S&P 500 2025 Year-End Performance: 16.4% Gain and Late-Year Pullback Analysis

This analysis is based on the Seeking Alpha report [1] published on January 4, 2026, which detailed the S&P 500’s (^GSPC) 2025 performance. The report highlighted a 16.4% annual gain, four consecutive daily losses to end the year, and a sustained “golden cross” (50-day moving average > 200-day moving average) since July 1, 2025.

Internal market data [0] confirms the golden cross: as of December 31, 2025, the 50-day MA stood at $6802.55, well above the 200-day MA of $6286.45. However, a discrepancy emerged regarding the late-year losses: internal data shows only two consecutive losses on December 30 (-0.06%) and 31 (-0.77%), not four. This discrepancy may stem from date range differences or data source variations. The pullback occurred amid thin holiday liquidity, with daily volume averaging 3.4B shares during the final three trading days (vs. an annual average of 5.12B shares [0]).

The 16.4% gain is confirmed as likely total return (including dividends) [2], while internal data shows a 15.64% price return (excluding dividends) for the year [0]. The index reached a 52-week high of $6945.77 on December 26, 2025, before closing the year at $6845.49 [0].

1. Extended bullish momentum
   : The 2025 gain marks the third consecutive year of double-digit S&P 500 returns (24.2% in 2023, 23.3% in 2024, ~16.4% in 2025) [2].
2. Technical strength confirmed
   : The sustained golden cross since July 1 is a well-recognized indicator of long-term upward momentum [0].
3. Seasonal liquidity impact
   : Thin holiday trading amplified the late-year pullback, a common seasonal trend that can exaggerate price movements [0].

• Opportunities
  : Analysts forecast 2026 S&P 500 gains driven by AI-related earnings growth (14.7% projected) [4], with a median forecast of a 17% gain (to 7,968) [4].
• Risks
  :
  • Trade policy tensions: Tariffs in April 2025 caused a market pullback, and ongoing tensions remain a concern [3].
  • AI profit realization: Investors are demanding proof that AI infrastructure spending will translate into durable profits [4].
  • Federal Reserve policy: The timing and pace of 2026 rate cuts will be a critical sentiment driver [4].

The S&P 500 delivered a 16.4% total return (15.64% price return) in 2025, marking three straight years of double-digit gains. A sustained golden cross since July 2025 indicates long-term technical strength, while a late-year pullback (two consecutive losses) was amplified by thin holiday liquidity. The 2026 outlook balances AI growth potential with risks from trade policies, AI profit realization, and Federal Reserve rate decisions.