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The price of bitcoin soared above $126,000, a record, this year, but those gains evaporated.

Key Takeaways

• Retail crypto's mood is "extraordinarily negative," but institutional investors are "unremittingly bullish," according to Bitwise Asset Mangement's Matt Hougan.
• Amberdata's Greg Magadini expects interest in bitcoin as a "debasement hedge" to pick up next year.

The rise and subsequent retreat of bitcoin perfectly encapsulates the crypto industry's year. It won big—but it doesn't have much to show for it yet.

The price of bitcoin, the world's most well-known cryptocurrency, soared above $126,000, a record, but those gains evaporated and it's poised to finish down for 2025. The industry welcomed the passage of stablecoin legislation, eased regulation, and the proliferation of new ways to buy in, but by many measures it has yet to reap the benefits. Despite all this, plenty of reasons for optimism regarding the both sector and the currencies themselves remain.

Next year could be when the effects of institutional buy-in and regulatory shift will start to show, crypto watchers say. Bitcoin (BTCUSD) could break out of its rut to book new highs, experts say, while altcoins could get a regulatory boost. And interest in "tokens"—the digital representation of assets like the dollar or stocks—could take off, further extending the investing world into digital space.

"If you talk to retail crypto, the vibe is extraordinarily negative. They look at their world, which extends out a few weeks in time, and see dark clouds—and so they're selling," Matt Hougan, CIO of Bitwise Asset Management told Investopedia. "And then if you talk to institutional investors, they're just unremittingly bullish."

Why This Matters to Crypto Investors

The crypto industry has said that regulation was holding back its potential and that it would upend and replace the existing financial system. Now that a crypto-friendly administration has paved the way, investors are waiting for some of those promised developments to be realized.

Bitcoin's supporters see reasons for optimism in the broader outlook for markets in 2026. The prospect of lower interest rates is generally beneficial to risk assets and could both fuel retail appetite for and institutional investor interest in crypto.

The coming wave of capital implied by major financial institutions like Morgan Stanley and Merrill Lynch offering access to crypto ETFs to their clients, and big university endowments like those of Harvard and Brown buying in, could also lift bitcoin next year, Hougan said.

He expects institutional demand to outpace new supply in the years to come. Since crypto ETFs launched in 2024, they have bought more than 700,000 bitcoin, roughly twice the number of new coins produced by the Bitcoin network over the same period, according to a Bitwise report.

The so-called debasement trade—in which investors seek hedges, such as crypto or other assets, against high government debt and a declining dollar—may also come back into play, drawing investor interest next year. "For individuals investing against or hedging their debasement risk, bitcoin makes a lot of sense," Amberdata's director of derivatives Greg Magadini said.

Bitcoin's permabulls broadly expect prices to continue to go higher—if not next year, then by the end of the decade. Standard Chartered, for example, sees it hitting $500,000 by 2030. The nearer term outlook for the cryptocurrency, however, is muddier.

Galaxy Digital, a financial services firm focused on digital assets, in its 2026 outlook said bitcoin will hit $250,000 by the end of 2027 but called next year "too chaotic to predict." (That generally tracks with the outlooks of some stock-focused analysts, who think the S&P could rise next year but perhaps not smoothly.)

Enthusiasm for crypto has led related businesses to stock exchanges amid a revival in initial public offerings. Their collective performance was mixed: Stablecoin issuer Circle (CRCL) hit it big and retained some of its early-won gains, as did Bullish (BLSH). But shares of Winklevoss twins-founded crypto platform Gemini (GEMI) have fallen substantially below their IPO price. (A few well-known firms are eyeing a debut next year.) Strategy (MSTR), the software company that put itself on the map by stockpiling bitcoin, tumbled more than 45% year-to-date.

The passage of the CLARITY Act, which provides a framework for regulating crypto in the same way the GENIUS Act did for stablecoins, could also support crypto. David Sacks, the White House's adviser on crypto and artificial intelligence, has said "we are closer than ever" to passing the bill.

