Market winners in 2025 include European stocks, Latin America, and real estate; positive.
From Morningstar: 2025-05-16 05:15:00
In 2025, US stocks faced volatility even before tariff-related issues. DeepSeek AI’s launch disrupted the major technology theme that had been driving the market. AI stocks entered a bear market in March, according to Morningstar’s David Sekera.
Gold prices surged as investors sought a safe haven amidst uncertainty. Gold also performed well in 2022 during inflation-triggered losses in other assets. Outside the US, European stocks, Latin America, and real estate investment trusts saw gains after years of underperformance.
European stocks have been thriving in 2025 due to improving macroeconomic conditions. Financial services sector, including companies like Banco Santander, UniCredit, and HSBC, have seen soaring stock prices. Germany’s increased defense spending has also boosted defense stocks like Rheinmetall and BAE Systems.
Latin American equities have surged in 2025, with markets like Brazil, Mexico, Colombia, and Chile leading the way. Corporate earnings have been strong, and a weakening dollar has boosted returns for US investors. Despite challenges in Brazil and Mexico, the region is seen as having potential for future growth.
Real estate investment trusts (REITs) have outperformed in 2025, especially outside the US. Developed markets in Europe, Japan, and Australia, as well as emerging markets like Mexico, India, and South Africa, have seen double-digit gains. US REITs are also positive but lag behind global counterparts.
US mega-cap technology stocks faced challenges in 2025 after years of dominance. The rise of AI and unexpected developments like DeepSeek AI’s launch and tariff disruptions have impacted the market. Diversification into other asset classes like European stocks, Latin America, and REITs can provide exposure to opportunities beyond tech. US stocks saw unprecedented returns in 2023 and 2024, followed by a decline in 2025, signaling a return to historical averages. Investing in popular types of funds is cautioned against by Morningstar’s Jeff Ptak. Contrarian bets paid off in 2025, showing the dynamic nature of investment performance and the benefits of diversification. 1. The stock market surged to new highs today, with the S&P 500 reaching a record close of 4,300 points. This is the first time the index has surpassed the 4,300 mark, driven by strong gains in tech and healthcare stocks.
2. The latest jobs report showed that the economy added 850,000 jobs in June, beating expectations of 700,000. The unemployment rate also dropped to 5.9%, its lowest level since the start of the pandemic. This signals a strong recovery as businesses continue to reopen.
3. In international news, tensions between the US and China escalated as the US imposed new sanctions on Chinese officials over human rights abuses in Xinjiang. China responded by accusing the US of interfering in its internal affairs and vowed to retaliate.
4. Climate change was back in the spotlight as a new report warned of the increasing risk of wildfires in the western US. The report cited rising temperatures and prolonged droughts as key factors contributing to the heightened fire danger in the region.
5. In sports news, the NBA Finals are heating up as the Phoenix Suns and Milwaukee Bucks battle it out for the championship title. The Suns currently lead the series 2-1, with star player Devin Booker shining on the court. Fans are eagerly anticipating the outcome of the series.
Read more at Morningstar: 3 Surprising Market Winners in 2025