If we were to make a movie about the evolution of the stock market, retail traders would be that seemingly random sideplot that all of a sudden becomes the climactic focal point.

Back when the GameStop fervor first emerged years ago, retail traders were the enemy of Wall Street, thwarting their positions with Reddit-fueled short squeezes. But now, the script has flipped: Instead of trying to lock hyper-online crypto devotees out of mainstream financial markets, many Wall Street firms are trying to woo them.

What inspired that change of heart? Money, of course. Today, retail traders are more active in the US stock market than mutual funds and traditional non-quant hedge funds combined, while their trading ecosystem represents over 20% of the entire market’s volume, according to Jefferies.

Retail traders have certainly flexed their collective power this year, re-emerging as a force to be reckoned with, fueled by the bull market. But this time around, they had a slew of tools at their disposal to become even more degenerate: Leveraged single-stock exchange-traded funds, one-day options, and a bevy of crypto products.

That’s how they were able to introduce a whole new level of volatility for companies like Opendoor, which has surged 264.37% this year so far.

If you can’t beat ’em…

It’s not just new funds that offer retail traders riskier strategies. Some companies are now hoping they can become the next retail fad, and are marketing specifically to the retail community.

Just look at crypto firm Bullish, which went public in August. In its initial public offering, Bullish gave retail investors direct access to the IPO through brokerages like SoFi and Robinhood, an early-access perk that’s usually only given to well-connected investors.

The strategy seemed to have worked: Bullish raised roughly $1.1 billion, and its opening price was around double its IPO price.

Now retail traders aren’t just getting a seat at the table—they’re dictating the whole menu.—LB

It ain’t over until it’s over, but at this point, we can probably call it: the final day of trading in 2025 has concluded, and it’s time to check the scorecard.

It was a wild year filled with growing trepidation about the state of the AI trade, but that didn’t prevent the Communication Services sector from once again dominating the rest of the S&P 500, with a year-to-date gain of 34.1%. The Information Technology sector also returned 25.11%, while the Industrials sector rounded out the top three with a 20.45% gain. Meanwhile, consumer trepidation in the face of sudden tariffs kept Consumer Discretionary to a mere 6.9% return, and Consumer Staples gained just 4.45%. But the laggard of the index was Real Estate, with just a 4.08% gain in 2025.

The best-performing stock in the S&P 500 this year was Sandisk, rising a stunning 577.07% thanks to the market’s insatiable appetite for data storage. All those chatbots need plenty of data for training, and all those data centers being built around the country need somewhere to store all those 1s and 0s, which helped propel Sandisk to new heights in 2025.

It should come as no surprise, then, that second place belonged to fellow data storage heavyweight Western Digital, Sandisk’s former parent company, which surged 282.21% in 2025. Third place was claimed by Micron Technology, a key player in the semiconductor industry, up 239.11% YTD. But the fourth-place finisher was—you guessed it, another data storage company—Seagate Technology, which rose 219.07%.

As for the worst-performer on the S&P 500, that inglorious award belonged to The Trade Desk. The digital marketing company tumbled 67.7% thanks to rising competition in the digital advertising industry, particularly from Alphabet and Amazon, which convinced several Wall Street analysts to lower their price targets for the stock over the course of the year.

Will The Trade Desk manage to recover next year? Can data storage companies keep their lead in 2026? Stay tuned for another exciting year of market mayhem.—MR

This year, Washington’s hand was everywhere in the markets, and nowhere was its grip tighter than in the red-hot AI trade.

In April, the Trump administration tightened Biden-era semiconductor export controls, blocking Nvidia from shipping several AI chips without a license. Then in July, the administration reversed its own ban on Nvidia’s H20 chips, after which Nvidia agreed to give the US government 15% of its China revenue in exchange for approval.

Earlier this month, the pattern escalated: Washington cleared Nvidia to sell its more powerful H200 chips to China, this time for a 25% revenue cut.

Policy or power play?

Economists say this is the most aggressive federal intrusion into the US economy since the 2009 bank-and-auto bailouts. Rather than leaving the semiconductor sector to its usual technical and strategic planning, the White House has inserted itself as the arbiter of what companies can build, sell, or invest in.

The administration has repeatedly used leverage to steer corporate decisions: threatening to revoke federal grants, brandishing steep tariffs on chips made abroad, and—in the case of Intel—even pressuring a board of directors to remove its CEO.

Direct government involvement like this is unusual, but investors should prepare their portfolios for more of the same next year, even beyond the AI trade. After all, plenty of President Trump’s policies will be coming home to roost in 2026: Analysts expect the full effect of tariffs to hit the US economy next year, new regulations from the One Big Beautiful Bill Act will kick in, and of course, Fed Chair Jerome Powell is up for replacement.

The White House made its presence felt in markets this year, and that’s not going to change anytime soon.—SY