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Nvidia takes $5 billion stake in Intel under September agreement

Dec 29 (Reuters) – has purchased Intel shares worth $5 billion, the American semiconductor firm said in a filing on Monday, carrying out a transaction announced in September.

The leading AI chip designer said in September it would pay $23.28 per share for Intel common stock, in a deal that is seen as a major financial lifeline for the chipmaker after years of missteps and capital intensive production capacity expansions drained its finances.

The world’s most valuable firm has bought over 214.7 million Intel shares at the price set out in the September agreement, in a private placement, according to Monday’s filing.

U.S. antitrust agencies had cleared Nvidia’s investment in Intel, according to a notice posted by the U.S. Federal Trade Commission earlier in December.

Nvidia shares were down 1.3% in premarket trading while Intel stock was little changed.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Anil D’Silva)

 

US pending home sales hit nearly 3-year high

Summary

  • rose 3.3% in November, beating forecasts
  • Sales contracts are up 2.6% from a year earlier
  • Lower and wage growth boosted affordability
  • All U.S. regions posted gains in pending home sales

Dec 29 (Reuters) – Contracts to purchase previously owned U.S. homes unexpectedly shot to the highest in nearly three years in November, as improving affordability conditions drew in buyers, the said on Monday.

Pending home sales rose 3.3% last month after an upwardly revised 2.4% gain in October, the NAR said. Economists polled by Reuters had forecast contracts, which become sales after a month or two, rising 1.0%.

Pending home sales rose 2.6% from a year earlier.

The index tracking sales rose to its highest level since February 2023.

“Homebuyer momentum is building. The data shows the strongest performance of the year after accounting for seasonal factors, and the best performance in nearly three years, dating back to February 2023,” said Lawrence Yun, the NAR’s chief economist.

“Improving housing affordability – driven by lower mortgage rates and wage growth rising faster than home prices – is helping buyers test the market,” Yun said. “More inventory choices compared to last year are also attracting more buyers to the market.”

Contracts rose in the Northeast, Midwest, the South and the West.

Mortgage rates have edged lower since the resumed interest rate cuts in September, though it is unclear if rates will fall much further in the months ahead with the central bank signaling a likely pause in the reductions.

Data from mortgage finance agency Freddie Mac showed the latest 30-year, fixed-rate mortgage rate was 6.18%, near the lowest since the fall of 2024.

 

(Reporting by Dan Burns; Editing by Andrea Ricci)

 

Wall St hovers near record highs in post-Christmas session

Dec 26 (Reuters) – U.S. stock indexes hovered near all-time highs in thin post-Christmas trading on Friday, supported by signs of a resilient economy and renewed investor interest in AI-related companies.

The benchmark S&P 500 hit an intraday record high before pulling back slightly, while the blue-chip Dow Jones Industrial Average was about 0.5% from its December 12 peak.

U.S. stocks rebounded after last week’s selloff, when AI and technology stocks faced pressure from concerns over lofty valuations and high capital expenditures denting profits.

However, resilient economic data, the prospect of further policy easing under a new chair next year and fresh appetite for AI stocks fueled a market recovery, putting the S&P 500, Dow and Nasdaq on track for a third straight year of gains.

“2026 is likely going to be a ‘prove-it’ year for markets. Companies must deliver tangible productivity and margin gains from AI and other investments,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Analysts expect profit for S&P 500 companies to increase 15.5% in 2026, an improvement from a 13.2% growth forecast for 2025, according to data compiled by LSEG.

The S&P 500 has risen more than 17% so far in 2025, driven by megacap tech companies for much of the year, but the rally has broadened of late, with investors piling into cyclical sectors such as financials and materials.

Traders are waiting to see if the “Santa Claus rally” — a seasonal phenomenon where the S&P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac — can happen this time. That period began on Wednesday and will run through January 5.

At 11:42 a.m. ET, the Dow Jones Industrial Average fell 65.06 points, or 0.13%, to 48,666.10. The S&P 500 lost 0.48 points, or 0.01%, to 6,931.57, while the Nasdaq Composite gained 12.11 points, or 0.05%, to 23,625.41.

climbed 1.4% after the AI chip designer agreed to license chip technology from startup and hire its CEO.

Target rose 1.7% after the Financial Times reported the retailer is facing pressure from hedge fund Toms Capital Investment Management, which has made a significant investment in the company.

U.S.-listed shares of precious metal miners such as First Majestic, Coeur Mining and Endeavour Silver rose between 0.3% and 2.2%, as silver and gold prices smashed fresh records again. [GOL/]

Declining issues outnumbered advancers by a 1.37-to-1 ratio on the NYSE and by 1.71-to-1 on the Nasdaq.

The S&P 500 posted 17 new 52-week highs and no new lows, while the Nasdaq Composite recorded 33 new highs and 126 new lows.

