If there is one word to describe what market sentiment was in the Spring of 2025, it could’ve been: uncertainty. However, this caution, largely rooted in tariff policy fears, has slowly given way to moderate optimism as the S&P 500 finished up 16.4% in 2025. Some of the main developments that led the stock market higher were the three 0.25% rate cuts, strong corporate earnings, and investor confidence in the future of artificial intelligence. The momentum in AI is evident in the fact that the Magnificent Seven stocks finished up 22%. This year was a good reminder of the unpredictability in markets and the benefit of staying diversified and invested.
In corporate news, an electric vehicle company made headlines this week, and surprisingly, it was not owned by the world’s richest man. China’s most popular EV company – BYD – has officially overtaken Tesla to become the world’s biggest electric car seller. Although BYD’s car design is very similar to Tesla’s, it’s known for its sleek, ocean-inspired exterior, modern interior, and advanced battery technology. With Tesla's annual sales declining for a second year in a row, BYD sold 2.26 million electric vehicles in 2025. Although Tesla’s revenue has declined in part due to the expiration of its $7,500 U.S. federal EV credit, its stock has not suffered, as there is significant momentum in its AI innovation in 2026. In other corporate news, at age 95, Warren Buffett has officially retired as CEO of Berkshire Hathaway. Buffett has grown Berkshire into a multinational conglomerate that owns multiple insurance companies, Dairy Queen, and Duracell batteries, and holds stakes in many larger businesses. He leaves his one-trillion-dollar market-cap company in the hands of his successor, Greg Abel.
In economic news this week, the pending home sales report showed a 3.3% increase in November, beating the median estimate of 1.0%. Although pending home sales rose last month, the housing market is set to close out 2025 at a 30-year low in sales volume. A reason for the recent monthly uptick in volume is mortgage rates dropping to a one-year low of 6.24%. The S&P Case-Shiller home price index – which measures U.S. single-family home prices in 20 major US cities – came in at a 1.4% increase year-over-year for October, slightly above estimates of 1.1%. Compared with October’s consumer inflation figure of 3.1%, the inflation-adjusted home value has decreased slightly year-over-year. Jobless claims came in lower than expected at 199,000, down 16,000 from the previous week, suggesting a potential stabilization of the labor market.
As 2026 begins, attempts to fulfill New Year’s resolutions are in order. Studies show that out of all the people who make resolutions, almost 2/3 give up in January, and only 1/10 make it through to the end of the year. Even though these odds may seem meager and bleak, part of the battle is won by just creating goals in the first place. Neuroscientists say that one of the most remarkable abilities of the human brain is to think about our thinking, and this is what a New Year’s resolution is in practice. One neuroscientist compared life to a game of chess, noting that it is impossible to win a game based on habits, reflexes, or gut responses; the game of life requires more than reflexes and operates best with planning. Although most who make resolutions will not see them through to the end, they can rest assured that there is merit in planning ahead and putting forth the effort.
Ryan Motsinger
