Davos 2025: Disruption is Rarely Smooth

As the New Year begins with great promise and a good dose of uncertainty, I’m about to hop on a plane to travel to Davos for the World Economic Forum’s annual meeting. Given the state of the world, the issues facing business, and the timing of the event coinciding with the inauguration of our new president, there will be no shortage of topics for discussion at this year’s gathering.

Following on from last year’s theme of “Rebuilding Trust,” this year’s event will focus on “Collaboration for the Intelligent Age,” which is particularly relevant as businesses and their leaders work to address disruption on many fronts.

As we’ve learned over the last few years, there is unfortunately no crystal ball to predict what this year will bring. Therefore, we all must remain nimble and resilient in the face of uncertainty. In my role, I’m fortunate to spend time talking to leaders within our NYSE community— the great thinkers and innovators who are driving growth on a global scale. Inspired by these conversations and my own experiences leading the NYSE, I’d like to share three trends that organizations should keep their eye on in 2025.

IPOs Will Return in 2025

During 2024, we saw a cautious reopening of the IPO market. We welcomed amazing companies across industries to the NYSE, including Reddit, LandBridge, Loar Holdings, Viking Cruises, Standard Aero, UL Solutions and Rubrik. As expected, much of that momentum waned in the autumn due to our presidential election. I am very optimistic for 2025, and the NYSE has a healthy pipeline of companies looking to tap the public markets, several of which have already announced plans to list in the first few weeks of this year. Last Thursday, we kicked off this momentum with Flowco Holding’s IPO, which priced above its range and traded over 20% higher than its offering price during its debut.

At the NYSE, we are proud of the highly curated community of leading companies listed on our exchange. We look forward to welcoming many more companies to this world-class community in 2025.

From my vantage point, the power of the public markets has never been clearer. Public markets provide the best source of valuation for companies, providing real-time mark to market and broad liquidity every second of the trading day. More specifically, our U.S. capital markets offer issuers the broadest base of investors, and the deepest pools of liquidity, found anywhere in the world. Amid waves of disruption, investors have been able to consistently rely on the resilience of our U.S. markets, a critical driver of innovation, jobs and economic output around the world. It’s why companies from around the globe choose to list their shares on the NYSE. Whether it’s through a transfer, like Dublin-based Flutter Entertainment, or an IPO, like Finnish sporting brand Amer Sports, the U.S. markets are the envy of the world.

Good Data will be Essential for AI Driven Innovation

With greater technological advancement comes greater opportunity for innovation. We can all agree that artificial intelligence will impact every industry and sector, including financial markets. We are still in the early stages of that transformation. CEOs are still defining use cases for this technology because many are still curating the data sets that underpin the tools that they employ.?This year, companies will be laser-focused on tackling these data sets to inform how to create tangible, practical use cases for AI technology, while still protecting valuable intellectual property. Disruption of this scale does not come smoothly, but the potential optimization and innovation it can yield will be well worth it.

At the NYSE, we have a constant focus on innovation to ensure that our markets adhere to the highest standards of transparency and liquidity to the benefit of issuers and investors. In December, for example, we filed with the SEC to offer what we call a selective midpoint order type, which is an exchange order that leverages the power of AI. Pending regulatory approval, it will use AI in an innovative and responsible way to identify and prevent the execution of orders during moments of market instability. This order type aligns with our unique market model, the cornerstone of the NYSE, that dampens volatility and deepens liquidity.

Economic Uncertainty will Remain

Beginning 2024 at about 37,500, the Dow Industrials broke through the 44,000 and 45,000 barriers during a strong rally around Election Day. The S&P 500 pierced 6,000 for the first time. As December wore on, that momentum faded — dampened by concerns about the pace of future Fed rate cuts. On the first trading day of 2025, the Dow opened under 43,000 and the S&P 500 started below 6,000.

In September, the Fed began to ease interest rates, reversing a cycle of 11 hikes that began in early 2022. Yet, it more recently signaled it will remain vigilant on inflation. While a hypothetical crystal ball would come in handy here, it is impossible to say with certainty what our markets will do in 2025, especially on the eve of a new administration taking the reins. But I am certain that our U.S. capital markets will remain robust and resilient, just as they have been for over 200 years.

During the days to come in the mountains of Switzerland, I look forward to a thoughtful discussion amongst those who participate in this year’s World Economic Forum meeting. The weather forecast in Davos is calling for sunshine, which, to me, represents the optimism I feel about the innovation and growth to come in the next 12 months for the U.S. markets.

As always, please consider the NYSE as your first call for insights into our economy and markets as you navigate through the year ahead.