Stock prices at the end of 2025, Dow Jones shows a slight decline—yet maintains steady growth throughout the year

US stocks showed modest declines midweek. On Wednesday, the S&P 500 fell about 0.2%, aligning with the Nasdaq Composite Index. Meanwhile, the Dow Jones Industrial Average recorded a decline of nearly 0.5%.

However, looking at the overall market, 2025 has been an exceptionally robust year for equities. From the beginning of the year, the S&P 500 achieved a cumulative performance of around +17%, marking three consecutive years of double-digit gains. The Nasdaq recorded an increase of nearly 21% driven by the sustained AI boom, while the Dow Jones rose by 13%, illustrating a varied profile across indices.

Year-End Resilience and Remarkable Recovery from April Crisis

Despite a three-day streak of declines, this does not significantly damage the year’s overall performance. Notably, the recovery from early spring turmoil is worth highlighting. The broad tariff announcements in early April weighed heavily on the market, pushing the S&P 500 down nearly 19% from its February high. Since then, the trajectory reflects investors digesting the trade policy shocks and gaining confidence in corporate supply chain adjustments and margin defenses.

December is typically a strong season for stocks. The Dow Jones and S&P 500 are expected to close the month positive, marking their eighth consecutive month of gains. This is a record of continuous upward movement not seen since 2018. However, the Nasdaq is expected to be nearly flat for the month, highlighting that recent rallies have become more selective.

Macro Environment and Corporate Trends—Labor Market Remains Strong

Corporate earnings and economic data generally show stability. The labor market is a prime example. Last week, new unemployment claims dropped to 199,000, significantly below market expectations. Continuing claims also declined, confirming the resilience of the employment environment toward year-end.

Among individual companies, Nike stands out. After multiple insiders, including the CEO, increased their holdings following a decline of over 17% for the year, the stock has turned upward.

AI and Dow Theory—Subtle Changes in Market Structure

The story of the market driven by artificial intelligence continues to be prominent, but its character has subtly shifted. After the AI surge of 2023–2024, 2025 sees a broader distribution of leadership, with notable performance divergence among large tech stocks. Alphabet is seen as a major AI beneficiary by investors, rising over 65%, standing out. Conversely, Amazon’s gains remain relatively modest.

At the same time, returns outside of mega-cap stocks have improved significantly. Commodity markets, especially precious metals, have shown extraordinary strength. Gold has gained over 64% year-to-date, and silver has surged over 140%. Both are on their strongest annual trajectories since the late 1970s.

As suggested by Dow Theory, these internal structural shifts in the market imply that future returns may be more heavily influenced by fundamentals. Instead of monetary policy or large-scale AI infrastructure spending, the focus may shift to companies’ underlying earnings power, potentially leading to an environment where broad indices like the Dow Jones thrive.

Outlook for 2026—Range-Bound Returns?

Many strategists expect the stock market environment to remain solid next year. However, there is ongoing debate about whether the earnings growth necessary to justify high valuations will materialize. Profit-taking pressures at year-end could also serve as an early signal of more volatile phases ahead.

In any case, the overall trajectory of the market, including the Dow Jones, in 2026 will likely depend on macroeconomic stability and the sustainability of corporate earnings.