“To push meaningfully higher in 2026, equities will need confirmation that the Fed can deliver at least the two rate cuts still priced by the market, with growth unimpeded,” noted Stephen Innes of SPI Asset Management.
Minutes of the Fed’s policy meeting in December, which were released on Tuesday, indicated that most of its officials see future rate cuts as appropriate, should inflation cool over time as expected.
A surge in the tech sector on the back of the vast amounts of cash pumped into AI also helped push stocks to record highs, but concerns that valuations of AI stocks are too high gnawed at investors late in 2025.
AI chip juggernaut Nvidia became the world’s first US$5 trillion company at the end of October, while its current worth stands at around US$4.5 trillion.
The price of gold, seen as a safe-haven investment, scored multiple record highs this year.
The precious metal has benefitted from weakness to the dollar caused by the Fed’s rate cuts and economic growth concerns triggered by President Donald Trump’s tariffs war.
On Wednesday, the price of silver slid further, having struck record highs in December.
Oil prices have retreated nearly 20 percent over the year, pressured by an oversupplied market.
Bitcoin, emphasising the volatile nature of the cryptocurrency sector, soared to a record high above US$126,000 in October before ending the year around US$88,000.