The year began with high valuations in US large cap equities, particularly among tech-related companies. Many held the view that any major bad news could trigger a correction. Meanwhile a new presidential administration held firm on threats of new widespread tariffs. News from China that AI may be far cheaper to implement tested the market but led to sector and geographic rotation rather than a broad sell-off. Rates and inflation were relatively calm, the Fed held firm on policy, and bonds earned their income.