If the bill is signed into law, the outlook for crypto would improve, Hougan said, because it would enshrine the Commodity Futures Trading Commission, rather than the Securities and Exchange Commission, as crypto's oversight agency, considered the industry's preferred outcome. If it doesn't, a less crypto-friendly future administration might take a different approach.

The CLARITY Act would set a more solid regulatory foundation for the industry to operate, according to Hougan, and potentially invigorate demand for altcoins like ether and sol. "It's the biggest risk to crypto right now," he said. "People are pricing in a higher probability that market structure legislation won't get passed."

Tokens tied to real-world assets, like stablecoins or ones linked to stocks, could also fire up interest in crypto next year, with some crypto experts saying they can can improve the functioning of the financial system. Circle in 2025 saw its USDC stablecoin expand its reach, with its circulating supply jumping more than 50%, according to analytics firm rwa.xyz.

SEC Chair Paul Atkins recently predicted that tokenization could transform the financial market sooner rather than later. "It's the way the world will be...maybe not even in 10 years, maybe even a lot less time, maybe a couple of years from now," Atkins told Fox Business.

The tokenization of stocks, an opportunity potentially measured in the trillions of dollars, is being tackled by crypto players and at least one of the financial industry's juggernauts. Coinbase Global (COIN), the largest U.S. crypto exchange, which recently unveiled its own token platform (as well as stock trading), and BlackRock (BLK), the world's largest asset manager, have both made tokenization a strategic priority.

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The S&P 500 is on track to post a third straight year of double-digit gains in 2025.

Key Takeaways

• Most experts expect another year of gains for the stock market in 2026. But they also say volatility could remain elevated as concerns about the AI rally persist.
• A resilient U.S. economy, as well as accommodative fiscal and monetary policy, are expected to support corporate profit growth.
• A softening labor market poses risk to the economy, but should also encourage more interest rate cuts from the Federal Reserve.

It was a rollercoaster of a year on Wall Street. Most experts think the ride isn't over.

The S&P 500 is on track to post its third consecutive year of double-digit gains, putting the benchmark index up more than 90% since the current bull market started in October 2022. Strategists expect 2026 to be another good—if more modestly so—year for the stock market.

As of mid-December, the average 2026 year-end S&P 500 price target was 7,269, according to an LPL Financial analysis. That implies about 5% upside from Tuesday's record-high close.

“We expect a continuation of the recent past, where returns are solid, driven by rising earnings growth,” wrote Vanguard analysts in the firm’s 2026 outlook. “But let us be clear: Risks are growing,” especially in the tech sector, they wrote. 

Why This Matters to Investors

Signs of caution have crept into Wall Street's stock-market forecasts for 2026. That's perhaps natural as the yearslong bull market has continued to run—but it may pay for investors to look under the hood at their reasoning, which includes concerns about the AI trade and the health of the U.S. economy.

Investors “need to remain prepared for periodic episodes of market volatility,” says LPL Financial CIO Mark Zabicki. Sudden shifts in government policy and high levels of stock market concentration made this year an especially volatile one, and Zabicki expects that trend to continue. 

Here are the major debates that are likely to dominate Wall Street in 2026.

Can the AI Rally Last?

A debate is humming on Wall Street about whether the artificial intelligence business is in a bubble characterized by unreasonably high stock valuations and seemingly unbridled infrastructure investments that may not pay off. 

According to Bank of America, this year’s tech IPOs posted their best first-week performances since the Dotcom Bubble of the 1990s, to which today’s market is frequently compared. Investors, they wrote, are also “exhibiting a historically strong buy-the-dip response,” a possible sign that FOMO is winning out over prudence.

On the flip side, the companies making the largest AI investments have more robust earnings and cash flows than their equivalents in the 1990s, which bulls say makes the AI boom more resilient to economic shocks.

AI may be a revolutionary technology, but “the rules of economics and finance still apply,” wrote analysts at Lazard Asset Management. Lenders—who became a more important part of the AI story this year—need to be repaid, and investors want returns on their investments. “In many cases, the AI trade increasingly appears unlikely to deliver on these demands,” according to Lazard. 