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar)

 

Oil falls $1 on looming supply glut, hopes for Ukraine peace deal 

Summary

  • fell to $61.21 while WTI dropped to $57.30 a barrel
  • Oil is on track for its steepest annual decline since 2020
  • IEA forecasts global supply exceeding demand by nearly 3.9 million BPD
  • raise prospects of lower geopolitical risk premiums

HOUSTON, Dec 26 (Reuters) – fell by more than $1 a barrel on Friday as investors weighed a looming global supply glut and a reduced war risk premium, amid hopes of a Ukraine peace deal ahead of talks this weekend between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump.

Brent crude futures fell $1.03 or 1.65% to $61.21 per barrel by 11:42 a.m. EDT (1642 GMT). U.S. West Texas Intermediate (WTI) crude fell $1.05 or 1.8% to $57.30.

While supply disruptions have helped oil prices rebound in recent sessions from their near five-year low on December 16, they are on track for their steepest annual decline since 2020. Brent and WTI are down 18% and 20% respectively on the year, as rising crude output caused concerns of an oil glut heading into next year.

“Geopolitical premiums have provided near-term price support, but have not materially shifted the underlying oversupply narrative,” Aegis Hedging analysts said in a note on Friday.

The next year will exceed demand by 3.84 million barrels per day, according to figures from the Paris-based IEA’s December oil market report.

Eyes on Russia-Ukraine peace process

Investors are watching for developments in the Russia-Ukraine peace process and the possible impact on future oil prices, as a peace agreement could lead to the removal of international sanctions against Russia’s oil sector.

Zelenskiy will discuss territorial issues, the main stumbling block in talks to end the war, with Trump in Florida on Sunday, as a 20-point peace framework and a security guarantees deal near completion.

Announcing the meeting, Zelenskiy said that “a lot can be decided before the New Year.”

A foreign policy aide to Russian President Vladimir Putin spoke to members of the U.S. administration after Moscow received U.S. proposals about a possible Ukrainian peace deal, the Kremlin said on Friday.

“The negatives remain of elevated global oil storage, and slight progress on Ukraine-Russia peace talks,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Elsewhere, the White House ordered its military forces to focus on a “quarantine” of Venezuelan oil for at least the next two months, indicating Washington is currently more interested in using economic rather than military means to pressure Caracas.

“The global impact to crude prices looks minimal at this time,” Kissler said of U.S. actions to intercept sanctioned oil tankers leaving and entering Venezuela.

The U.S. on Thursday also carried out a strike against Islamic State militants in northwest Nigeria’s Sokoto state in coordination with the Nigerian government, Trump said.

“Nigerian strikes touted by Trump are targeting Islamic State and not specifically impacting any crude pipelines or oil terminals. Thus traders are staying on the sidelines in this thin-liquidity market on Boxing Day,” said June Goh, senior oil market analyst at Sparta Commodities.

Nigeria’s oilfields and export infrastructure are mainly located in the south of the country.

(Reporting by Georgina McCartney in Houston, Robert Harvey in London and Sudarshan Varadhan in Singapore; Editing by Muralikumar Anantharaman, Joe Bavier and Edmund Klamann)

 

Target faces activist investor pressure as sales slide

Dec 26 (Reuters) – Target is facing pressure from hedge fund Toms Capital Investment Management, which has made a significant investment in the retailer, the Financial Times reported on Friday, citing people familiar with the matter.

Shares of the company were up 1.5% after the news. The stock has lost about 26% of its value this year.

The Minneapolis-based retailer has posted three straight quarters of falling comparable sales and is betting on incoming chief and longtime company executive Michael Fiddelke to revive growth, as the business faces pressure from strained household budgets and tariff uncertainties.

Meanwhile, rival Walmart has gained market share with its focus on cheap groceries and household essentials, coupled with fast doorstep delivery.

“As part of our robust shareholder engagement program, we maintain a regular dialogue with the investment community. Target’s top priority is getting back to growth…,” Target said in a statement to Reuters.

Target has plans to spend an additional $1 billion in 2026 on new store openings and remodels. It has also cut 1,800 corporate roles as part of a broader restructuring.

Earlier this year, Toms Capital had built a stake in Tylenol maker Kenvue before its sale to Kimberly-Clark last month for $40 billion.

Toms Capital did not immediately respond to a Reuters request for comment.

(Reporting by Savyata Mishra and Sanskriti Shekhar in Bengaluru; Editing by Vijay Kishore)

 

Nvidia, joining Big Tech deal spree, to license Groq technology, hire executives

Summary

  • signed a non-exclusive license for ‘s AI inference chip technology
  • Groq founder and CEO Jonathan Ross will join Nvidia along with key engineers
  • The deal stops short of an acquisition amid heightened
  • Nvidia faces growing competition in AI inference from AMD and startups

Dec 24 (Reuters) – Nvidia has agreed to license chip technology from startup Groq and hire away its CEO, a veteran of Alphabet’s Google, Groq said in a blog post on Wednesday.

The deal follows a familiar pattern in recent years where the world’s biggest technology firms pay large sums in deals with promising startups to take their technology and talent but stop short of formally acquiring the target.

Groq specializes in what is known as inference, where models that have already been trained respond to requests from users. While Nvidia dominates the market for training AI models, it faces much more competition in inference, where traditional rivals such as Advanced Micro Devices have aimed to challenge it as well as startups such as Groq and Cerebras Systems.

