2025 has felt like the year of two economies, with affordability becoming a buzzword at the same time that AI continued driving the stock market onward and upward. It was a volatile year, to say the least. But amidst the high highs and the low lows, the market proved itself to be more resilient than many thought possible. Here are our takeaways from the biggest themes of 2025.

Turning the Volume Down on Tariffs

Starting with the Liberation Day announcement in April, trade uncertainty peaked this year. The markets reacted in kind, with their biggest single-day drop since the coronavirus pandemic. Tariffs reaching their highest levels in nearly a century took investors by surprise, and if there’s one thing markets don’t like, it’s surprises. Once the shock wore off, however, the market experienced one of its fastest rebounds in history.

Over the subsequent months, investors were able to see the impacts of trade policies play out. The results weren’t as bad as they anticipated. Aside from a handful of reactionary blips since, markets have become rather immune to the daily ups and downs of trade news.

Following the Money

Perhaps where domestic policy shows up in the markets is in the value of the dollar, which has dropped this year as money moved out of U.S. assets and into European and emerging markets. More money has also flowed into money markets this year, with the asset classholding over $8 trillion in the U.S. as of early December, setting a new record.

ETF inflows also hit an all-time record for the year as of November with inflows surpassing $1.14 trillion. Part of the rapid and sustained growth is explained by the continued net outflows of capital from mutual funds as investors shift toward more liquid and tax efficient options.

At the same time, gold has also reached an all-time high this year, a move that usually signals insecurity in the market. Who else is feeling insecure? The consumer. Inflation increased and the job market weakened in 2025, but neither appear to be impacting markets.

But AI, Though

Despite all the economic turmoil of 2025, the market has recently reached new all-time highs. It hasn’t just recovered from Liberation Day, it has thrived. When investors take all the political and economic noise into consideration, the ultimate question they’re asking themselves right now is if they think top tech companies like Nvidia and Apple and Meta will be making a lot of money two or five or 10 years from now. They’re probably going to do alright for themselves and that’s what’s driving the market. AI is, after all, today’s (and tomorrow’s) tailwind.

The main sectors driving and outpacing the market this year have been “Communication Services” and “Technology”(as well as the “Basic Materials” sector, which includes gold)*. Those two sectors include the Magnificent 7 as well as other AI category killers like Broadcom, Intel, AMD, ZScaler, Crowdstrike, Cloudflare, Palantir, and Oracle, all of which are having banner years.

So even though other economic indicators might spell trouble, AI is driving full-steam ahead as the world’s top companies race for dominance. Only seven companies account for a third of the weight of the S&P 500. If one tech giant has a good day, the entire index experiences an outsize lift despite pains that may be lurking in other sectors below the surface. Their growth in recent years has been astronomical, making it hard for investors to sit out what could be a once-in-a-generation tech boom — economic data and political policies be damned.

* Data as of Dec 5, 2025.

1. https://www.jpmorgan.com/insights/markets-and-economy/top-market-takeaways/tmt-in-the-rear-view-how-didour-2025-themes-pan-out (https://www.jpmorgan.com/insights/markets-and-economy/top-markettakeaways/tmt-in-the-rear-view-how-did-our-2025-themes-pan-out)

2. https://www.nytimes.com/live/2025/04/04/business/trump-tariffs-stocks-economy(https://www.nytimes.com/live/2025/04/04/business/trump-tariffs-stocks-economy)

3. https://www.nytimes.com/2025/10/20/podcasts/the-daily/stock-market-tariff-trump.html(https://www.nytimes.com/2025/10/20/podcasts/the-daily/stock-market-tariff-trump.html)

4. https://economictimes.indiatimes.com/news/international/us/record-8-trillion-in-us-money-market-funds-whyinvestors-keep-pouring-in-amid-fed-rate-cuts/articleshow/125727195.cms?from=mdr(https://economictimes.indiatimes.com/news/international/us/record-8-trillion-in-us-money-market-funds-whyinvestors-keep-pouring-in-amid-fed-rate-cuts/articleshow/125727195.cms?from=mdr)

5. https://www.reuters.com/markets/wealth/flows-into-us-etfs-cross-1-trillion-record-pace-state-street-investment2025-10-14/ (https://www.reuters.com/markets/wealth/flows-into-us-etfs-cross-1-trillion-record-pace-state-streetinvestment-2025-10-14/)6. https://finance.yahoo.com/sectors (https://finance.yahoo.com/sectors)