The stock market has achieved a third consecutive year of double-digit gains, with the benchmark S&P 500 index rising 16.4% for 2025. That has happened only five times since the 1940s.
Why it matters: You wouldn't know that based on the vibes on Wall Street, where the three-year-old bull market is being questioned constantly and on a day when stocks ended the final trading session of the year solidly in the red (down 0.74% on Wednesday).
Despite the downbeat mood, strategists see stocks continuing to gain in 2026 thanks to their biggest bet and fear: AI.
The big picture: Broadly, changes from the law pose new obstacles for the poorest of households, but there are potential opportunities for working-class and middle-class Americans — such as extended tax cuts — that are worth keeping an eye out for.
Why it matters: Benefits are rising 2.8%, or about $56 a month for the average retiree, but higher Medicare premiums and tax rules will determine how much of that increase ends up in retirees' pockets.
Some Federal Reserve officials were hesitant to support more interest rate cuts in 2026, according to minutes from the Fed's most recent policy meeting published on Tuesday.
Why it matters: The Fed is split over how much more to lower borrowing costs to support the economy, a division that might deepen next year against the backdrop of President Trump pressuring the central bank to lower rates.
Meta's acquisition of Manus AI could be worth around $2.5 billion, including employee retention compensation, Axios has learned from a source familiar with the deal.
Why it matters: AI has reset startup exit valuations, driven by unprecedented revenue growth.
The U.S. economy was beaten and battered in 2025, and powered ahead despite it all.
The big picture: The question for 2026 is whether the underlying sources of weakness that are already evident will broaden out into something that threatens to undermine its overall resilience.
American stocks are underperforming international equities at their widest margin since the great financial crisis.
Why it matters: Investors are looking to increase their exposure outside of the U.S. amid policy uncertainty under the Trump administration and heightened fears over high valuations and an AI bubble.
Editor's note: For the latest on the severe winter weather, click here.
An "intense" winter storm threatens to disrupt travel ahead of the New Year's holiday period, as forecasters warn of frigid Arctic air surging into the eastern two-thirds of the country — including Florida.
The big picture: The latest extreme weather to snarl U.S. holiday season travel after heavy snow and powerful winds pummeled the Midwest and Northeastern U.S. this week saw a bomb cyclone and trailing Arctic airmass trigger more heavy lake-effect snow and subfreezing temperatures in the Eastern U.S.
