How Trump’s policies, AI boom and global events shaped Wall Street’s wild year

January 27: DeepSeek

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Venture capitalist Marc Andreessen called it “AI’s Sputnik moment” on January 26. The launch of a powerful, seemingly low-cost artificial intelligence program by DeepSeek, a Chinese startup, appeared to threaten the foundations of the latest tech boom in the United States. When US markets opened the next day (Monday), Nvidia shares fell 17 percent, losing nearly $600 billion in value, the largest loss in market history. Semiconductor stocks had their worst day since March 2020.

Nancy Tengler, president of Laffer Tengler Investments, said her heart was pounding as she scrolled through her phone to catch up on the news while in the car en route to CNBC for a television interview. He said his reaction as the details became clearer was, “This is an opportunity.”

Like some, he was skeptical, thinking DeepSeek kept its cost estimates low. He was bullish on technology stocks during his television appearance. His firm has bought shares of Nvidia and other favorite artificial intelligence companies.

It turned out to be a good call. DeepSeek did not sound the death knell for America’s approach to artificial intelligence or halt massive tech spending to develop the technology. Nasdaq 100 Index reached a record level again within a month and increased by 21 percent in 2025. Nvidia increased by 40 percent this year.

April 2: ‘Liberation Day’

Garrett Melson’s first reaction was shock. Then, later in the day, a brief reprieve of gallows humor as markets tumbled and social media users tried to piece together exactly what Trump had done: Trump’s trade war had gone so far as to punish the penguin-inhabited islands near Antarctica, as it was soon called.

“When you’re watching a sea of ​​red on your screen, sometimes you have to laugh a little,” said Melson, portfolio strategist at Natixis Investment Managers Solutions.

It was the biggest two-day shakeup in global markets since March 2020, when the pandemic began shutting down the United States. Days of panic selling began as Treasuries retreated (breaking away from their typical haven role) as China retaliated, recession fears flared, and Trump’s willingness to challenge the global economic order cast doubt on the safety of US government debt.

In the days following the president’s announcement, Melson worked with his colleagues late into the evenings and on weekends analyzing, looking at charts, and preparing comments for clients. In a portfolio model, the team increased its allocation to U.S. stocks and corporate bonds.

At Argent, Ellerbroek emailed the investment team on April 4. “This is a scary moment,” he wrote. “If you asked me to choose whether we were closer to the beginning or the end of this chapter, I would probably say start.” Ellerbroek held his position and decided not to buy the fallen stocks because there was too much uncertainty.

Neil Sutherland, a fixed income investor at Schroder Investment Management, and his colleagues launched a project to track the results. They updated the average US tariff rate on affected countries as Trump continued to launch new salvos, modeling asset price impacts and relaying their findings to worried clients. They finally gave up.

“It really became pointless because it would change in five minutes,” Sutherland said. “We needed to understand that this was a moving target.”

April 9: Tariff pause

Tunkel, the BCA stock strategist, had taken a day off to look for a house in Boca Raton, Florida. It had been a relatively quiet day for stocks, with the S&P 500 moving sideways. But he continued to listen to the radio during the three-hour drive from his home in Venice on the Gulf Coast.

Later, when he broke for lunch and caught up, the fear that had descended on Wall Street days before quickly gave way to euphoria. At 1:18 p.m., Trump announced he was pausing most tariffs for 90 days after a sell-off in the bond market raised interest rates, raising fears in Washington.

The S&P 500 rose 7 percent in less than 10 minutes for a 9.5 percent gain, the biggest one-day gain since October 2008.

“I think it’s a historic thing to see these big moves being made in response to the news,” Tunkel said. “We will always remember those moments”

Jay Woods, chief market strategist at Freedom Capital Markets, saw the moment firsthand from his seat at the New York Stock Exchange. After the initial hubbub died down, a group prepared to greet the visitors. He was teaching technical analysis at Fordham University. Luckily, he had planned a field trip that his students could visit.

When they arrived, the Great Throne was a sea of ​​green; Nearly everything was up except for the VIX, the so-called fear meter, which was one of the few exceptions. Alerts were constantly coming from brokers’ desks, some accompanied by the sound of the cash register bell.

The day set up a dynamic that would occur repeatedly over the next few months and became known as the TACO trade, short for Trump Always Chickens Out. Traders began to ignore his worst tariff threats and bet they were just a negotiating tactic. Therefore, sales were buying opportunities.

Chase Games, one of Woods’ students, was excited. Visiting the stock exchange was “honestly a big dream of mine,” Games said. “I got lucky.” In October, he started working as an intern at Woods’ firm, Freedom Capital.

June 21: Bombing of Iran

It was a Saturday evening in New Jersey, and Siebert Financial’s Mark Malek was recently celebrating his birthday when he learned that the United States had bombed Iran’s nuclear facilities; traders feared the move could dangerously escalate conflicts in the Middle East.

“If this is true, my phone is going to ring,” Malek told his family at the French restaurant in Asbury Park. It didn’t take long before it happened.

Despite all the risks, Malek bet — counter-intuitively — that stocks would rise. The S&P 500 had already pulled back recently as traders became concerned about the growing conflict between Israel and Iran. But he thought the US would no longer escalate the conflict and that the market’s reaction would ultimately be relief.

Of course, the S&P 500 rose about 1 percent on Monday and then Tuesday as Trump moved toward a ceasefire. It closed the week at a record level again.

October 10: Crypto dives

“What’s going on?” Jeff Dorman thought crypto markets were getting worse. Trump had threatened additional 100 percent tariffs on China, and traders were selling risky assets. And Bitcoin, which recently rose above $125,000, began to decline as leveraged bets unraveled.

Messages on Slack piled up at Arca, the crypto asset manager where Dorman is chief investment officer. He was at home, but soon he and his team were on a Zoom call. They came up with a plan to cover short positions by covering falling assets.

In the early days of investing together, it would take them all night. After years of experience, they had learned to prepare a plan and leave it to their merchants to implement it. The CIO assessed the situation, went to bed and “slept like a baby.”

Dorman remains bullish on some segments of the crypto industry. Still, for now, this moment has dampened the cryptocurrency euphoria that has been floating around the markets for most of the year, with Trump backing the industry.

It also negated the buy-the-dip formula that has paid off elsewhere in 2025. Bitcoin is heading for its first annual decline since the 2022 crash, and other popular cryptocurrencies have fallen over the past two months. This has affected crypto-related stocks such as stocker Strategy and American Bitcoin Corp, which is affiliated with the Trump family.

21 November: ‘A breath of relief’ at the end of the year

The move away from risk appeared expected to drag the stock market lower as well, as AI valuations were frothy and concerns about the Fed’s rate cut path weighed on the S&P 500.

The concerns did not last long. On November 21, stocks began to recover on expectations that the cooling U.S. labor market would encourage the Fed to continue easing monetary policy as it did at its December 10 meeting.

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Meanwhile, the U.S. economy has continued to defy recession fears despite Trump’s trade war, federal employee layoffs and impasses in Congress that have led to a record-long government shutdown. Despite all this bubble talk, the artificial intelligence boom did not end in failure. And whoever Trump chooses to replace Fed Chairman Jerome Powell next year seems likely to support Trump’s push for faster rate cuts.

This created an optimistic atmosphere towards 2026 at the end of the year. Wall Street strategists predict the S&P 500 will rise for the fourth straight year after this year’s gains irritated anyone stuck with bearish calls. If they’re right, this will be the longest winning streak in almost two decades.

“Overall,” Freedom Capital’s Woods said, “we’re breathing a sigh of relief that we’ve weathered some of the biggest waves this market has ever thrown.”