Wall Street was poised for a subdued open on the last trading day of 2025, but approached a robust end to a roller-coaster year marked by uncertainty over President Donald Trump’s tariffs and unrivalled euphoria around AI.

The S&P 500 and the Dow are set to close their eighth consecutive month in the green, bolstered by an insatiable appetite for artificial intelligence stocks that pushed all three indexes to record highs this year.

Bellwether chipmaker Nvidia – up 40.6% so far this year – has been one of the beneficiaries, becoming the first publicly traded company to hit a $5 trillion market capitalization.

Communication services stocks on the S&P 500 are set to outperform this year, on the back of an over 65% jump in Alphabet, which is set for its best yearly performance since 2009.

The company has seen numerous catalysts this year in the form of AI deals, Berkshire Hathaway’s $4.9 billion stake and an antitrust ruling win against breaking up the Google parent.

But Wall Street’s yearly performance was on track to be lower than the rallies in the last two years as Trump’s “Liberation Day” tariffs sparked a meltdown in global markets in April, casting a cloud over the future of monetary policy in the world’s biggest economy and sending investors away from U.S. stocks earlier in the year.

Analysts expect growth to broaden across sectors in 2026, partially attributing it to Trump’s “One Big Beautiful Bill” passed by the U.S. government, which could accelerate corporate earnings.

“Describing 2025 as ‘resilient’ might be an understatement. The economy showed remarkable strength by overcoming higher inflation, a slowing labor market, fewer rate cuts than originally expected, and a sharp rise in the effective tariff rate,” said Adam Turnquist, Chief Technical Strategist for LPL Financial.

“Despite these challenges, growth remained steady without slipping into recession.”

Wall Street’s main indexes marked their third consecutive session in the red on Tuesday, at a time when investors eye the “Santa Claus rally”, a seasonal phenomenon where the S&P 500 typically posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac.

At 08:43 a.m. ET, Dow E-minis were down 18 points, or 0.04%, S&P 500 E-minis were down 2 points, or 0.03%, and Nasdaq 100 E-minis were down 7.5 points, or 0.03%.

The Federal Reserve’s interest rate trajectory will set the tone for global markets heading into 2026, after mild economic data this month and expectations of a new dovish Fed chair prompted investors to price in further reductions.

Minutes from its December meeting showed deep divisions among policymakers over the risks facing the U.S. economy.

Meanwhile, U.S. jobless claims unexpectedly fell last week to a one-month low, while the unemployment rate likely remained elevated in December amid sluggish hiring.

Among stocks, Nike gained 2.9% in premarket trading after CEO Elliott Hill bought its stock for about $1 million.

Vanda Pharmaceuticals jumped 19.5% after the U.S. Food and Drug Administration approved its drug for the prevention of motion-induced vomiting.

Trading is expected to be thin in the holiday-shortened week, as markets will be closed on Thursday.

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(Reporting by Purvi Agarwal and Nikhil Sharma in Bengaluru; Editing by Krishna Chandra Eluri)