The hyperscalers—Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Meta (META), and Oracle (ORCL)—are expected to log combined capital expenditures of more than $500 billion next year, with AI infrastructure accounting for the majority of spending.

“The amount of revenue you're gonna have to generate incrementally to justify this capex is gonna be huge,” said Peter Berezin, Chief Global Strategist at BCA Research. He expects either Wall Street or the hyperscalers to realize next year that “these numbers are not sustainable. They're gonna come down.”

Others see more room for the rally to run. “I think we are closer to 1998 than 2000,” said Chris Buchbinder, equity portfolio manager at Capital Group, who notes big tech’s earnings are keeping pace with their stock prices, unlike in the late '90s. 

Profit Growth To Remain Strong and Broaden

Analysts expect corporate profit growth to accelerate next year, driven by a resilient U.S. economy, supportive policy, and AI spending. 

The S&P 500 is expected to grow earnings 15% next year, up from a little over 12% this year and well above the 10-year average of 8.6%, according to FactSet Research. The tech sector is likely to grow the fastest thanks to booming demand for AI chips, but the gap between big tech and the rest of the market is expected to narrow. 

LPL Financial forecasts the Magnificent Seven’s year-over-year earnings growth will hold steady between the mid-teens and low-twenties throughout the year, while the rest of the S&P 500’s growth accelerates into the mid-teens by the fourth quarter.

Strong profits outside of the tech sector could take some wind out of the AI rally’s sails. “More compelling investment opportunities are emerging elsewhere even for those investors most bullish on AI’s prospects,” wrote Vanguard. 

Higher expectations can be a double-edged sword, as AI beneficiaries like Nvidia and Broadcom (AVGO) learned in the past month. U.S. stocks are expensive by historical standards, with the S&P 500 trading near its highest forward price-to-earnings ratio of the last 10 years. 

“The optimism priced into markets doesn’t leave a lot of room for disappointment,” said Capital Group economist Darrell Spence.

Can Tax Bill and Rate Cuts Offset Rising Unemployment and Trade Concerns?

The U.S. economy is expected to get a boost next year from the combination of this summer’s One Big, Beautiful Bill Act, or OBBBA, and easing monetary policy.

OBBBA, the tax and spending bill signed into law by President Donald Trump in July, is expected to boost economic growth next year, especially in the first half when taxpayers receive an extra $100 billion in refunds, according to a Goldman Sachs estimate. Changes to corporate taxes and infrastructure depreciation should also boost some business spending. 

Simultaneously, the Federal Reserve is expected to continue lowering interest rates to support a labor market that appears increasingly imperiled. The unemployment rate, which has been inching higher for months, rose to its highest level since 2021 in November. The argument for more cuts was bolstered this month by a surprisingly tame inflation report.

“We are seeing what is an undeniable uptrend in the unemployment rate in the United States,” said BCA Research analysts, who identified the weakening jobs market as “the core issue” investors face heading into the new year. “There is not a very robust history of a benign rise in the unemployment rate,” they added. Consumer spending accounts for about 70% of U.S. gross domestic product.

Tariffs, the economic wildcard of 2025, could cede center stage this year. The Trump administration has agreed to trade frameworks with most of America’s largest trading partners, and Trump may back off threatening more tariffs, which polls show a majority of Americans dislike, heading into November’s midterm elections.

If the Fed cuts rates next year and the U.S. avoids a recession, that should encourage investors. Over the seven most recent Fed easing cycles, stocks posted an average annualized return of nearly 28% outside of recessions, compared with a 3% pullback during recessions.

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Midterm elections and a Federal Reserve leadership change are expected to increase market volatility next year.

Key Takeaways

• Big tech stocks are likely to "take a little bit of a pause" next year, tempering the S&P 500's full-year returns, according to Jay Woods, chief strategist at Freedom Capital Markets.
• Woods expects relatively staid sectors like industrials, transports and financials to assume market leadership next year.
• Midterm elections, new Federal Reserve leadership, and the Supreme Court's ruling on tariffs could amplify market volatility.

