This has been one of the greatest market comebacks in history.

What a year.

I don’t think anyone had the slightest idea how eventful 2025 was going to be.

Back in April, the S&P 500 was down over 15% on the year, its 4th worst start ever. After a 38% rally, it’s now up 17% on the year, hitting 38 all time highs along the way, just in time for Christmas. 7000 is now a fingertip away.

This has been one of the greatest market comebacks in history.

Although 17% is a really good performance for the index, it is actually below its average up year. Of course, over the long run, the average price change across all years is about +8%, but as usual, averages tend to be deceiving. The average during up years for the S&P is actually +21% versus -13% during down years.

Even with all the hype around US stocks, this was one of the worst years for US markets relative to global markets since 2009.

On an equal weighted basis, the US ended up in the bottom group. That means many other countries did much better while everyone was focused on the same big US names. The big question now is whether we’re seeing a reversion of this trend in 2026.

* Note this is the US equal weighted index.

The biggest theme of the year was debasement.

People started worrying about money losing value. Governments are spending a lot. Debt keeps rising. Global tensions are high. So investors ran toward assets. Gold and silver exploded. Since late August, silver is up around 90%. Gold is up about 35%. That is truly historic.

That is why gold is having its best year since 1979.

Gold went first. Then silver. Then palladium. Now copper and steel stocks are moving. Aluminum might be next. 2026 could be a supercycle in commodities.

Only crypto has been standing out this year, though not in a positive way.

In fact, it is the only major asset class that is actually down so far.

Since November, net flows into both Bitcoin and Ethereum ETFs have turned negative and remained so. But they are starting to turn positive, which tends to happen very close to the actual bottoms.

The biggest companies kept getting bigger.

Nvidia is now the largest and most important company in the world. It became the poster child of the entire AI boom. The big lesson here is that leaders can stay leaders longer than you think, especially during big technological shifts.

Nvidia is still the center of everything.

It continues to dominate AI compute revenues in a way that is almost hard to believe. Nvidia’s Hopper chips, its previous generation of GPUs, alone bring in more revenue than all competing AI platforms combined. And this is before the next chip generations fully roll out.

No one comes even close.

Every few months, fears around AI return.

But it’s hard to be bearish when GPU rental prices keep rising across older generations, even while people say there is too much supply. If there were truly too much supply, prices would drop fast. Instead, companies are still fighting for compute. Demand continues to outpace supply, and that makes it very hard to be bearish on AI right now.

The best candidate for the word of the year in 2025 is probably “capex.” Tech companies spent massive amounts of money on AI, data centers, and chips. And this spending is not going to slow down anytime soon.

2025 was also a record year for ETFs.

US ETFs pulled in about $1.4 trillion this year. Over 1,000 new ETFs launched. Trading volume hit a record. The last time all of that happened was in 2021.

This is not something we typically see early in a bull market either. So while there is still room to run, we are definitely not in the early innings anymore.

This is probably one of my favorite charts this year.

It clearly shows that almost all of the gains this year came from earnings. Yes, there are pockets of speculation. There always are. But the bottom line is that we are not seeing market wide euphoria. This will eventually change. But it is hard to see this AI boom ending while everyone is simply making more money.

And earnings are not slowing down.

They are expected to grow about 23% for the Mag 7 and 11% for the rest in 2026.

As long as earnings do well, it is very hard for this bull market to end. Profits are what matter in the end.

2025 was a wild year, and one thing is for certain. Next year will be full of surprises. This is where things stand right now. Government debt keeps rising. Global tensions are still high. AI investment is accelerating, and companies are not slowing down on chips, data centers, and infrastructure. Earnings are still growing, but expectations are much higher, which means markets will react faster and harder to surprises. Leadership will rotate, new themes will emerge, and volatility will likely pick up again. It’s going to be an interesting year.