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2025 Market Performance

Markets delivered a strong year in 2025 across most parts of the globe. The S&P World Index was up 23%, while the S&P 500^® was up 18% and posted 39 record closing highs during the year, despite persistent geopolitical, tariff and inflation pressure.

Sector leadership in the U.S. was taken by Communication Services and Information Technology, consistent with the market narrative dominated by continued investor focus on AI and digital infrastructure. The “AI story” was not uniform across tech though—gains remained concentrated in hardware, data centers and computers, while software lagged.

Fixed income indices generally delivered positive performance globally in 2025. Monetary policy in the U.S. moved onto a rate-cutting path in the second half of the year. Federal Reserve rate cuts pushed short-term Treasury yields lower, with credit outperforming government bonds.

Debt markets were increasingly tapped to finance structural investment themes, particularly AI-related infrastructure. Issuance linked to data centers and AI projects continued to rise.

Commodity performance in 2025 was led by Metals, while Energy was weak. Precious Metals performed particularly well, with Gold and Silver reaching multiple record highs over the year. Industrial Metals also strengthened, benefiting from supply constraints and rising structural demand linked to higher demand for electricity and growing power needs from data centers and AI infrastructure. In contrast, Crude Oil prices generally declined in 2025 because global supply exceeded demand.

Leading Thematic Performers in 2025

The strongest-performing themes in 2025 from our S&P Thematics Dashboard were generally supported by tangible, near-term investment.

Precious Metals led the year. Silver (up 132%) and Gold (up 106%) stood out as macro uncertainty and ongoing geopolitical tensions sustained demand for real assets. Central bank buying and constrained supply¹ added fuel to the movement.

We also saw strength across the broad materials complex. Metal & Mineral Mining (up 95%) and industrial metals such as Copper (up 75%), Nickel (up 60%) and Aluminum (up 47%) were supported by power-grid expansion tied to higher electricity demand and advanced manufacturing buildouts.

Technology leadership was driven by the physical infrastructure linked to AI, while Software underperformed. Telecommunications Satellites (up 77%), Optical Communications (up 73%) and Data Centers & High-Performance Computing (up 71%) benefitted from the need to supply power and expand network capacity. As questions around AI monetization grew louder, investors gravitated toward areas where demand was tangible and near-term.

Defense-linked themes were another clear area of strength. Weapons (up 45%), Defense Technology (up 44%), Aerospace (up 42%) and Aerospace & Science Satellites (up 74%) advanced on the back of sustained geopolitical tensions and rising defense budgets. Also, adjacent themes like Space saw strong momentum in 2025, with the S&P Kensho Global Space Index up 53%. The index has approximately 58% of its constituents classified as Aerospace & Defense.

Quantum Technology in 2025

Quantum Technology deserves special mention. After posting triple-digit gains in the first half of the year, the theme ended 2025 up a still-impressive 64%. In 2025, global quantum technology-linked ETFs reached approximately USD 4.3 billion in AUM, adding to the momentum in the theme.

Where Themes Struggled

Underperformance in 2025 was mostly driven by AI- and automation-related initiatives and a corporate focus on protecting margins. Staffing Services, Human Resources and Business Consultancy were down 19%, 17% and 14%, respectively.

Discretionary spending themes also had a tough year. Restaurants, Bars & Cafes (-8%), Alcoholic Beverages (-11%) and Packaged & Processed Foods (-10%) struggled with uneven real income growth across income cohorts and ongoing margin pressure. Consumer Retail also lagged, delivering a modest 3% return, as selective consumer spending continued to weigh on volumes.

Themes Carrying Forward into 2026

Market attention entering 2026 remains focused on areas where there is demand.

• Electricity usage linked to AI demand: Rapid data center expansion continues to strain power availability, keeping electricity and power infrastructure in focus.
• AI adoption moving into real-world applications: Interest is moving toward practical deployment. Healthcare, robotics and autonomous vehicles are gaining traction as use cases move from concept toward early implementation. Momentum has been particularly notable in parts of Asia.
• Blockchain applications beyond cryptocurrency: Regulatory progress and rising institutional engagement have directed attention toward stablecoins and tokenization. Banks and corporations increasingly use blockchain to modernize payments and broaden financial infrastructure.

¹ Thukral, Naveen and Lucas Liew. “Silver shines in 2025 global market spotlight as softs, oil lag.” Reuters. Dec. 31, 2025.

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