Financial market development 2025 and outlook 2026

Between trade conflict and AI boom

The complete and detailed financial market report, including all graphics, can be downloaded at the end of this article.

2025 review: shock in spring, boom in autumn

The year 2025 was characterized by two opposing forces: geopolitical uncertainty and technological progress.

In spring, new US import tariffs shook the global trading system — the biggest trade policy change since the Second World War. International equity markets initially lost between 15% and 25%, but recovered by the middle of the year.

A strong upward movement followed in the second half of the year, driven by massive investments in artificial intelligence. Despite US tariffs on Swiss goods of up to 39%, the Swiss stock market performed better than the S&P 500 and MSCI World — mainly due to the weak US dollar.

The trade conflict

In April 2025, the US administration introduced base tariffs of 10% as well as additional country-specific “reciprocal” tariffs. The aim was to reduce the trade deficit and increase government revenue.

Switzerland was particularly affected as its trade surplus triggered high special tariffs. Following negotiations in November, a reduction to 15% was agreed, combined with investments by Swiss companies in the USA.

Higher tariffs make imports more expensive, slow growth and increase uncertainty. Nevertheless, according to the IMF, the global economy grew by around 3.2% as companies adjusted supply chains and financing conditions remained stable.

Do tariffs work as a growth strategy?

The idea: fewer imports should strengthen domestic production.

In reality, however, the export surplus depends on factors such as cost structure, product quality, and exchange rate. Since industries often require imported components, tariffs can even weaken their own competitiveness. Ultimately, all participating economies are affected — including those that collect tariffs.

Development of financial markets

After a weak start, markets stabilized over the course of the year. US technology stocks developed particularly strongly.

The so-called “Magnificent Seven” — Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla — now dominate over a third of the S&P 500, making Nvidia the largest company within this group.

Defensive heavyweights such as Nestlé, Roche and Novartis benefited particularly strongly in Switzerland. At the same time, the US dollar lost around 13% against the euro and franc, making international equities denominated in Swiss francs weaker.

The AI boom

The current AI boom is often compared to the dot-com bubble, but it is fundamentally different:

• Financing from profitable large corporations instead of start-ups
• Benefits for numerous industries
• real productivity gains instead of pure growth expectations

Swiss companies are also already using AI — for example in medical technology, infrastructure and data centers. This results in measurable increases in efficiency in the real economy.

Outlook 2026

The IMF expects global growth of around 3.1%.
The drivers are government investment, more stable world trade and increasing AI applications.

• Europe: Inflation falls towards 2%, hardly any interest rate cuts expected
• USA: higher inflation but possible interest rate cuts due to a weaker labor market

Companies are likely to achieve increasing profits, while the focus is increasingly shifting from AI producers to AI users.

risks

Important uncertainty factors remain:

• renewed escalation of the trade conflict
• rising inflation in the USA
• loss of trust in institutions
• geopolitical conflicts

Political influence on the US Federal Reserve could weigh on financial market stability in particular.

conclusion

The global economy is likely to continue to grow moderately.
Artificial intelligence is increasingly becoming the central driver of many industries.

Equities remain attractive, while bonds contribute to diversification, particularly during weaker growth phases. At the same time, politics remain a significant factor of volatility.

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