After three consecutive years of double-digit gains, the S&P 500 is headed for “a boring, normal year,” according to one Wall Street strategist. 

“We think the bull run continues, but it’s not going to be the stampede” of the last three years, Jay Woods, chief strategist at Freedom Capital Markets, told CNBC on Tuesday. 

Woods expects the S&P 500 to rise between 3% and 5% over the next year to finish 2026 in the 7,200s. That’s one of the more bearish forecasts on Wall Street, where the median year-end S&P 500 target is about 7,650, according to CNBC’s most recent strategist survey.

Why This Is Important

Mega-cap tech stocks have fueled the stock market's rise for the past three years. But as concerns about AI spending grow, more and more analysts are warning that the tech sector's relentless march higher could be in jeopardy next year.

Woods attributes some of the benchmark index’s expected tepid returns next year to changing market leadership, a transition that he observes is already under way. “We’ve seen a broadening of this market,” he said. “That broadening is going to continue.” 

Technology stocks, for the third straight year, fueled the market’s gains in 2025 as the AI boom accelerated. Big Tech is expected to spend about $400 billion on infrastructure—much of it dedicated to AI—this year, up from about $250 billion last year. That spending fueled sales growth and stock gains for AI’s “pick and shovel” makers, a group that spans the technology, communications, industrials and utilities sectors. 

But lately, AI investments have become a liability for the so-called hyperscalers—Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Meta (META) and Oracle (ORCL)—who investors worry may struggle to see adequate return on their massive investments. Woods expects those concerns to continue to pressure shares of tech giants, whose market capitalizations in the trillions make them the most important stocks in the capitalization-weighted S&P 500. 

“There are going to be winners and losers in technology,” Woods said. “It’s not ‘AI is lifting all stocks,’ and as a result, some of those mega caps may take a little bit of a pause.” Instead, Woods sees more ho-hum sectors—such as industrials, transportation and financials—leading the market next year as investors reward their “slow, steady growth.”

While Woods predicts a “boring, normal year” in terms of what stocks lead, the road to next December will be far from boring, he says. Midterm elections in November are expected to increase volatility, as could a sharp pivot from the Federal Reserve, which will have a new leader in May. 

Investors could also be thrown a curve ball early in the year when the Supreme Court rules on President Donald Trump’s signature “Liberation Day” tariffs. “If they deem tariffs illegal … it’s gonna cause uncertainty,” which is what weighed on markets for much of the first half of 2025, according to Woods. 

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The "Santa Claus Rally" period is generally associated with year-end stock gains.

Key Takeaways

• The end of the year boost associated with Saint Nick tends to boost stocks by around 1%.
• Jeff Hirsch, author of the Stock Trader's Almanac, is looking out for a rally that will help boost the S&P 500 to a new record next year.

If Santa delivers this Christmas, investors could be cheering through 2026.

The so-called Santa Claus rally describes the historical tendency for stocks to rise over the final five trading days of December and the first two trading days of the new year—in this season's case meaning the period from Christmas Eve through Monday, Jan. 5.

Historically, the rally range has been good for stocks. Its average gains have been around 1.3% over that seven-day stretch since 1950—not a huge pop, perhaps, but still better than the 0.2% average return notched over "typical" 7-day periods, according to Invesco research.

Why does this happen? Some attribute it to the generally festive atmosphere, while others suspect a lack of liquidity that allows retail investors to take the wheel from institutions and professionals who step away for the holiday.

Why This Matters to Investors

The Santa Claus rally is a festive indicator some investors use to divine where stocks are going. It's not scientific, but rather a simple signal, flashing green or red, for the year ahead.

The purported rally isn't just a stock stuffer. It's sometimes seen as a directional market indicator for the year ahead—meaning that if Saint Nick is spotted lifting the major indexes over the next week or so, it could be a bullish sign.

