Wall Street ended 2025 lower on the final trading day, but the S&P 500, Dow, and Nasdaq all posted double-digit gains for the year, fueled by AI-driven stock surges and record highs. The Dow also notched its longest monthly winning streak since 2018.

Wall Street ends year's final session lower but closes out 2025 with big annual gains

January 1, 2026

NYSE / REUTERS

Wall Street closes 2025 lower but posts strong annual gains as AI stocks and tech lead historic rally.

Wall Street’s major indexes finished lower in the final trading session of 2025 on Wednesday, December 31, but still recorded significant annual gains after a roller-coaster year dominated by President Donald Trump's tariff uncertainties and a surge in AI-focused stocks.

The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all posted double-digit gains for the year, marking their third consecutive year in the green—a streak last seen from 2019 to 2021.

The Dow also achieved its eighth straight monthly gain, the longest such streak since 2017-2018. The rally was fueled by an insatiable appetite for artificial intelligence stocks, which helped all three indexes reach record highs in 2025.

Preliminary data showed the S&P 500 fell 50.37 points, or 0.73%, ending at 6,847.18 points. The Nasdaq dropped 178.03 points, or 0.76%, to 23,241.05, while the Dow fell 301.95 points, or 0.62%, closing at 48,065.11.

On the day, energy and technology stocks slipped. Microsoft, one of the largest tech sector weights, declined, and EQT Corp saw a sharp drop.

Wall Street rebounded strongly from April’s lows, when Trump’s so-called “Liberation Day” tariffs triggered a global market sell-off, prompting investors to shy away from U.S. stocks and clouding the outlook for interest rates.

Despite expectations for a traditional “Santa Claus rally”—in which the S&P 500 typically rises over the last five trading days of December and the first two of January—the market experienced its fourth consecutive day of losses, defying historical patterns, according to the Stock Trader’s Almanac.

AI trade beneficiaries, including bellwether chipmaker Nvidia, saw massive gains throughout the year. Nvidia became the first publicly traded company to reach a $5 trillion market capitalization.

The communication services sector emerged as the top performer on the S&P 500 in 2025, led by a significant surge in Alphabet’s stock.

-Production: Soren Larson, Alex Cohen/Reuters