US markets dominate the various global indices (e.g. US equities now make up 72% of the MSCI World Index vs UK at a mere 4%) and so rightly get the headlines, with the S&P 500 up 16% for the year. Relatively less attention has been paid to Euro Stoxx 50 and Shanghai Stock Exchange, both up 18%, Tokyo Stock Exchange +22% and Korea Stock Exchange delivering a remarkable +76% in local currency terms, to pick just a few examples.

We mentioned the strength of Alphabet (Google) last quarter and shares added a mere 47% over the following three months, equivalent to $1.2tn in market value. Just extraordinary numbers. This is all on the back of market excitement surrounding Alphabet’s progress in AI, notably with their Gemini platform. Other major beneficiaries of the AI enthusiasm were semiconductor giants Nvidia, Broadcom and Taiwan Semiconductor. There was also a remarkable period of excitement for Oracle in the late summer when news of their growing AI backlog sent shares up close to 40% in a day, before worries about excessive leverage crept into investor sentiment, leaving Oracle down sharply in the final quarter of 2025.

It was a year to remember for banks, as the prospect of higher long-term interest rates (leading to higher profits for banks) buoyed sentiment and earnings. The US mega banks (JPMorgan Chase, Bank of America, Morgan Stanley, etc) all saw shares rise handsomely, but mention must go to London-listed Barclays, Lloyds and Standard Chartered, who have shaken off the shackles of many years left out in the cold to deliver returns ranging from 77% to 84% over 12 months.

At the other end of the spectrum, it was a dull year for the Consumer Staples sector, as squeezed customers were in no mood to splash out on alcohol, food or cosmetics. The Spirits market was particularly hard hit, with the likes of Diageo, Rémy Cointreau and Pernod Ricard all at multi-year lows. The least discretionary areas, such as supermarkets and cleaning products, have been less bad but there is no escaping that it is a tough market to be a retailer.

The above article has been prepared for investment professionals. Any other readers should note this content does not constitute advice or a solicitation to buy, sell, or hold any investment. We strongly recommend speaking to an investment adviser before taking any action based on the information contained in this article.

Please also note that the value of investments and the income you get from them may fall as well as rise, and there is no certainty that you will get back the amount of your original investment. You should also be aware that past performance may not be a reliable guide to future performance.