The S&P 500 gained more than 18% in 2025, but that metric only tells part of the story. There were numerous volatile days and a shifting geopolitical landscape. When we take a closer look at the sectors that performed well in the past, and consider U.S. markets in a global context, 2025 can tell us quite a bit about where we may be headed in 2026.
Without further ado, let’s dig into last year’s winners, losers, and everything between.
2025 Losers
Consumer confidence
Two key studies tracking consumer confidence—the Conference Board and the University of Michigan’s consumer sentiment surveys—showed Americans are losing confidence in the economy. Numbers dropped to multi-year lows thanks to concern about affordability, jobs, tariffs, inflation, and a general decline in the country’s economic outlook.
REITs
Real estate investment trusts reflected some of the broader headwinds for real estate in 2025. The Fed’s decision to wait longer than expected to cut rates created a perfect storm for the sector: higher rates plus flagging investor demand. As with all things, however, the decline wasn’t universal. REITs covering office space and shopping malls struggled the most, while REITs that focused on data centers, AI infrastructure, and other key industrial segments showed more resilience.
Oil
Global oil supply exceeded demand in 2025, causing a price decline in crude oil. Ongoing geopolitical risk—including several major regional conflicts in oil-rich locations—mean supply disruptions are likely to continue into 2026, causing further price volatility.
The U.S. dollar
The U.S. dollar index, which shows how the greenback stacks up to a basket of global currencies, fell in 2025. Experts attribute the drop to the new direction in U.S. policy, as well as growing government debt and weakening consumer confidence. It’s possible the move towards rate cuts contributed, as well.
2025 neutrals
IPOs and M&A
Anyone hoping that the initial public offering (IPO) and mergers and acquisition (M&A) markets would pick up after years of stagnation may have been disappointed by 2025. While M&A and IPOs both picked up in 2025, activity remained significantly lower than 2021 levels. This makes a certain amount of sense—these markets tend to be fueled by access to capital, and interest rates began increasing in 2022. While rates started to come down again last year, that decline fell short of the expectations set by the Fed at the end of 2024. Still, we can’t mark this a loser because the number of deals was up (just less than expected) and the valuations on the deals that did get done increased.
Private equity
The same stubbornly high rates that plagued the M&A and IPO markets also impacted private equity. Because we did eventually see rates come down, we also saw a partial recovery in PE. That said, private equity was far from a monolith last year. Returns varied significantly based on manager and vintage. If you were invested in top-tier funds, you may have experienced a great 2025. If you’re just taking a generic snapshot of the industry, performance may be better described as “steady but unspectacular.” Aside from rates, PE also had inflation, geopolitical tensions, and global uncertainty to contend with. Valuations and future cash flows remain unpredictable, placing stress on this sector.
2025 winners
Precious metals
Gold and silver hit record highs in 2025. Investors often turn to precious metals when other markets—from stocks to currencies—feel volatile. The ongoing macroeconomic uncertainty (in the U.S. and globally) combined with U.S. dollar weakness, falling interest rates, and strong demand from central banks looking to boost their reserves pushed prices up. Given the underlying factors that pushed gold higher in 2025 look poised to continue, this winning streak may extend into 2026.
Non-U.S. stocks
The weakening U.S. dollar helped create a tailwind for non-U.S. stocks. International stocks posted strong earnings at lower multiples (which typically indicates better value and more upside potential). Beyond that, foreign profits tend to translate to bigger gains for U.S. investors due to the weaker dollar.
Cloud computing
Cloud computing providers, specifically the hyperscalers that enable artificial intelligence (AI) and other super computing, clocked major wins in 2025. Last year saw a huge jump in demand for AI at the company level, as well as significantly higher usage by individuals. That translated to a big demand for data storage, computing power, data centers, and electrical grid support. The companies that stepped in to meet this demand spent big money in 2025, and pledged to continue that commitment into 2026 and beyond. (These pledges total hundreds of billions of dollars.)
For many, this pivot towards AI infrastructure marked a paradigm shift; investors see this as a long-term value play that could drive overall stock prices higher as the demand for AI expands beyond the tech sector.
Bonds
The Fed’s shift toward rate cuts at the end of 2025 seems to signal an end to the period of higher-than-average interest rates that started in 2022 in an effort to curb inflation. As a result, we saw above-average returns for bonds last year. Beyond that, the ongoing economic uncertainty and stock market volatility created a renewed demand for lower-risk, income-focused investments.
Private credit
The first three quarters of 2025 were marked by tighter lending standards at traditional banks thanks to stubbornly high rates and regulatory pressure. This tightening created a financing gap which drove demand or private credit. Whether this tailwind can continue into 2026 now that we’ve pivoted towards lower rates will be a key area of focus for investors going forward.
Do you own any of these asset classes or have questions about how these winners and losers might be impacting your portfolio or overall financial plan? Set up a call to discuss.
