2025 US Stock Fence Reshaping: From Towering Walls to Order Fragmentation

2025 has become history. This year, the global financial markets experienced not just a simple rise or pullback, but a watershed moment marked by a fierce collision between the old and new orders. Market participants have discovered that the previously stable trading fences are collapsing, while new high walls are rising one after another along the borders of geopolitical conflicts and industrial competition. This contradictory duality has profoundly shaped the underlying logic behind all market trends this year.

Looking back over these 360 days, the US stock market demonstrated textbook-level resilience—Nasdaq 100 rose 21.2% for the year, S&P 500 increased 16.9%. Even after multiple stress tests, it remains anchored as the global risk asset benchmark. But to understand the true source of this resilience, one must first deconstruct the opposing landscapes of fence collapse and high wall erection.

Power Reshuffle and Deregulation Frenzy

On January 20, 2025, with the inauguration of the new US government, the right-wing Silicon Valley and the new crypto elites completed a rare convergence of power. This convergence directly shaped a series of disruptive personnel arrangements and regulatory attitude shifts.

Elon Musk’s Department of Efficiency (D.O.E) undertook sweeping reforms of the long-standing regulatory system, especially in AI-related fields, pushing for the repeal or merger of the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) regarding AI oversight. This move directly broke the traditional bureaucratic intervention paths over technological boundaries.

More critically, there was a “reversal” for the crypto industry—after Gary Gensler stepped down as SEC Chair, the long-standing “law enforcement-style regulation” over the crypto market began to loosen. The new SEC Chair, Paul Atkins, quickly issued a statement on the securities issuance and registration of crypto assets, shifting regulatory logic from enforcement to rule-making. Several pending cases involving Coinbase, Ripple, and others were gradually dismissed or downgraded.

The new leadership’s deep ties to tech and crypto capital mean that from the core presidential staff to cabinet officials, a group of decision-makers embracing AI, Silicon Valley’s tech right, and even crypto are systematically entering the centers of power. Washington’s attitude toward AI has also undergone a fundamental shift—from policies like “Eliminating US AI Leadership Barriers” to the “AI Guardrails Act,” shifting the narrative from “risk prevention” to “ensuring absolute leadership.”

This convergence of power is essentially a phase celebration of “technological freedom, capital efficiency, and deregulation.” But the stability of this narrative warrants caution, as liberalization and deregulation will inevitably strengthen the advantages of tech giants, making AI and crypto more efficient at concentrating wealth and accelerating the widening wealth gap. As the political cycle from 2025 to 2029 advances, election pressures and macro constraints will gradually return to policy core, and the seemingly solid capital alliances may very well fracture.

AI Arms Race: CapEx Becomes the New Moat

If the AI competition focus in 2023-2024 was still on model parameters, 2025 marks a year where the competition enters deep waters—the definition of AI’s moat is being redefined. It is no longer just about breakthroughs in models, but about who can sustain CapEx pressures over sufficiently long time horizons.

At the start of the year, DeepSeek-R1 challenged the global AI market’s pricing logic with a low-cost, high-efficiency open-source approach. It first shook the long-standing Silicon Valley myth of “stacked computing power,” sparking a global debate on whether such expensive compute is truly necessary. Nvidia’s stock plummeted 18% in a single day, and the “small model + engineering optimization” approach re-entered mainstream consciousness.

Paradoxically, although DeepSeek’s efficiency revolution is called the “Sputnik moment” for AI, the game among leading players has ultimately shifted AI competition from model architecture to power, infrastructure, and sustained cash flow. Giants like OpenAI, Meta, and Google are almost simultaneously ramping up military-style arms races, continuously revising CapEx expectations. Market forecasts suggest that from 2025 to 2030, the total CapEx of these giants could reach $2-3 trillion.

AI competition remains a marathon with no visible end; the real moat depends not on the intelligence of the models themselves, but on who can bear higher capital expenditure intensities. A high wall built jointly by capital, energy, and time is slowly closing at the entrance to the AI world.

