In 2025, the global capital markets underwent profound structural adjustments, driven by the continued high-interest-rate environment, the accelerated divergence within the tech industry, and recurring geopolitical risks. Unlike the market trends of previous years, which were dominated by liquidity and sentiment, there was a clear shift towards focusing on profitability, cash flow, and risk pricing mechanisms. Several key data points clearly outline the core trends of this year.

Normalization of High-Interest Rates and the Downward Shift in Global Valuation Levels

In 2025, the Federal Reserve maintained its policy interest rate around 5%, with most developed economies seeing positive real interest rates. This environment significantly increased corporate financing costs and altered the valuation logic in the capital markets. Data show that the overall price-to-earnings (P/E) ratio of major U.S. stock indices fell by about 15%–20% from the previous cycle's high, with growth stocks, which had been highly valued, undergoing more significant corrections. A market consensus gradually formed: in the context of high interest rates, the ability to deliver profits held more pricing power than growth expectations.

AI Investment Cools but Does Not Fade, with Earnings Becoming the Key Filter

Artificial intelligence remained one of the most discussed investment themes in 2025, but market sentiment became more rational. Unlike the earlier “concept-driven” investments, investors began focusing on orders, revenues, and profits as core criteria. Financial reports showed that some leading companies in computing power and chip-related businesses achieved year-on-year revenue growth of over 30% in 2025, while AI concept stocks lacking clear business models saw their share prices decouple from broader indices. The “stronger become stronger” dynamic within the tech sector became even more pronounced.

Geopolitical Tensions and Energy Price Volatility, with Oil Prices as a Key Variable

In 2025, multiple geopolitical events caused repeated shocks to the energy market, resulting in a noticeable increase in oil price volatility. Throughout the year, Brent crude oil prices largely hovered between $70 and $90 per barrel, with volatility significantly higher than the previous year.

Fluctuations in oil prices not only affected the energy sector but also, through transportation costs, corporate profit margins, and inflation expectations, impacted broader asset prices, becoming a crucial variable influencing global market risk appetites.

Divergence in Capital Flows, Emerging Markets No Longer Moving in Sync

Against the backdrop of high interest rates and a strengthening U.S. dollar, global capital flows in 2025 exhibited clear divergence. Data revealed that some emerging markets experienced net capital outflows amounting to billions of dollars, while markets with strong fundamentals and clear industrial upgrades were relatively resilient.

At the same time, the attractiveness of U.S. dollar-denominated assets increased, with U.S. Treasury bonds becoming a key risk-hedging choice during certain periods, leading to both enhanced interconnectivity and divergence among global assets.

Shift Toward Defensive Investment Styles, with Greater Emphasis on Certainty

In 2025, overall market risk appetite became more cautious. The proportion of high-dividend assets and industries with stable cash flows significantly increased, and in certain markets, high-dividend sectors outperformed the broader market index.

This shift reflects investors’ preference for stable returns to hedge against market volatility in a rising uncertainty environment. Market pricing gradually transitioned from being sentiment-driven to being driven by mechanisms, with an emphasis on aligning macroeconomic conditions, industry cycles, and company fundamentals.