The choppiness seen earlier this month is consistent with the seasonal pattern that eventually leads to the Santa Claus rally, Jeff Hirsch, son of Yale Hirsch—the writer of the Stock Trader's Almanac and the coiner of the term—said in an interview with Investopedia. His yearend target for the S&P is 7100, which would mean a new record and mark a roughly 20% gain for 2025. (As of Tuesday's record close of over 6909, the index is up 17% year-to-date.)

Santa doesn't always show up. The S&P 500 only locked in a 1%-plus gain over those 7 days in four out of the past 10 years, according to John Butters, senior earnings analyst at FactSet Research. Still, a miss from Santa hardly guarantees a downbeat year: The S&P 500 fell during the last rally period, but it's on track for big gains in 2025.

As for the year ahead, Hirsch said to look at two other other indicators, or what he calls the First Five Days and the January Barometer; the former measures performance over the first trading days of each year, and the latter measures the month. Since 1950, the S&P 500 has been up 90% of the time that all three—the Santa Claus Rally, First Five Days, and the January Barometer—happened at the start of the year.

And there are other reasons for optimism in 2025. Investors' interest rate expectations are flashing positive for stocks next year, for example. "This market sees just enough weakness in labor markets to justify easing, but not so much as to indicate any real risk of recession," Datatrek's Nicholas Colas and Jessica Rabe said in a report Sunday.

Put another way, according to Hirsch, if Santa Claus doesn't show up "it doesn't mean it's a bummer for 2026 as a whole."

Jason C. Andrew / Bloomberg via Getty Images

Strategy, once mainly an enterprise software company, has under Michael Saylor's guidance become a bitcoin play.

Key Takeaways

• Shares of bitcoin-linked company Strategy has fallen over 45% in the past year, underperforming the world's biggest cryptocurrency.
• Michael Saylor, Strategy's cofounder and executive chairman, said "what we're building goes beyond bitcoin exposure."

Bitcoin crusader and Strategy front-man Michael Saylor has a new story to tell about his company. Some experts think it could help revive the company's beleaguered stock.

For years, the company and its shares attracted a loyal following as a bitcoin proxy. Lately, though, they have lost some luster: As spot bitcoin funds got bigger and crypto businesses proliferated on major exchanges, giving traders more ways to play crypto, the stock started to slide and investors fretted that the company would be driven to sell its bitcoin for the first time. Pullbacks in crypto markets and worries that the stock could be removed from some indexes have Strategy—and Saylor—under some fire.

So what's their move? Saylor, the company's executive chairman, has revamped his pitch about the company, which he now calls a "capital markets platform." That might help revive a stock down more than 45% year-to-date, far further than the roughly 6% drop in bitcoin over the same period.

"What we’re building goes beyond bitcoin exposure," Saylor told Investopedia Monday. "It’s a capital markets platform: Digital Money built on Digital Credit, secured by Digital Capital. That’s not something an ETF or a fund structure can replicate."

Why This Matters to Crypto Investors

Though Strategy has taken a major hit, the company's stock has outperformed the S&P 500 since it announced its first bitcoin purchase in August 2020, rising more than 1200% compared to the benchmark's 105% gain. Now its principal public spokesman is looking to attract a new set of investors to the story and the shjares.

Saylor was referencing Strategy's variable rate series A perpetual stretch preferred shares (STRC), which raised about $2.5 billion and was used to buy bitcoin this summer. Strategy has issued securities of that ilk throughout 2025; the company, through stock sales, has built up its U.S.-dollar reserves to $2.2 billion.

That marks a partial pivot from past positioning of Strategy—formerly MicroStrategy—as a leveraged play on bitcoin, and it comes as the company faces several downside risks.

Index provider MSCI in October said that it may soon decide to remove companies whose business models is to buy cryptocurrency because they resemble investment funds, which are not eligible for inclusion in its indexes. JPMorgan analyst Nikolaos Panigirtzoglou last month estimated that removal from MSCI indexes would result in outflows of $2.8 billion, and almost quadruple that if other major indexes followed suit.