Entering Q4, the market’s pricing logic for AI began to show subtle shifts. After earnings reports from Oracle and Broadcom, their stock prices retreated sharply—not because AI revenues slowed, but because the market re-evaluated a key question: with CapEx already fully front-loaded, is future growth still certain? In contrast, Micron Technology was re-priced within the same window due to improved visibility of HBM orders and prices. The market shifted from indiscriminate reward for AI relevance to distinguishing who is burning CapEx and who is harvesting CapEx. This marks a new phase where AI investment paradigms move from infrastructure arms race to cash flow and return rate audits.

How Tariff Storm Reshapes Global Pricing

In 2025, tariffs are no longer just macroeconomic variables but have officially become the “number one killer” of US stock market risk appetite.

On April 2, Trump signed an executive order imposing a 10% baseline tariff on all imports into the US and implementing targeted “reciprocal tariffs” on countries with large trade deficits. This policy instantly triggered the most intense structural shock to global financial markets since the pandemic in 2020. The consecutive declines on April 3-4 became one of the most representative “stress tests” in recent years, with major US indices experiencing their largest drops since 2020, wiping out about $6.5 trillion in market value. The Nasdaq Composite and Russell 2000 even entered technical bear markets.

From a higher dimension, this tariff storm’s essence is not just a short-term fluctuation in trade policy but the final counterattack of the old trade order under the new industrial structure. As AI, semiconductors, energy, and security become highly intertwined, trade is no longer just about efficiency but has become a battlefield for national security, industrial control, and technological sovereignty.

Tariffs are being re-priced; they are no longer merely cyclical policy tools but are viewed as structural friction costs in the process of geopolitical order reorganization. This change signifies that global capital markets have officially entered a new stage, where future corporate profits must include an additional high-cost “geopolitical security cost.”

Resilience of US Stocks: The Fishing Pond for Absorbing Risks

Meanwhile, if the tariff storm in April was an extreme stress test, the subsequent market performance tested the true quality of US stocks—sharp declines but equally rapid recoveries. Capital did not leave for long but quickly flowed back into core markets after brief deleveraging.

This textbook resilience is reflected not only in the speed of price recovery but also in the position of US stocks as the ultimate safe haven for global liquidity. In an environment of rising global uncertainty, US stocks remain the most willing destination for capital to “return.”

On February 19, the S&P 500 hit a record high. Despite subsequent doubts about AI bubble risks and tariff shocks, the index did not trend toward a structural breakdown but continued to undergo structural reassessment amid volatility. By the end of 2025, Nasdaq 100 rose 21.2% for the year, maintaining its growth narrative; S&P 500 increased 16.9%, steadily refreshing its range amid high-frequency battles; Dow Jones and Russell 2000 rose 14.5% and 11.8%, completing the structural puzzle from “value return” to “small and mid-cap recovery.”

Gold and silver performed even more brilliantly in 2025, but the value of US stocks lies not in the fastest run but in their irreplaceable structural profit-generating effect—they are both a deep harbor amid complex geopolitical games and a certainty that global capital repeatedly anchors in high-volatility environments.

Deepening Power Chain of Compute Power

On October 29, the global capital market witnessed a historic moment: Nvidia’s market cap surpassed $5 trillion, becoming the first company in history to reach this milestone, exceeding the total market cap of several developed countries’ stock markets such as Germany, France, the UK, Canada, and South Korea. More symbolically, its nonlinear acceleration trajectory from $3 trillion to $4 trillion took 410 days, while from $4 trillion to $5 trillion only 113 days.

Nvidia’s significance has long gone beyond individual growth stories. With GPU and CUDA ecosystem tightly bound, it commands 80%-90% of the AI chip market share. But the market is increasingly aware that the limits of compute power are hitting the physical boundaries. The bottleneck is no longer just in GPUs but propagates down the supply chain: compute → memory → power → energy → infrastructure.

This chain of transmission has directly triggered a wave of capital linkage across multiple sub-sectors. Memory and storage were first ignited; as AI training and inference scale expanded, the bottleneck shifted from GPUs to HBM and storage systems themselves. HBM remains in persistent shortage, and NAND flash prices entered a new upward cycle, with Micron, Western Digital, and Seagate rising 48%-68% over the year.

