asset classes for the year. U.S. equities continued to be driven largely by optimism and capital investment in artificial intelligence, which contributed disproportionately to GDP growth and earnings, even as valuations became increasingly stretched.
International markets outperformed U.S. equities for the year, particularly emerging markets, which benefited from a weaker U.S. dollar and more attractive relative valuations. Fixed income delivered solid returns as yields remained compelling and the Federal Reserve began signaling a shift toward rate cuts, while municipal bonds offered some of the highest yields seen in decades. Commodities were led by a surge in precious metals, with gold and silver benefiting from safe-haven demand, central-bank buying, and increased industrial usage.
- Broad Market (S&P 500): +2.7% 4Q | +17.9% last 12 months
- Small Companies (Russell 2000): +2.2% 4Q | +12.8% last 12 months
- International Stocks (EAFE): +4.9% 4Q | +31.9% last 12 months
- Emerging Markets (MSCI EM): +4.8% 4Q | +34.3% last 12 months
- Bonds (Barclays Agg): +1.1% 4Q | +7.3% last 12 months
Personal video statements will begin going out this week.
Q4 2025: Markets continue to climb a wall of worry
by Francis M. Kinniry Jr., CFA
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