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U.S. stock markets closed lower in the final trading session of 2025, ending a volatile year marked by sharp swings, policy uncertainty and sustained enthusiasm for artificial intelligence stocks. Despite the day’s pullback, major indexes delivered solid double-digit gains for the year.

The S&P 500 fell 0.7% on the day to finish at 6,845.50, while the Nasdaq Composite declined 0.8% to 23,241.99. The Dow Jones Industrial Average dropped 0.6%, ending the session at 48,063.29.

All three benchmarks posted their third consecutive year of gains, a streak last seen between 2019 and 2021. For 2025 as a whole, the S&P 500 rose 16.4%, the Nasdaq gained 20.4% and the Dow advanced nearly 13%. The Russell 2000 index of small-cap stocks climbed just over 11%.

The rally was driven largely by continued investor demand for artificial intelligence-related companies, which pushed multiple sectors and individual stocks to record highs during the year. Nvidia, one of the most prominent beneficiaries of the AI boom, gained roughly 39% in 2025 and became the first publicly traded company to reach a market value of $5 trillion.

Technology and energy stocks weighed on markets in the final session. Microsoft slipped modestly, while energy producer EQT declined nearly 2%. Analysts attributed the late-year weakness to profit-taking amid low holiday trading volumes rather than a shift in broader market sentiment.

Wall Street rebounded sharply from April lows, when sweeping tariff announcements triggered a global selloff and raised concerns about economic growth and interest rates. Markets recovered as investors adjusted to policy uncertainty and focused on earnings strength and innovation-led growth.

International markets outperformed U.S. equities in some regions. An Asia-Pacific index excluding Japan gained close to 27% in 2025, reflecting increased diversification by global investors.

Market participants are now looking ahead to 2026, with expectations that performance will broaden beyond a narrow group of large-cap technology leaders. Federal Reserve policy direction remains a key focus after recent data fueled expectations of additional rate cuts under a more accommodative leadership outlook.

Trading activity was subdued in the holiday-shortened week, with total U.S. equity volume well below recent averages. Declining stocks outnumbered advancing issues across both the New York Stock Exchange and Nasdaq, underscoring cautious positioning at year-end.

Despite the final-day decline and the absence of a traditional late-December rally, investors closed out 2025 with one of the strongest multi-year performances in recent history.