The massive power demand of data centers—“electricity-consuming beasts”—has made companies with nuclear assets and independent grids key players in the AI era. Several energy and utility companies once seen as defensive assets have now shown tech-stock-like trajectories: Vistra up 105%, Constellation up 78%, GE Vernova up 62%.

This spillover even extends to what were once considered old-cycle assets—Bitcoin miners. As AI’s demand for electricity displaces and redistributes power resources, miners like IREN, Cipher Mining, Riot Platforms, Core Scientific, Marathon Digital, Hut 8, CleanSpark, Bitdeer, Hive Digital are being revalued within a new “compute-energy” framework.

Exploring National Capitalism and Systemic Risks

In 2025, the US experienced an unprecedented 43-day government shutdown. Flight delays, relief program interruptions, public service halts, and hundreds of thousands of federal employees on unpaid leave. This deadlock’s impact on livelihoods and economic operations penetrated every fiber of American society.

More concerning than economic losses is the shift in systemic signals. Political uncertainty is transforming from predictable events into sources of systemic risk. In traditional finance, risks can be priced, hedged, and deferred; but when the system itself frequently fails, market options sharply contract.

In this highly polarized political environment, the new US government’s economic governance logic has begun to show distinct features: the national will no longer relies solely on subsidies and tax incentives but opts for direct intervention in capital structures. Unlike past industrial policies centered on subsidies, tax benefits, and government procurement, 2025 has seen a more controversial and symbolic shift: from “allocating funds and subsidies” to “direct equity participation.”

The Intel agreement marked the first shot, with the US government acquiring a 10% stake in Intel, signaling that the federal government is beginning to act as a long-term shareholder in key strategic industries. It not only intervened in industrial policy but further involved itself in the capital structure itself. This resource allocation driven by national will, once criticized in Western discourse for China’s solar, new energy, and other industry policies, now backfires—bypassing much of the globe and hitting the US itself.

Divergence and Reconfiguration of Global Liquidity

Beyond industrial policies, the monetary policy changes in 2025 further exposed the shrinking of macro control space. The Fed officially restarted its rate-cutting cycle in September, with cuts of 25 basis points in October and December, totaling 75 basis points for the year.

But market understanding of this rate-cutting cycle has already changed. It’s clear that this is not the start of a loosening cycle but more like a “painkiller” to pressure the economy and politics. This explains why multiple rate cuts did not eliminate uncertainty; US stocks did not experience indiscriminate liquidity frenzy but further differentiated structurally.

The room for monetary policy to maneuver is becoming increasingly limited, especially under constraints of high debt, large fiscal deficits, and structural inflation. The Fed finds it difficult to support markets through large-scale easing as in the past. Each rate cut now resembles a “poisonous cure” rather than a driver of new growth.

In contrast, the Bank of Japan is steadfastly advancing monetary normalization. On December 19, Japan’s central bank announced a 25 basis point rate hike, raising the policy rate to 0.75%, the highest since 1995. It is also the fourth rate increase since ending its eight-year negative interest rate policy.

Between one cut and one hike, the divergence in global monetary policies has been thrust into the spotlight, sharply squeezing the years-long yen arbitrage space. Markets must reassess cross-currency and cross-market risk structures. Monetary policy has gradually lost its “magic wand” aura; interest rates are no longer the universal lever for economic adjustment but more like painkillers to prevent systemic acute collapses. Japan is becoming the “last fortress” of global liquidity tightening, which could very well become the most ferocious risk source in 2026.

The Collapse of Financial Fences

If any change in 2025 is most easily underestimated yet most likely to trigger long-term chain reactions, it is not a single star stock or sector, but the very trading system itself.

Wall Street has officially decided at the systemic level to proactively dismantle fences, moving toward tokenization and 24/7 liquidity. The recent intensive moves by Nasdaq form a strategic puzzle—an intricate, step-by-step plan aimed at enabling stocks to eventually circulate, settle, and price like tokens.

In May 2024, US stock settlement was shortened from T+2 to T+1; early 2025, Nasdaq began signaling intentions for “around-the-clock trading,” planning to launch five-day continuous trading in late 2026; subsequently, Nasdaq integrated the Calypso system with blockchain technology to enable 24/7 automated margin and collateral management.

