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Dec. 23 (UPI) — U.S. consumers showed steady confidence this holiday season, with retail spending up 4.2% from last year, according to preliminary data via Visa released Tuesday.

Despite ongoing economic challenges, shoppers continued to buy especially tech and personal items. The analysis — based on Visa payments data from Nov. 1 over a seven‑week period — excluded auto, gas and restaurant categories and wasn’t adjusted for inflation.

Michael Brown, principal U.S. economist at Visa, said the “underlying surprise” was that U.S. consumer spending “is holding up reasonably well in light of softer consumer confidence than we had this time last year and a number of headwinds and concerns about inflation.”

In-store purchases made up 73% of total spending, though online sales rose by 7.8% and were the main source of growth fueled by convenience and early holiday deals.

Brown said the 2025 holiday season signaled a clear change in shopping habits, driven in part by artificial intelligence reshaping how consumers discover products and compare prices.

“We are seeing consumers use AI in a big way in comparison shopping and then helping to narrow down that perfect gift,” Brown told CNBC.

Electronics saw the strongest gains, with sales up 5.8%, driven by demand for newer, high-powered devices linked to the AI boom.

Apparel and other accessories rose 5.3% and general merchandise retailers offering one-stop shopping recorded a 3.7% increase.

But home-focused categories lagged. Spending on building materials and garden supplies slipped 1% and furniture and home furnishings were nearly flat edging up just 0.8%.

Although overall retail growth appears solid, the figures are not adjusted for inflation, meaning actual inflation‑adjusted gains were likely smaller once Consumer Price Index data was fully factored in.

Meanwhile, a recent survey found that 41% of Americans intended to cut back on holiday spending this year, which was up six points from 2024.

“This is the first holiday shopping season where roughly half of the consumers in that survey responded that they are going to leverage AI for one of those two tasks,” Brown added.

Dealmakers in 2025 enjoyed a near-record year for mergers and acquisitions, despite a turbulent spring that threatened hopes of a broader revival. So far this year, there were 70 global deals valued at more than $10 billion each, 22 of them in the fourth quarter, according to Dealogic. Total deal value has surpassed $4.8 trillion, up 41% from 2024, though the number of deals fell 6% to 38,395, marking the second-largest year ever behind 2021.

The spike in mega deals reflects a growing focus on scale. “M&A today is all about the mega deals, the race for scale,” said Anu Aiyengar, JPMorgan’s global head of advisory and M&A. There were at least four deals above $50 billion, with two notable bids for Warner Bros. Discovery totaling over $80 billion and Paramount Skydance’s $108 billion hostile offer.

Drivers of Late-Year Rally

A more permissive regulatory environment in the U.S., coupled with a calmer macroeconomic outlook, is encouraging companies to pursue transformative deals. With antitrust scrutiny easing under the Trump administration, boards and executives are seizing opportunities for strategic acquisitions, according to Frank Aquila, partner at Sullivan & Cromwell.

Dealmakers also say valuations are rising, prompting companies to pay higher multiples while expecting their own stocks to maintain relative strength. “Valuations have been bid up and we’ve seen clients be more aggressive in terms of multiples,” said Lazard’s Mark McMaster.

Technology and AI Influence

Technology deals, particularly those tied to artificial intelligence, have played a prominent role. OpenAI raised $40 billion in funding led by SoftBank, and Aligned Data Centers was acquired for $40 billion. Morgan Stanley’s John Collins said companies are pursuing scale to invest in AI-driven changes, both in tech and across other industries.

Cross-Border and Global Trends

Cross-border M&A activity surged in 2025, reaching $1.24 trillion, the highest since 2021. U.S. and UK companies were the most targeted, while U.S., France, and Japan were the most acquisitive. Multinational companies, particularly from Europe and Japan, are investing in the U.S. to capitalize on the world’s largest market. China and Japan are also seeing strong outbound activity, with Japanese deal values boosted by high-profile transactions like OpenAI and Toyota Industries.

Corporate divestitures are rising, up 30% in volume from last year, exemplified by Holcim’s $30 billion spin-off of its North American business, Amrize. Private equity is also regaining momentum, with global buyouts reaching $1.1 trillion, a 51% increase from 2024.

Outlook for 2026

Dealmakers expect the M&A rally to continue into 2026, with $50 billion–$70 billion deals already in the pipeline and a $100 billion tech transaction not ruled out. Analysts see a multi-year run of high-value deals, fueled by scale-seeking corporations, AI-related opportunities, cross-border expansion, and corporate restructuring. While caution remains in politically uncertain markets like the UK, the global appetite for transformative deals appears set to drive another strong year for mergers and acquisitions.

With information from Reuters.

McErlean said securing a second season with M-Sport “means everything” after a solid rookie campaign.

After a late deal to drive in the WRC, McErlean finished seventh on his debut in Monte Carlo and equalled that result in Finland and the Central European Rally.

“I’m incredibly grateful to M-Sport and the Motorsport Ireland Rally Academy for continuing to believe in me and giving me the chance to build properly,” McErlean said.

“To have another season at this level means a lot. I’m in a completely different place mentally compared to this time last year, stronger, clearer, and ready to enjoy the challenge ahead.

“2025 was all about learning, learning the car, the championship, the rhythm of Rally1, and what it really takes, mentally and physically, to operate at this level week in, week out.

“We made real progress across the season, and I could feel things starting to click more and more as the year went on.”

Millener said McErlean’s progression in his first season was “very clear to see”.

“It’s great to be able to give them the opportunity to continue this upward trajectory.

“Away from the events, they have both become much-valued members of the team and I’m really looking forward to working with them again.”

The deals for McErlean and Armstrong strengthen the links between M-Sport and Motorsport Ireland, and the remainder of the Cumbrian’s outfit’s line-up will be announced in due course.