2025: Wall Street's Steep Ascent Up the Wall of Worry

Wall Street Climbs the Proverbial Wall of Worry in 2025

No two years on Wall Street are the same. However, 2025 is an extreme example of how one year can differ from the next. 2024 was marked by a dovish Federal Reserve board and a slow grind higher in the major market indices.

2025 started with a returning administration in Washington DC (albeit four years later), the ‘DeepSeek’ scare, and the ‘Liberation Day’ fallout. First, a Chinese company released the ‘DeepSeek” chatbot, which had similar performance to OpenAI and Microsoft’s (MSFT) wildly popular ‘ChatGPT’ large language model, and was allegedly ‘trained’ at a fraction of the cost, suggesting that the company had found the holy grail of AI. In the following weeks, AI leaders such as Nvidia (NVDA), Alphabet (GOOGL), Arm Holdings (ARM), and Advanced Micro Devices (AMD) would suffer swift losses as China threatened to take the lead in the high-stakes race for artificial intelligence supremacy. Then, on April 2^nd, President Donald Trump announced a sweeping package of tariffs on hundreds of countries, accelerating the losses and sending stocks into bear market territory.

On April 9^th, President Trump announced a 90-day pause on ‘reciprocal tariffs and stocks soared. Since then, stocks reacted positively to a preliminary and unexpected trade deal between the US and its largest trading partner, China. Finally, despite rampant investor fears, stocks exhibited resilience and shook off a targeted US attack on Iranian nuclear plants.

3 Trading Takeaways from 2025

Savvy investors understand that there are always lessons to be learned. Three of my key takeaways include:

1.       Time Heals on Wall Street: Whether it was DeepSeek or the tariff fallout, the US market tends to shake off bad news as time passes.

2.       Headlines can be a Distraction: Nearly every economist on Wall Street predicted that the Trump tariff policy would cause rampant inflation. In reality, the inflation rate is hovering near its lowest level in multiple years.

3.       Price Action is Truth: The 21-day moving average is a fantastic intermediate-term guide for investors. In the first part of the year, it warned investors to stay out of the market.However, once the market regained the 21-day moving average, it never looked back.

Bottom Line

It’s been a turbulent year, but 2025 has once again proven Wall Street’s ability to climb the proverbial “wall of worry.” From the initial DeepSeek shock and the tariff scares, the market has demonstrated remarkable resilience.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research