Top ETF Stories of 2025

Wall Street finished 2025 on an upbeat note. The S&P 500 finished the year with 16.39% gains, marking its third successive year of double-digit gains. The Nasdaq Composite surged 20.36%, thanks to sustained enthusiasm around artificial intelligence (AI), while the Dow advanced 12.97% in 2025, weighed somewhat by its limited exposure to technology stocks, as mentioned on CNBC.

Markets Rebound From Tariff-Led Turmoil

The strong year-end performance marks a notable recovery from the sharp sell-off seen early in 2025. To start 2025, markets were hit by the rise of low-cost AI initiatives from China and their adverse impact on U.S. Big Tech, Trump’s tariffs announced in April, sticky inflation and persistently high interest rates. Stabilization in the market returned in the month of May after a tariff-led turbulent April.

In April 2025, the S&P 500 had fallen nearly 19% from its February peak and briefly slipped below the 5,000-mark for the first time since April 2024, avoiding bear-market territory by a slight margin. However, easing trade tensions and back-to-back trade deals thereafter brought life back to Wall Street.

Three Fed Rate Cuts: Outlook Constrained

There were three Fed rate cuts last year, with the action starting in September.After three rate cuts in 2025 totaling three-quarters of a percentage point, the Fed’s outlook for 2026 looks more controlled.

Policymakers continue to project just one rate cut in 2026, consistent with their September forecast. Fed Funds rate is projected to be 3.4%, the same as forecast in September. Fed Funds rates are expected to be 3.1% for both 2027 and 2028 (read: 'A Hawkish Cut' From Fed? ETFs to Gain).

Gold & Silver Glitter

Gold and silver sizzled in 2025, both hitting all-time highs. Trade tariff disputes and fears of an economic slowdown have increased demand for gold and silver as safe-haven investments. Meanwhile, silver’s demand heightened due to its industrial usage, mainly from the AI arena (read: Are Silver ETFs Better Plays Than Gold Now?).

Additionally, the U.S. dollar remained subdued in 2025. Since metals are priced in the greenback, a weaker dollar supported higher metal prices. Investors should note that mining stocks often act as leveraged plays on the underlying metals. This is why gold and silver mining ETFs surged in 2025.

SPDR Gold Trust GLD was up 63.6% over the past one year (as of Jan. 2, 2026), while VanEck Gold Miners ETF GDX advanced 144.9%. iShares Silver Trust SLV added 143.7% and iShares MSCI Global Silver and Metals Miners ETF SLVP added about 181% (as of Jan. 2, 2026).

Longest U.S. Government Shutdown

The mid-year winning momentum faded suddenly when the longest U.S. government shutdown brought the fourth-quarter economic progress to a halt.The shutdown began on Oct. 1, 2025, after last-minute talks related to a funding plan between lawmakers and President Trump failed and ran till Nov. 12, 2025 (read: US Government Shutdown Puts These ETFs in Focus).

AI Drives Three-Year Market Run: Overvaluation Woes Surface

AI was the dominant driver of the market’s advance over the last three years. In 2023, the S&P 500 jumped 24% after the debut of ChatGPT. That momentum carried into 2024, with the index rallying another 23%.

Although AI dominated 2025 as well, overvaluation concerns intensified in the AI space. Moreover, Big Tech is pouring billions into AI. Circular financing among tech behemoths has also been a cause of concern for investors. NVIDIA NVDA — the AI and chip giant — gained a modest 30.7% over the past one year while it became the first company to hit a $5 trillion market cap in late October 2025 (read: Should You Buy NVIDIA as It Nears $5T Market Cap? ETFs in Focus).

Many are concerned about the payoff timeline of these mammoth investments. In the first nine months of 2025, AI categories made up 37% of the real GDP growth of the United States, with software and servers being the key contributors, per Barron’s.

International Stocks Beat U.S. Stocks

After years of lagging, international stocks have outperformed U.S. markets. Inflation concerns and new tariffs have shifted investor interest abroad, driven by solid European fundamentals. With historically wide valuation gaps, international stocks appear attractive. iShares International Select Dividend ETF IDV gained about 45.7% over the past one year (as of Jan. 2, 2026) (read: Europe ETFs Beating S&P 500 in 2025: Here's How).

The initial phase of the year saw policy easing from the ECB, boosting Eurozone ETFs meaningfully. iShares MSCI Eurozone ETF EZU advanced about 38.6% over the past one year (as of Jan. 2, 2026). While the Bank of Japan (BoJ) walked in the opposite direction in 2025, raising rates. Despite rate hikes, iShares MSCI Japan ETF EWJ gained 20.9% during that timeframe. The election of Prime Minister Takaichi in October 2025 strengthened hopes for a fiscal boost.

Seesaw Ride of Cryptocurrencies

Bitcoin prices were off about 7% over the past one year (as of Jan. 2, 2025). The cryptocurrency underwent steep ups and downs during the year, starting at about $93K, hitting a high of $126K in October and then logging a decline to close out the year. The crypto space has gained strength from Trump’s election. 

In early March 2025, there was an executive order by Donald Trump to establish a strategic Bitcoin reserve for the United States. Investors found the move underwhelming. iShares Bitcoin Trust ETF IBIT lost about 8.9% over the past one year. 

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

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