Wall Street closed 2025 near record highs, with the S&P 500 rising 16.4% to 6,845.50 on New Year’s Eve, fueled by tech valuations and hopes of lower interest rates. The Dow Jones gained 13.4%, while the Nasdaq Composite surged 20.5%.

Despite initial fears over sweeping US tariffs, investors showed a stubborn cynicism dubbed “Taco” trade – Trump Always Chickens Out. Tariffs have surged to the highest average effective rate since 1935. The longest US government shutdown further clouded the economic landscape.

A sustained rise in tech stocks, driven by AI potential, buoyed the market. Nvidia became the first company in history to reach a $4tn market value, finishing the year up 34.8% and valued at $4.55tn. Tech valuations surged over 110% since 2022.

The S&P 500, dominated by tech stocks like Nvidia, Apple, Microsoft, Amazon, and Alphabet, enjoyed its third consecutive positive year in 2025. Analysts predict more of the same in 2026, issuing relatively optimistic market forecasts for the year ahead. Trump closely monitors market performance.

Read more at Yahoo Finance: Wall Street ends 2025 near record highs after year of economic upheaval