The Spanish stock market has experienced its best year since 1993 in 2025, thanks to the second-largest increase in its history: a 49.3% rise, reaching 17,307.80 points. The Ibex 35 has outperformed all expectations after a long period of stagnation due to its sector composition, filled with banks - which had been sluggish for a decade due to historically low interest rates - and energy companies - whose growth is linked to the economic cycle. The remarkable increase is almost three times higher than the EuroStoxx 50, the index that includes the largest companies in the eurozone; it doubles the German DAX and quintuples the performance of the Paris stock market, heavily affected by political instability and soaring debt.
The Ibex's performance not only stands out among major European exchanges but also when compared to Wall Street, where the S&P 500 managed to rebound and closed with a 17% increase in its currency. For European investors who have invested there, they must add the currency's appreciation against the dollar, which will also go down in history. Over the last twelve months, the dollar has depreciated against major world currencies, with a 12% drop against the euro, reaching nearly 1.18 in the exchange rate. Experts predict that this trend will continue to around 1.25 levels next year. 2025 has also been a year of paradigm shift. A new way of understanding the free world, where the U.S. came to be seen, at times, as dispensable in terms of currency and financial refuge... although it was just a passing effect of the irrational and nationalist discourse of its president. Donald Trump was able to turn the game board around in just over a month.
In early March, he startled investors by announcing 25% tariffs for Canada and Mexico, breaking years of economic agreement among the three North American powers. On April 2, known as 'liberation day', the rest of the world faced the real threat of soaring tariffs that never materialized. The underlying issue was the damage caused to the bond market, a turning point for investors who warned Trump about the seriousness of the consequences of his nationalist discourse. Investors triggered a rush out of U.S. debt seeking refuge elsewhere, selling bonds, dollars, and anything related to American currency. The U.S. 30-year bond yield surpassed 5% for the first time in history. It was then that an extension was granted, initially until July 1, to negotiate. The deadline was not met, but it was enough to calm the markets, showing that the tariffs were not harming the U.S. economy or global growth.
In that context, with the U.S. sidelined, money began flowing back to Europe in a historical rotation that lasted just over two months. Very little of the outflows that had left years ago seeking better destinations and returns in a stagnant Europe incapable of keeping up with technological advancements returned to the Eurozone. The narrative about European markets has shifted towards the EU's efforts to boost capital union, create a single account to encourage citizens to invest in European companies, buy stocks, funds, and plan their retirement with pension plans. Europe is building this new phase based on two reports - those written by Enrico Letta and Mario Draghi - which emphasize the need to put the Old Continent back at the forefront, requiring funds to finance the change.
Meanwhile, Spain has emerged as one of the big winners. The national market has benefited greatly from the new environment where its guests are the best-dressed at the party. Everything has worked in favor of the index. The Spanish economy continues to perform strongly, with the national GDP growth being the highest among major European economies. The Bank of Spain forecasts a growth rate of 2.9% for this year. Additionally, national banks (representing a third of the market capitalization) have successfully completed a cycle on a high note. The European Central Bank (ECB) has returned to a neutral stance, where interest rates and inflation are back to the historical 2% level. Christine Lagarde implemented four consecutive interest rate cuts for the eurozone, from 3% to 2% in June, clearly signaling a pause that could be interrupted in 2026, with the market not ruling out up to two interest rate hikes.
Banco Santander and BBVA surpassed 100 billion euros in market capitalization in 2025. The former achieved this milestone in March and is now close to 150 billion; the latter, in October, reached historic highs above 20 euros. The Spanish banking sector shines in Europe, with increases of over 125% for the entity led by Ana Botín, and Unicaja, BBVA, and CaixaBank doubling their market capitalization in twelve months; while Bankinter and Banco Sabadell also saw advances of around 80%.
All attention was drawn to the (hostile) takeover bid that was resolved in favor of Banco Sabadell in mid-October after 17 months of accusations and a battle to defend its independence. Carlos Torres accepted the outcome, which only garnered 25% support from the shareholders of the Catalan bank for its merger proposal.
But one standout performer above all is Indra, the only company in the entire national market dedicated to the defense sector. Germany surprised at the beginning of the year by deviating from its historical financial discipline to approve a plan endowed with half a trillion euros - potentially expandable by another 300 billion - to invest in and renew its defense infrastructure and equipment amidst the war in Ukraine and the threat from Russia. This decision came in a world where U.S. pressure on NATO countries to increase military spending became impossible to ignore. Spain itself, refusing to comply with these demands, committed to reaching 2% of GDP.
However, there is a consistent trend of reluctance to go public on European stock exchanges... and by extension, on the Spanish stock exchange. In 2025, there were several IPOs, but the enthusiasm for going public remains subdued. Cirsa, the Catalan gaming and recreational company, had the largest debut on the Continuous Market last July with Blackstone, the fund controlling the company and gradually divesting from it.
Furthermore, the year ended without any changes in the composition of the Ibex. In fact, the last inclusion in the index occurred in July 2024 with the addition of Puig Brands, filling the gap left by Meliá Hotels after its stock market debut two months earlier. The high-end perfumery company leads the annual losses in the Ibex after dropping nearly 17% in the past year. It is followed by Telefónica, Cellnex, Redeia, and Amadeus. This quintet in the index experienced losses in a historic year for the market.
GOLD AND SILVER
When fear spreads among investors, it's time to seek refuge in the market... and there is no better shelter than gold and silver. The golden metal had a historic performance in 2025, with a 65% gain that even led it to surpass the $4,500 per ounce mark in the last days of December. Behind this recent rise lies the increase in geopolitical tensions between the US and Venezuela in the Caribbean Sea, where the US administration has intercepted various Venezuelan ships, alleging they were carrying drugs to the US coasts. Additionally, the rise in the price of gold triggers a higher demand for physical gold from gold ETF managers, in order to secure their investments with physical ounces of this metal.
Stock market experts add another major reason to this, which is the prediction that the US Federal Reserve will implement two interest rate cuts in 2026, something that traditionally favors the golden metal, acting as a safe haven. Goldman Sachs believes that the gold rally will continue and could lead it to $4,900 per ounce in 2026.
Santander AM analysts understand that behind the gold surge is a higher interest from investors, who doubled their purchases during 2025, reaching $2.2 trillion, compared to what central banks hold, which is less than $1 trillion; and the demand for jewelry, close to $1.5 trillion. In the case of silver, the appreciation seen in recent weeks has led to a 150% increase in 2025, surpassing $70. As for platinum, the rise in the market is similar, also close to 150% in the last twelve months, reaching $2,240, levels not seen since before the 2008 financial crisis.
Less fortunate is Brent crude oil, the European reference, which has lost nearly a fifth of its value this year, holding at $60 per barrel. It is trading at four-year lows.