Economic review

Fourth quarter 2025: Stocks continue to rally in the fourth quarter of 2025

The last quarter of 2025 was positive, especially for funds that invest in stocks. For funds investing in bonds, the picture was mixed. Short-term bonds made gains, but bond funds as a whole declined in value.

European equities performed particularly well in the fourth quarter. Prices of goods and services in Europe are becoming more stable, and companies providing services in areas such as care, transport, retail, IT and financial services are getting more work.

Europe also benefited from Trump’s import duties (additional tax on imported products) as some US companies bought less from China and increasingly turned to European suppliers.

Bonds generally declined in value. French government bonds in particular had an extraordinary quarter as France’s credit rating was reduced, due to the lack as yet of a concrete plan to bring its national debt under control. Investors saw the downgrade as an increase in risk and demanded a higher yield for loans to France, which accordingly had to pay a higher interest to borrow money. Despite the downgrade, France’s credit rating is still good.