The five biggest market developments of 2025

Subscribe to enjoy similar stories. Shareholders around the world have enjoyed another stellar year. Stockmarkets in America, Europe, India and Japan are set to finish 2025 at or near all-time highs, with some closing in on a third consecutive year of double-digit gains.

Part of this reflects investors’ growing optimism about the profit-making potential of artificial intelligence. Animal spirits, however, have also surged more broadly. Companies in Asia’s emerging markets have never had to pay bondholders such low premiums to borrow; investment-grade American firms have not paid so little since the 1990s.

Such headline figures, however, understate how turbulent the year has been for market participants. In April the global financial system teetered on the edge of crisis after Donald Trump’s “Liberation Day" tariffs threatened to upend world trade. And over the course of the year, several longstanding trends snapped or went into reverse.

Here are the five most consequential market developments of 2025. In early April America briefly began to trade like a crisis-prone emerging market. After Mr Trump unveiled swingeing, nonsensically calculated tariffs on the rest of the world, share prices plunged.

Investors feared for the safety of government bonds and sold those as well. As bond prices fell, yields rose, which in theory should have supported the dollar. Instead, rattled traders dumped the currency.

Panic abated once Mr Trump responded, cancelling or postponing most of his tariffs. Investors concluded that the White House was not quite as free-wheeling as they had feared, and that markets could still impose discipline. Treasuries and the greenback stabilised, and America’s stockmarket resumed its long climb.