This past year, 2025, has been a whirlwind of challenges and surprises, reshaping conventional thinking about economics and investor behavior. As we turn the clock to 2026, it’s crucial to reflect on the key market movers that defined 2025 and their potential implications for the future.
Trade Turmoil and Tariff Throwdown
President Donald Trump’s “America First” agenda was a significant market driver, particularly in the first half of 2025. The U.S. trade policy uncertainty index hit an all-time high following the announcement of sweeping import tariffs on April 4, “Liberation Day.” Although the index has since eased, it remains elevated. The average effective tariff rate on imports into the U.S. surged from around 2.5% to nearly 17%, the highest level since 1935. This massive shift in trade strategy has been surprisingly well-coped with by the U.S. economy and global markets. However, the resilience of consumers and businesses in 2026 remains uncertain.
Dollar’s Drop and the Magnificent Seven
Contrary to Wall Street analysts’ predictions, the dollar fell around 10% against a basket of major currencies in 2025. The “Magnificent Seven” U.S. technology stocks outperformed dramatically, fueled by AI euphoria, but investor concerns grew regarding hyperscalers’ massive AI capex outlays. Oracle’s stock performance reflects this trajectory, with a significant rise followed by a sharp decline. If Oracle is indicative of broader sentiment, the tech-powered equity rally may face a rocky road ahead.
Yukon Cornelius Would be Proud: Silver & Gold
Safe-haven demand and bets on U.S. interest rate cuts drove a sharp rally in precious metals. Silver prices eclipsed $80 an ounce, driven by strong industrial demand and supply shortfalls. Gold prices also surged, although they have since fallen. The risk of mean reversion in 2026 could result in a sharp pullback.
Europe’s Call to Arms
European defense stocks tripled in value since Russia’s invasion of Ukraine, with a 50% gain in 2025 alone. This reflects increasing U.S. isolationism, rising geopolitical tensions, and expectations for a European economic reboot. The surge in the euro/dollar rate and the outperformance of European stocks versus Wall Street are notable market moves.
Oil Price Volatility
Geopolitical tensions, such as the 12-day war between Israel and Iran, created volatility in oil prices. However, price shifts only persisted when supply was disrupted. Global energy markets are increasingly adaptable, reducing the risk of persistent imbalances.
Power Up: Battery Storage
The U.S. battery storage market saw a record capacity jump of 12 gigawatts in 2025. China’s exports of batteries and battery energy storage systems also hit a record. Battery storage will be a key trend to watch in the coming year, as it allows for better utilization of renewable power supplies.
As we look ahead to 2026, these market movers will continue to shape the economic landscape. The resilience of consumers and businesses, the trajectory of technology stocks, the performance of precious metals, the geopolitical climate, and the evolution of energy markets will all be critical factors to monitor. The opinions expressed here are those of the author, the Editor in Charge of Reuters Open Interest.