Equity markets closed out the fourth quarter of 2025 on a strong note, buoyed by an interest rate cut from the Federal Reserve in December. Delighting investors, 2025 marked the third consecutive year in which equities delivered double-digit returns. This extended bull market was powered largely by three federal rate cuts during the second half of the year, robust AI-driven technology earnings, and broadly positive investor sentiment.

During the fourth quarter, inflation continued to show incremental signs of easing, while economic growth remained resilient, contributing to an environment often described as the “Goldilocks” scenario. This balance of moderating inflation and steady growth helped maintain investor confidence throughout the quarter.

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