In the fourth quarter of 2025, US stocks gained 2.43% and ended the year up 17%, led by sectors like healthcare and value stocks. Bonds also saw gains as the Federal Reserve cut rates and job market data weakened. Cryptocurrencies, however, suffered a brutal quarter, with bitcoin losing 30% of its value at one point due to leverage-fueled selling.

Tech sector selloffs tempered gains in the stock market, with the US Market Index rising 2.4% in Q4. Value stocks outperformed growth stocks, with the Morningstar US Value Index returning 4.15% compared to a 1.61% loss for growth stocks. Dividend stocks stayed in line with the broader market, with the Dividend Composite Index returning 2.4%.

The Federal Reserve cut interest rates twice in Q4, bringing the federal-funds rate target to 3.50%-3.75%. There was dissent among policymakers on further cuts, with some advocating for more easing to support a cooling labor market. Wall Street anticipates a pause in rate cuts in 2026, with low odds of a cut in the upcoming meeting.

Gold prices surged 12% in Q4 as investors sought safe-haven assets amidst market volatility. Bitcoin and other cryptocurrencies experienced a selloff, with bitcoin falling over 23% in the quarter. The yield curve steepened, short-term yields fell, and bond market volatility decreased, even as stock market volatility increased.

Global markets saw varied performance, with Canadian stocks rallying 7.95% and Chinese stocks falling 6.8%. The year ended on a high note for the bond market, with the US Core Bond Index returning 0.97% in Q4. Crude oil prices slumped due to increased production, while copper prices soared 17%.

In summary, while stocks and bonds saw gains in Q4 of 2025, the market was characterized by volatility and sector rotations. The Federal Reserve’s rate cuts, tech sector selloffs, and geopolitical uncertainties led to mixed performance across different asset classes. Gold emerged as a safe-haven asset, while cryptocurrencies experienced a significant reversal in prices.

Read more at Morningstar: 13 Charts on Q4’s US Tech Sector Market Jitters