WSJ What's News – "Stock Markets Close Out a Record-Setting Year"

Date: December 31, 2025
Host: Luke Vargas
Guests/Contributors: David Uberty, Juan Ferrero, Dan Michael, Shaindy, Ling Lingwei, Deborah Ball

Main Theme

This episode provides a comprehensive wrap-up of 2025’s extraordinary developments in global stock markets, with sharp analysis on the drivers behind the year’s record performances, particularly the AI boom. The episode also turns its lens on the geopolitical and economic outlook for 2026, gathering insights from Wall Street Journal bureau chiefs around the world to forecast the major trends and risks likely to shape the year ahead.

Key Discussion Points & Insights

1. 2025’s Record-Setting Markets

Drivers of Growth:

• AI Boom and Tech Rally:
  • The US stock market, particularly the S&P 500, closed 2025 with an approximate 17% gain (00:49), despite early-year uncertainty linked to trade policy upheavals.
  • The AI sector was a core driver for investor optimism and capital inflows, epitomized by OpenAI’s staggering compensation of $1.5 million on average per employee in stock-based packages (02:04).

"Investors have poured money into US tech stocks and that has elevated markets to near record levels."
— Journal Reporter (01:30)

Global Market Performance Highlights:

• Asia:
  • Hong Kong’s Hang Seng: Best year since 2017
  • Shanghai Composite: +19%, strongest performance since pre-pandemic
  • Korea’s Kospi: Soared over 75%, not seen since 1999
• Europe:
  • Germany’s DAX: +23%, best since 2019
  • UK’s FTSE: +22%, strongest since 2009
• Commodities & Currency:
  • Gold and silver: Poised for largest annual gains since 1979
  • US Dollar: Set for a 6% decline, steepest since 2017

2. Major Political and Geopolitical Developments

US-China Trade and Power Relations:

• President Trump’s introduction of “Liberation Day” tariffs in April incited significant market turbulence before the AI rally reversed course (01:30).
• China’s drive for “peer equality” with the US and re-orientation of the global economic order were forecast as central themes for 2026 (00:36, 11:14).

"China now genuinely sees itself as an equal to the United States... they’re actively working to reengineer the global playing field."
— David Uberty (11:14)

AI Industry Impact on Employment:

• OpenAI not only drove stock market enthusiasm but also set new records for employee compensation (02:04).

3. Regional Spotlights & Predictions for 2026

Latin America: Swing to the Right & Resource Opening

• A trend toward centrist and right-leaning political victories is prompting expectations for greater cooperation with the US and resource sector openings—particularly lithium and copper in Chile and Bolivia (06:23).

"What we’ve seen across Latin America is the pendulum has started to swing toward the right... We could end up seeing conservatives win power in Peru and Colombia in 2026." — Juan Ferrero (06:23)

Europe: US Alliances and Ukraine Divide

• Growing division over the Ukraine war: The US wants a swift end; Europe seeks a resolution that doesn’t embolden Russia, revealing a widening transatlantic policy gap (07:47).

"The recent US national security strategy made clear that the US wants to end the war quickly, and Europe is not in a hurry to end the war if that means striking a deal that’s bad for Ukraine." — Dan Michael (07:47)

Middle East: Post-War Fragility & the Iran Question

• Fragile picture following major conflicts in Gaza and Iran, with doubts about prospects for peace and ongoing risks from unresolved power struggles (08:48).
• President Trump authorized bombings on Iranian nuclear facilities, weakening Iran but not eliminating its regional influence (09:54).

“The Middle East today is certainly a more peaceful place than it was a year ago, but it is by no means a place where there is peace.”
— Shaindy (09:54)

China’s Next Moves: Economic and Military Expansion

• Expect Beijing to aggressively assert economic influence via dominance in green technologies, critical minerals, and AI (11:14).
• “Factory floor” strategy shift: China’s leverage now extends to future-critical sectors, making Western supply chain realignment a serious challenge (12:02).
• Anticipation of more trade friction and tariffs as digital and physical Chinese goods flood global markets (13:05).

"The power of China’s industrial machine is so great that it’s very, very difficult to push back." — Deborah Ball (12:33)

“The sharpest point on that is around AI... Chinese models are going to be very, very competitive in a lot of countries. There’ll be cheaper models, open-source models... but what is embedded in those models, we don’t know yet.”
— Deborah Ball (13:15)

Memorable Quotes & Moments (with Timestamps)

• On the 2025 Market Rebound:

  “But since then, investors have come back to the market in a very big way. And that’s in large part because of this AI boom.”
  — Journal Reporter (01:30)

• On Latin America’s Political Shift:

  “Now you have Rodrigo Paz, he’s a centrist, but he has already said that he’s going to open up Bolivia to investors. Bolivia has the biggest deposits of lithium, which are crucial for electric vehicles...”
  — Juan Ferrero (06:23)

• On US-Europe Divide Over Ukraine:

  “European leaders feel that a bad deal for Ukraine is also a bad deal for Europe and puts Europe at a greater security risk because Russia would come out of it feeling emboldened.”
  — Dan Michael (07:47)

• On Middle East Prospects:

  “Unless Hamas disarms and gives up control, there really aren’t any clear pathways that I can see that makes things go smoothly.”
  — Shaindy (08:48)

• On China’s Assertive Ambitions:

  “China now genuinely sees itself as an equal to the United States, a true peer with the right to help define the global rules.”
  — David Uberty (11:14)

• On Global Supply Chain & China:

  “China’s counter move is to now dominate the next factory floor... green technologies, critical minerals and the AI components that future economic growth relies on.”
  — David Uberty (12:02)

Noteworthy Sections with Timestamps

• Opening Market Recap & Trade Policy Shifts: 00:49 – 02:04
• Global Stock and Commodity Performance: 02:04 – 03:45
• US Domestic Developments (Venezuela, Minnesota funding): 03:45 – 05:00
• 2026 Forecasts from Bureau Chiefs: 05:52 – 13:56
  • Latin America: 06:23 – 07:24
  • Europe/Ukraine: 07:24 – 08:42
  • Middle East: 08:42 – 10:52
  • China: 10:52 – 13:56

Conclusion

This episode skillfully distills the forces behind 2025’s market highs—most notably the AI wave—while offering a globe-spanning preview of the pressures, conflicts, and opportunities likely to dominate headlines in 2026. From shifts in LatAm politics and US-Europe divides to the rise of China’s industrial and AI ambitions, it’s a snapshot of a world standing at multiple crossroads.