As the year comes to a close, traders are reflecting on the stock market performance in 2025 to shape their investment strategies for 2026. Despite volatility, the tech sector emerged as a big winner, with the VanEck Semiconductor ETF (SMH) leading with a 44.6% year-to-date gain amid the AI boom.

While the Dow Jones Industrial Average (DJI) has a modest lead for 2025, Caterpillar Inc (CAT) surprisingly takes the crown as the best-performing Dow stock. With a 61.8% lead, CAT has been quietly chalking up gains, eyeing its seventh monthly gain and its best annual performance since 2017.

Despite its outperformance, options pits show higher put/call volume, suggesting caution. However, investors may want to consider adding Caterpillar stock to their portfolios in 2026, as its low Schaeffer’s Volatility Index (SVI) and high Schaeffer’s Volatility Scorecard (SVS) imply strong performance and low volatility expectations.

Read more at Yahoo Finance: Best-Performing Dow Stock of 2025 Will Surprise You