By the second half of the year, Nasdaq’s push on institutional and regulatory fronts was clear. In September, it formally submitted a tokenized stock trading application to the SEC; in November, it explicitly prioritized tokenizing US stocks as a core strategy. In December, it applied for a 5×23-hour trading system. SEC Chair Paul Atkins stated in an interview that tokenization is the future of capital markets; by bringing securities onto the blockchain, clearer ownership rights can be achieved, and it is expected that “within about two years, all US markets will migrate to on-chain operations with on-chain settlement.”

From yellowed paper certificates to the electronic SWIFT system in 1977, and now to atomic settlement via blockchain, the evolution of financial infrastructure is re-enacting and even surpassing the speed of the internet. For Nasdaq, this is a high-stakes gamble of “self-revolution or revolution.” For the crypto industry and new RWA players, it is not only a brutal reshuffle of winners and losers but also a historic opportunity comparable to betting on the next Amazon or Nvidia in the 1990s. The fences of finance are collapsing; a new era of infrastructure is beginning.

Agent Wave: Direction Setting Rather Than Application Explosion

The most frequently heard but seemingly always slightly missing term in 2025 is undoubtedly “AI Agent Year.” One word describes this year’s AI Agent market: “like an explosion.”

A clear consensus has formed: AI is transforming from a passive response dialog into an autonomous agent capable of calling APIs, handling complex task flows, executing across systems, and even participating in physical-world decision-making. Early Manus’ breakout set off the first shot; subsequently, products like Lovart, Fellou, and others emerged one after another, creating an illusion that “application layer is about to explode.”

But truthfully, while the direction of Agent has been validated, large-scale deployment has not yet been achieved. Early breakout products quickly faced declining user activity and usage frequency. They proved “what Agents can do” but have yet to answer “why to use them long-term.” This is not a failure but a necessary phase in the diffusion cycle of technology.

Whether it’s OpenAI’s CUA (Computer-Using Agent) or Anthropic’s MCP (Model Context Protocol), they point not to a specific application but to a longer-term judgment—over the next two years, AI’s capability curve will be extremely steep, but true value release depends on system-level integration rather than single-point functional innovation.

Following the diffusion pattern of innovative technologies, moving from “Year One” to large-scale implementation takes at least three years. So, 2025 is merely about completing the initial consensus shift from 0 to 1. Toward the end of the year, ByteDance’s exploration of AI terminal forms pulls Agent back from software capabilities to the core issue of hardware entry points and scene binding. This may not mean AI phones will succeed immediately, but it again reminds the market: the ultimate goal of Agents may not be a single app but becoming an active participant within the system.

Conclusion: Repricing the Order in 2026

2025 is not a year for providing answers but a year of collective turning points. Looking back, the global capital markets seem to be trapped in a maze built of paradoxes.

On one side, high walls continue to rise: escalating global trade frictions, tariff barriers re-emerging, increasing political polarization, clouds of government shutdown, and great power games shifting from behind the scenes to the front stage. On the other side, fences are collapsing: regulatory attitudes toward new technologies are shifting dramatically, financial infrastructure is accelerating and upgrading, and Wall Street is reshaping trading and asset forms with a more open approach.

This extremely absurd and contradictory landscape is essentially a result of politics and geopolitical structures continuously erecting new boundaries, while Washington and Wall Street are attempting to dismantle the old fences of finance and technology. When gold, silver, and other precious metals lead the major asset rally, the market should realize a stark reality: the “great upheaval” is not just a prophecy.

AI’s capital expenditure games often reaching hundreds of billions of dollars are inherently unsustainable, and the geopolitical struggles overshadowing global capital markets are pushing us toward the “Minsky Moment” warned years ago—an over-expansion collapse point.

The core task for 2026 is not “what will happen,” but that the market no longer allows participants to pretend nothing will happen. The new fences and the old high walls will inevitably reach a new equilibrium at some point, and this equilibrium will be the order anchor that 2026 most urgently needs to find.

The structural contradictions once masked by market euphoria are gradually surfacing, and the pricing errors once hidden by liquidity may be waiting for a new clearing moment. The prelude of 2025 has already closed; the real grand drama of 2026 is just beginning.