Some of the slide in Strategy's shares has been associated with the rise of spot bitcoin ETFs like BlackRock's iShares Bitcoin Trust (IBIT), as well as the launch of options on that fund, which mean investors have other choices for tracking bitcoin. "It's just not as differentiated as it was before bitcoin ETFs and before liquid IBIT options," Matt Hougan, CIO at Bitwise Asset Management, said.

Hougan said Strategy's one major advantage is its more than 670,000 bitcoins, which based on bitcoin's recent price of around $88,000, would be worth near $60 billion. Its cash reserves, while perhaps confusing to investors who wonder why they weren't all immediately put to work buying bitcoin, make more sense if the company was aiming to woo new potential investors eyeing the dividends promised by its preferred shares. (The company has said its goal is to have reserves that can cover two years or more of dividends.)

"Strategy intends to increase investor outreach on its preferred strategy," Citi analyst Peter Christiansen wrote in a November report, which could attract institutional investors and wealth management firms. Citi reiterated its buy rating, what is effectively a bullish stance, and a price target of $485, implying upside of about 200%.

Photographer: Yuri Gripas/CNP/Bloomberg via Getty Images

Secretary Linda McMahon's Department of Education will resume wage garnishments early next year.

KEY TAKEAWAYS

• Starting on Jan. 7, the Department of Education will begin notifying defaulted federal student loan borrowers that their income will be cut, months after wage garnishment was scheduled to start.
• More than 5 million borrowers are currently in default, and in 2026, they will see their income garnished to offset any missed student loan payments.

Months after being originally announced, defaulted federal student loan borrowers will have their wages cut by the Department of Education early next year.

Since this summer, the Department of Education has said it will garnish wages from borrowers who have defaulted on their loans. On Jan. 7, the first batch of defaulted borrowers, approximately 1,000, will be notified that their wages are set to be garnished, the Department of Education said in an email to Investopedia. The Department said the number of garnishment notices issued to defaulted borrowers will increase each month.

After a borrower defaults on their student loan, which typically occurs after not making a payment for more than 270 days, they receive a notice stating that their income will be garnished by up to 15% to compensate for the missed payments. They have 30 days after the notice before cuts to their income start, during which they can negotiate their repayment terms or request a hearing to stop their wages from being cut.

Over the past few years, millions of student loan borrowers have fallen behind on their payments and defaulted on their loans, following the end of the COVID-19 pandemic-era payment pause in 2023. As of September 30, 2025, 5.2 million borrowers were in default, and nearly 6.6 million were between one month and one year delinquent.

Borrowers who are currently in default and want to avoid wage garnishment can request that their loans be consolidated or placed in rehabilitation to bring them back into good standing.

Why This Matters

Federal student loan borrowers who default on their debt and have part of their wages garnished by the Department of Education will see a reduction in their spending money. This could hinder economic growth and reduce federal revenue, resulting in long-term economic consequences.

The Department of Education originally announced that it would resume collections on defaulted student loans in May and begin garnishing borrowers’ income later in the summer.

In mid-May, the department began withholding tax refunds from borrowers who defaulted on their student loans. This was the first time that defaulted borrowers faced garnishments in about five years, since the onset of the COVID-19 pandemic.

However, a department spokesperson told The Washington Post that the process of resuming garnishment for borrowers' personal, non-federal wages took longer than expected, partly due to the government shutdown.

Additionally, in June, the Department of Education said it had not and would not garnish any Social Security benefits from defaulted borrowers. The department confirmed in an email to Investopedia that it is continuing to pause Social Security garnishment.

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New research suggests that the world's wealthy economies could easily afford to end most extreme poverty if they chose to do so.

Key Takeaways

• It would cost $318 billion per year to eliminate most extreme poverty worldwide, that is, people living on less than $2.15 per day, a study found.
  
