Most investors and analysts predicted this year would be different, given Donald Trump’s return to power in the world’s biggest economy, but few could have guessed how wild the ride would get, or the final results.
World stocks recovered from April’s “Liberation Day” tariffs’ crash and have risen 21% in 2025 – a sixth year of double-digit gains in the last seven – but look elsewhere and the surprises jump out.
Gold, the ultimate safe port in a storm, has surged nearly 70% in its best year since the 1979 oil crisis, while the U.S. dollar is down nearly 10%, oil is off almost 17%, yet the junkiest of junk bonds have soared in the debt markets.
The “Magnificent Seven” U.S. tech giants seem to have lost some of their sparkle since artificial intelligence darling Nvidia became the world’s first $5 trillion company in October, and bitcoin has suddenly lost a third of its value, too.
DoubleLine fund manager Bill Campbell described 2025 as “the year of change and the year of surprises,” with the big moves all “intertwined” in the same seismic issues – the trade war, geopolitics and debt.
“If you were to tell me a priori that Trump was going to come in and use very aggressive trade policies and sequence it the way he has, I would not have expected valuations to be as tight or lofty as they are today,” Campbell said.
A 55% boom in shares of European weapons makers has been driven by Trump too, following signals he will scale back Europe’s military protection, forcing the region – and other NATO members – to rearm.
That also helped drive the best year for European banking shares since 1997, while there’s also been a 70% leap in South Korean stocks and near-100% returns on defaulted Venezuelan bonds. Silver and platinum are up an even more dazzling 165% and 145%, respectively.
A trio of U.S. rate cuts, Trump’s criticisms of the Federal Reserve (Fed) and broader debt worries have all impacted bond markets.
The U.S. president’s “big, beautiful” spending plans led the 30-year Treasury yield to surge past 5.1% to its highest since 2007 in May. Though it is now back at 4.8%, the re-expanding gap to short-term rates that bankers dub “term premia” is causing jitters again.
Japan’s 30-year yields are back at a record high, too. The juxtaposition here is that global bond market volatility is at a four-year low, and local-currency emerging market debt has had its best year since 2009.
AI is all part of the debt mix, too, as firms borrow to invest. Goldman Sachs estimates the big AI “hyperscalers” have spent nearly $400 billion this year and will spend almost $530 billion next year.
The dollar’s decline leaves the euro up almost 14% in 2025 and the Swiss franc 14.5% higher. China’s yuan has just broken through 7 per dollar, while the yen’s December bashing leaves it flat for the year.
Trump’s re-engagement with Russian President Vladimir Putin has helped the ruble surge 40%, although it remains heavily restricted by sanctions and just leads the 34% tear from gold producer Ghana’s cedi.
Poland’s zloty, the Czech crown and the Hungarian forint are all between 15% and 20% stronger, and Taiwan’s dollar jumped 8% in just two days in May, while Mexico’s peso and Brazil’s peso both shrugged off the trade war drama to score double-digit gains.
“We don’t think this is just a short-term phenomenon,” said Jonny Goulden, head of EM fixed income strategy research at J.P. Morgan. “We think a bear market cycle for EM currencies that has lasted for 14 years now has turned here.”
Argentina has been another standout. Its markets were hammered when President Javier Milei suffered a thumping regional election defeat in September, but then went wild weeks later when a $20 billion pledge from Trump helped Milei romp in national midterms.
In crypto, Trump launched a memecoin and gave a presidential pardon to Binance founder Changpeng Zhao. Bitcoin hit an all-time high above $125,000 in October but then crashed to $88,000 and will end the year down nearly 7%.
It won’t be a quiet start to next year either.
Trump is already revving up for the midterm elections in November and is expected to name his new head of the Federal Reserve shortly, which could be crucial for the central bank’s independence.
Investors will be looking to see if China’s economy can push on. Israel will hold elections before the end of October, which will keep the fragile Gaza cease-fire in focus. Ending the Ukraine war remains devilishly difficult, while Viktor Orban faces his toughest election yet in Hungary in April and Colombia and Brazil have pivotal elections starting in May and October, respectively.
And then there are all of the AI unknowns.
Satori Insights founder Matt King said markets are going into 2026 in a “remarkable” situation in terms of valuations and with leaders like Trump “looking for excuses” to give voters money through stimulus or tax breaks.
“There’s just this ongoing risk that we are pushing the limits of what easy money can do,” King said.
“Already you are starting to see the cracks appearing around the edges, in terms of growth of term premia (in the bond market), in terms of bitcoin suddenly selling off and in terms of the ongoing gold rally.”
