（Singapore, 01.01.2026）Global financial markets ended the final trading day of 2025 on a weaker note, with stocks, bonds and precious metals all slipping, even as investors wrapped up another year of solid overall gains. The late-year pullback did little to erase what has been a strong three-year run for equities, powered largely by optimism around artificial intelligence and a more supportive interest-rate environment.
In the United States, major stock indexes fell for a fourth straight session following the Christmas holiday. The S&P 500 trimmed its gains for the year to about 16%, while the Nasdaq 100 dropped 0.8% on Wednesday. Despite the late weakness, both indexes still recorded double-digit gains for the third consecutive year, marking their longest winning streak since 2021.
Market participants said the year-end slowdown reflected profit-taking and caution rather than any sudden shift in fundamentals. Throughout 2025, investors navigated a wide range of challenges, including volatile geopolitics, shifting trade policies, stubborn inflation pressures and uncertainty over the pace of central bank rate cuts.
Even so, the resilience of the US economy stood out.
“Calling 2025 resilient might actually understate it,” said Adam Turnquist, chief technical strategist at LPL Financial. He noted that growth held up despite higher inflation, a cooling labor market, fewer interest-rate cuts than originally hoped for, and rising tariffs. Importantly, the economy avoided a recession even as financial conditions tightened at times.
According to a Bloomberg report, precious metals also ended the year lower, with gold and silver slipping on the final trading day after delivering their strongest annual performance since the 1970s. Recent volatility prompted CME Group to raise margin requirements on precious-metal futures for the second time in a week, increasing trading costs for investors.
In the bond market, US Treasuries recorded their best annual returns since 2020, supported by easing inflation concerns and expectations that interest rates have peaked. However, prices edged lower on Wednesday, pushing the benchmark 10-year Treasury yield up to 4.17%.
Economic data released late in the year showed continued strength in the US labor market. Weekly jobless claims fell to one of the lowest levels seen in 2025, with initial applications dropping to 199,000 in the week ended December 27, well below economists’ expectations. The data had little immediate impact on markets, as investors remained focused on the outlook for 2026.
The US dollar was mostly unchanged on the day but finished 2025 with its weakest annual performance since 2017. Analysts said the greenback could face further pressure if the next Federal Reserve chair opts for deeper interest-rate cuts than markets currently anticipate.
Oil Slides as Oversupply Concerns Dominate
Oil prices followed a very different path, falling again on the final day of the year and sealing their steepest annual decline since 2020. Brent crude dropped nearly 19% in 2025, while US West Texas Intermediate crude fell almost 20%. Brent settled at US$60.85 a barrel, while WTI closed at US$57.42.
The losses came despite a year marked by wars, sanctions and shipping disruptions. Instead, expectations of oversupply weighed heavily on prices. Rising output from the United States and OPEC+ producers pressured the market, with US oil production hitting a record high in October. OPEC+ has released about 2.9 million barrels per day into the market since April.
BNP Paribas analyst Jason Ying expects Brent crude to dip to around US$55 a barrel in the first quarter of 2026 before stabilising near US$60 later in the year. He noted that US shale producers have been able to hedge production at higher prices, making supply less sensitive to market swings.
Recent US inventory data showed mixed signals. While crude stockpiles declined more than expected, gasoline and distillate inventories rose sharply, pointing to softer demand after the holiday season.
“It will probably be a rough January and February,” said John Kilduff of Again Capital Markets, citing seasonal demand weakness.
As markets turn the page to 2026, analysts are urging caution. Historically, the first trading day of the year has delivered mixed results. Since 1953, the S&P 500 has recorded a median decline of 0.3% on the first trading day, and stocks have opened lower in each of the past three years.
For oil, most forecasters expect supply to exceed demand in 2026, though geopolitical risks remain a key wildcard. OPEC+ has paused further output increases for the first quarter, with its next meeting scheduled for January 4.
According to Reuters, despite market fundamentals suggesting ongoing pressure, analysts warn that political and geopolitical factors could still sway prices.
“Everybody’s saying it will get weaker into 2026,” said John Driscoll of JTD Energy. “But geopolitics still matter, and the Trump factor is going to be in play.”
After a turbulent but ultimately rewarding year, investors head into 2026 facing familiar questions — whether growth can hold up, inflation will stay contained, and volatility will once again test market confidence.