• The world's richest countries could easily afford the expenditure, the researchers concluded: it's far less than is spent on alcoholic beverages each year, for instance.
  

It would take $318 billion per year, or 0.3% of the world's economic output, to end extreme poverty worldwide.

That's according to a study from researchers at Stanford, the University of California, Berkley, and the University of California, San Diego published Monday by the National Bureau of Economic Research. The researchers analyzed income data from 23 countries and estimated that it would cost that much money to ensure that almost everyone in the world had at least $2.15 (in 2017 dollars) per day to live on, raising them above the global standard for "extreme" poverty.

What's Noteworthy About This Study

The research suggests that the world's wealthy economies, including the U.S., could easily afford to end most extreme poverty if they chose to do so.

The researchers studied a "targeted" approach—that is, finding people below the extreme poverty line and giving them cash until they were above it. That's compared to other possible remedies, such as universal basic income. They found the targeted approach cost about 19% as much as UBI. The policy they studied would reduce extreme poverty to 1% from its current level of 12%.

How much is $318 billion in the scheme of things? It's a tiny fraction of the world's economic output. It's about equal to the $320 billion that Meta, Amazon, Alphabet and Microsoft collectively planned to spend on AI research and data center expansion in 2025 according to a report by CNBC early this year. And the researchers noted that it's far less than the 2.2% of global GDP that's spent on alcoholic beverages each year.

The bottom line: wealthy nations such as the U.S. could easily afford to end the world's most dire poverty.

"In terms of sheer fiscal feasibility, however, there is no question that wealthy countries could finance most or all of policies such as this one," the researchers concluded. "And in a broader sense it implies that ending poverty is no more costly than other, arguably less critical global priorities."

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President Trump said Monday that the U.S. Navy could buy 20 to 25 ships made by Huntington Ingalls Industries

Key Takeaways

• Huntington Ingalls Industries shares surged to new highs this week after the Trump administration said it wants the company to build new ships for the U.S. Navy.
• With its recent gains, the stock has nearly doubled in value in 2025.

Huntington Ingalls Industries (HII) shares sailed to new highs this week.

Shares of the shipbuilder climbed close to 2% to a fresh record high Tuesday before paring back some of their early gains, extending their rally after the Trump administration said it wants the company to build new ships for the U.S. Navy.

President Donald Trump said in a press conference Monday that the first ship, designed and built by Huntington, will be called the USS Defiant as part of his effort to revamp the Navy's fleet of ships into a "Golden Fleet." Trump said the Navy could buy 20 to 25 of the new ships.

Why This Matters to Investors

Huntington Ingalls Industries shares have climbed steadily this year amid expectations it would benefit from the Trump administration's efforts to invest in and boost domestic manufacturing. Trump's plans for a broader revamp of the Navy's fleet could lead to more new orders for Huntington and other ship builders.

Huntington had announced Friday that it was selected to build new ships for the U.S. Navy, and that the ships will be based on a previous design currently used by the Coast Guard. Navy Secretary John Phelan said the first ships are expected to be completed by 2028. Shares of Huntington jumped over 4% Friday following the news, and added another 5% Monday.

With the stock's recent gains, it's nearly doubled in value in 2025.

Patrick T. Fallon and Mandel NGAN / AFP / Getty Images

After months of lobbying by Nvidia CEO Jensen Huang, President Donald Trump earlier this month said that the company would be allowed to sell its H200 AI chips in China.

Key Takeaways

• Nvidia reportedly hopes to sell its H200 AI chips in China as soon as February, after winning President Donald Trump's approval in exchange for a 25% revenue-sharing agreement.
• However, the chip's export to China could still face challenges in the U.S., as well as in China, injecting uncertainty into expectations around sales.

Nvidia finally won President Donald Trump's approval to sell its H200 AI chips in China, but will it be able to seal the deal?

The company looks to sell the chip in China as soon as February, Reuters reported Monday, after President Trump greenlighted the chip earlier this month in exchange for a 25% revenue-sharing agreement. But uncertainty over whether U.S. lawmakers or China's government will allow the sales has weighed on investor confidence that the sales will happen.

