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For U.S. stocks, 2025 brought strong returns after a bumpy ride. Shares of Rochester-area companies also ended the year in positive territory—but just barely.
The benchmark S&P 500 gained more than 16 percent, its third straight year with a double-digit increase but short of the back-to-back annual gains of more than 20 percent in 2023 and 2024. The tech-heavy Nasdaq Composite did even better, rising 20 percent, while the Dow Jones Industrial Average gained 13 percent.
Among two dozen stocks of local interest tracked by the Rochester Beacon—publicly held companies based in the Rochester area or with sizable operations here—seven outperformed the S&P 500, while five logged smaller gains. But half of the 24 stocks ended the year with negative returns, compared with nine in 2024.
Together, a composite of the two dozen stocks of local interest edged up just 2 percent.
At the start of 2025, analysts were expecting another year of solid gains, though not as robust as the previous two years. That forecast proved to be on target. However, few predicted the sharp swings that occurred during the year.
The biggest shock to the market came on April 3, when President Donald Trump unveiled sweeping tariffs on dozens of countries. Within a week, the S&P 500 tumbled some 12 percent. Then, after Trump paused the tariffs on April 9, the market rebounded. It endured more ups and downs through the remainder of the year, but its upward momentum prevailed.
Three interest rate cuts by the Federal Reserve helped fuel the market’s rise during 2025, but the real driving force was almost giddy enthusiasm about artificial intelligence. Some estimates say AI-related expenditures now do more than consumer spending to produce GDP growth.
In recent years, the so-called Magnificent Seven—the tech giants Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla—have generated the biggest market gains. In 2025, Alphabet, Microsoft and Nvidia led the way, all surging more than 40 percent.
The top performer among stocks tracked by the Beacon was Constellation Energy Corp., which rose 58 percent in 2025. The nation’s largest producer of carbon-free energy, Constellation owns the R.E. Ginna nuclear power plant in Ontario, Wayne County. Its stock has generated strong gains since February 2022, when it separated from utility giant Exelon Corp.
AI has helped power the rise of Constellation Energy’s stock. AI data centers require enormous amounts of energy, and the company has signed long-term power purchase agreements with big players like Microsoft and Meta.
Graham Corp. ranked second among the two dozen stocks of local interest. In 2024, its 134 percent increase earned Graham top honors locally; the company followed that with a 44 percent gain in 2025.
Batavia-based Graham designs and manufactures a range of products for defense, space, energy, and process industry customers. In its most recent quarterly report, the company said revenue increased 23 percent to $66 million. Another positive factor for investors: Graham had no debt outstanding as of Sept. 30, 2025, and nearly $45 million available on its revolving credit facility.
Among the seven companies on the Beacon list that outperformed the S&P 500 in 2025 was Eastman Kodak Co. Investors, who initially reacted badly to news coverage of Kodak’s second-quarter release, which included a “going concern disclosure” required by accounting rules, changed their minds—the stock finished the year up 29 percent, easily topping the S&P 500.
Paychex Inc., long one of the region’s stock market stars, fell to earth in 2025. Its shares dropped 19 percent, placing Paychex in the middle of the pack of local companies that ended the year in negative territory. On Dec. 19, the company reported total revenue increased 18 percent to $1.6 billion in its fiscal second quarter, and earnings per share beat forecasts, but its stock has continued to struggle—on Monday, its shares hit a 52-week low.
For the second year in a row, Xerox Holdings Corp. was the biggest loser. Its shares dropped 72 percent, following a 50 percent decline in 2024. In October, Xerox confirmed it was conducting another round of layoffs, in the wake of its acquisition of Lexmark, which closed on July 1.
What will 2026 bring? Market watchers appear to be generally optimistic, forecasting more gains in the coming 12 months. Economic growth may be sluggish, but few see a recession on the near horizon.
Steady ahead was the message in the latest Paychex Small Business Employment Watch, which tracks sentiment among smaller companies—a sector that accounts for nearly half of total U.S. employment. Its latest report, released Tuesday, said 2025 “marked a year of consistency for U.S. small business job and wage growth trends.”
“The latest read on our data reveals a continued moderation in wage inflation and little change in the rate of job growth among America’s small businesses in 2025, with certain regions like the Midwest and sectors such as health care demonstrating strength throughout the year,” said John Gibson, Paychex president and CEO.
But with unpredictable policy actions in Washington, concerns about an AI bubble and historically pricey stock valuations, analysts seem to agree: more market turbulence cannot be ruled out.
Paul Ericson is Rochester Beacon executive editor.
The Beacon welcomes comments and letters from readers who adhere to our comment policy including use of their full, real name. See “Leave a Reply” below to discuss on this post. Comments of a general nature may be submitted to the Letters page by emailing [email protected]
Good article, IMO misleading headline. Presumably this is targeted at “Main St” investors. The total 2025 return of the benchmark S&P 500 (including dividends) was 17.88%. Given the annual average return over a long period of time is ~10%, I would characterize 2025 results as spectacular, (not “mixed”). Index investors in 401Ks and IRAs had a great year. If your point is local stocks had a mixed performance , that’s true (that should of been reflected in the headline IMO). By definition local stocks are a less diversified segment of the total market, thus “mixed” results should be expected. For the headline readers out there, IMO this headline (misleadingly)casts doubt on a strong stock market performance for 2025.
None of us have a crystal ball, but this year is a off-year-election-year, which historically has more volatility and corrections.
I wish everyone happy stock market returns for 2026!
Thanks for your comment, Tom. “Mixed picture” in the headline does refer to the performance disparity between the S&P 500 and the local stock composite. As the first paragraph notes, last year did produce a strong return for the benchmark S&P, while the local composite had only a marginal gain, and fully half of the stocks were negative for the year. Even the S&P was mixed, in the sense that the seven giant tech companies were responsible for more than half of the index’s total return (and most of that was due to just two of the seven). But nonetheless, anyone who was invested in an S&P index fund last year certainly did well.