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SEI Forward: Fourth quarter 2025

January 8, 2026
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Market review. 

Equity markets capped off a stellar year with a positive fourth quarter. Earnings continued to broaden, monetary policy continued to ease, and artificial intelligence (AI) hyperscalers continued to spend. Heightened volatility was also a theme to close out the year as data-center debt financing raised AI bubble concerns, and the U.S.government shutdown left both policymakers and investors a bit in the dark on the state of the U.S. economy.

Data issues notwithstanding, the U.S. Federal Reserve (Fed) delivered two interestrate cuts during the quarter as the central bank focused on a softening labor market despite inflation remaining well above target.

U.S. and global yields broadly followed a similar pattern of lower short-term yields (on easing monetary policy) and flat-to-higher longer-term yields (due to lingering debt concerns). Credit reflected the risk rally with spread levels near all-time tight levels, but attractive absolute yields. Meanwhile, commodities were a mixed bag of supplyand demand imbalances as crude oil sold off while precious metals enjoyed a strong rally. Finally, the U.S. dollar ended the year mostly weaker as rate cuts weighed on the greenback. 

jim_smigiel

Chief Investment Officer, Investment Management Unit

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Important information

Index returns are for illustrative purposes only and do not represent actual investment performance. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged, and one cannot invest directly in an index. Past performance does not guarantee future results. Diversification may not protect against market risk.