The H200 chip, which is a generation behind Nvidia's Blackwell line, had been banned for sale to China on national security concerns, and its export to the country still faces vocal bipartisan opposition in the U.S., along with potential challenges in China.

Why This Matters for Investors

Caught in the crosshairs of U.S.-China relations, exports of Nvidia's most advanced AI chips to China remain restricted. The chipmaker at the heart of the AI boom has argued that limiting China's access could hurt America’s competitiveness by driving Chinese firms to develop stronger products.

Since Trump announced the H200 deal in early December, U.S. lawmakers ‌from both parties have pushed back with demands for more oversight and bills that could block sales. On Friday, House Republicans introduced a bill that would allow Congress to block advanced AI chip exports, a day after House Democrats proposed a bill that would prohibit sales of America's most advanced chips to China and other countries of concern.

Chinese officials also have yet to approve H200 sales in the country, with analysts warning China's government could discourage firms from buying the chips, as it has with the H20, a weaker chip that Trump approved for export earlier this year.

In a note to clients Monday, analysts at Jefferies voiced some skepticism about whether the chip would be allowed, and that if it is, whether it could come with additional requirements for Chinese firms or a limited quota system.

"We do expect there is considerable opportunity for [Nvidia] if they are permitted to re-enter the market, but at this point it still seems unlikely to happen," Jefferies said following the announcement earlier this month.

Nvidia shares were up 2% in late-morning trading Tuesday. The stock has gained 40% in 2025, handily outpacing the performance of major stock indexes, but has lost 12% of its value since hitting an all-time high in late October.

Juliana Yamada / Los Angeles Times via Getty Images

Key Takeaways

• The U.S. economy grew at an annual rate of 4.3% in the third quarter, the fastest in two years and blowing past forecaster expectations.
• Tariffs dragged down imports, which count against the GDP.
  
• Consumer spending, the main engine of economic growth, accelerated.
  

The U.S. economy grew much faster than forecasters had expected in the third quarter, thanks to a drop in imports and a surge in consumer spending.

The inflation-adjusted Gross Domestic Product grew at an annual rate of 4.3% in the third quarter, the fastest since 2023 and up from 3.8% growth in the second, the Bureau of Economic Analysis said Tuesday. That blew past the 3.2% growth forecasters had expected, and was well above the 2.6% average annual growth rate over the previous four years.

What This Means For The Economy

The accelerating GDP of the U.S. economy in the third quarter is a good sign for future economic growth and standards of living, if it can be maintained.

The surge in economic growth partly reflected a decrease in imports, which count against the GDP, and have declined as a result of President Donald Trump's tariff campaign.

Other parts of the economy accelerated, including exports, government spending, and the all-important rate of consumer spending, which is the largest factor in the GDP and rose 3.5%. The economy has grown rapidly in the middle of the year after shrinking in the first quarter due to a frenzy of importing to get ahead of the tariffs.

"Policy changes, especially around tariffs, have caused large swings in behavior as consumers and businesses attempted to avoid the negative consequences of increased tariffs," Scott Hoyt, an economist at Moody's Analytics, wrote in a commentary.

That means the surge of economic growth may be more fragile than it looks on paper. Businesses have been slower than expected to pass the cost of the import taxes along to customers, but consumers and economists anticipate more price increases are coming.

"Since prices have not responded quickly, consumers and businesses have been buying ahead of feared price increases, pulling economic activity forward and supporting growth in the last two quarters, likely at the expense of future growth," Hoyt wrote.

The GDP has been a more volatile indicator of the economy's health than usual lately. Forecasters expect the GDP to drop in the fourth quarter because of the government shutdown in October and November and rebound again in 2026.

Tuesday's GDP report had been scheduled to be released in October, but was delayed by the government shutdown. The BEA will revise its GDP estimate and release a final tally next month.

Update, Dec. 23, 2025: This article was updated with additional information from the report and commentary from an economist.