Nvidia has agreed to a “non-exclusive” license to Groq’s technology, Groq said. It said its founder Jonathan Ross, who helped Google start its AI chip program, as well as Groq President Sunny Madra and other members of its engineering team, will join Nvidia.

A person close to Nvidia confirmed the licensing agreement.

Groq did not disclose financial details of the deal. CNBC reported that Nvidia had agreed to acquire Groq for $20 billion in cash, but neither Nvidia nor Groq commented on the report. Groq said in its blog post that it will continue to operate as an independent company with Simon Edwards as CEO and that its cloud business will continue operating.

In similar recent deals, Microsoft’s top AI executive came through a $650 million deal with a startup that was billed as a licensing fee, and Meta spent $15 billion to hire Scale AI’s CEO without acquiring the entire firm. Amazon hired away founders from Adept AI, and Nvidia did a similar deal this year. The deals have faced scrutiny by regulators, though none has yet been unwound.

“Antitrust would seem to be the primary risk here, though structuring the deal as a non-exclusive license may keep the fiction of competition alive (even as Groq’s leadership and, we would presume, technical talent move over to Nvidia),” Bernstein analyst Stacy Rasgon wrote in a note to clients on Wednesday after Groq’s announcement. And Nvidia CEO Jensen Huang’s “relationship with the appears among the strongest of the key US tech companies.”

Groq more than doubled its valuation to $6.9 billion from $2.8 billion in August last year, following a $750 million funding round in September.

Groq is one of a number of upstarts that do not use external high-bandwidth memory chips, freeing them from the memory crunch affecting the global chip industry. The approach, which uses a form of on-chip memory called SRAM, helps speed up interactions with chatbots and other AI models but also limits the size of the model that can be served.

Groq’s primary rival in the approach is Cerebras Systems, which Reuters this month reported plans to go public as soon as next year. Groq and Cerebras have signed large deals in the Middle East.

Nvidia’s Huang spent much of his biggest keynote speech of 2025 arguing that Nvidia would be able to maintain its lead as AI markets shift from training to inference.

(Reporting by Stephen Nellis in San Francisco; Additional reporting by Harshita Mary Varghese in Bengaluru; Editing by Shailesh Kuber, Matthew Lewis and William Mallard)

 

Dominion Energy sues federal government over offshore wind farm halt

SUMMARY: 

  • ‘s $11.2 billion CVOW project off coast of is one of five East Coast wind projects impacted by federal stop-work order.
  • Richmond-based utility is suing for injunction to be able to continue construction.
  • Wind farm has been timed to be in operation by late 2026, powering 660,000 homes.
  • Hearing is set in federal court in Norfolk on Dec. 29

Updated Jan. 2

Dominion Energy has sued the federal and the U.S. , seeking to continue work on its project after the federal government issued stop-work orders on five wind farms under construction.

The was filed on Tuesday, one day after the suspended the lease of Dominion’s Coastal Virginia Offshore Wind project.

The Richmond-based Fortune 500 utility seeks a preliminary injunction so it can continue work on the offshore wind farm, which is expected to be complete in late 2026. The complaint filed in the U.S. District Court for the Eastern District of Virginia calls the BOEM’s order “arbitrary and capricious,” as well as “procedurally deficient.”

The court set a Dec. 29 hearing on the motion in Norfolk, according to a Christmas Eve order, but in an order Dec. 28, the hearing was reset for Jan. 16.

In the complaint, Dominion set the total cost of the project at $11.2 billion, an increase from $10.9 billion, cited earlier this year after the utility anticipated would raise CVOW’s cost. The 2.6-gigawatt project is expected to power 660,000 homes.

Dominion and OSW Project, a limited liability corporation, are suing Secretary of the Interior Douglas Burgum and BOEM’s acting director, Matthew Giacona, along with the departments they head. CVOW, an offshore wind project under construction 27 miles off the coast of Virginia Beach, is one of five offshore wind leases suspended on the East Coast, including Revolution Wind off the coast of Rhode Island and Connecticut, Vineyard Wind 1 off Massachusetts, and Sunrise Wind and Empire Wind off New York. According to Dominion, the suspension is for 90 days.

Burgum’s statement Tuesday said that the project leases were being suspended after the Pentagon raised concerns that the movement of huge turbine blades and the highly reflective towers cause radar interference. The resulting “clutter” obscures legitimate moving targets and generates false targets in the vicinity of the wind projects, it said.

The pause will give relevant federal agencies “time to work with leaseholders and state partners to assess the possibility of mitigating the national security risks posed by these projects,” the department said in a news release.

However, Dominion argues in the lawsuit that the order is “the latest in a series of irrational agency actions attacking offshore wind and then doubling down when those actions are found unlawful.”

President Donald Trump has long excoriated projects, calling them ugly, costly and inefficient. Since taking office in January, his administration has placed stops on offshore wind projects approved under the Biden administration and already under construction, including Revolution Wind and Empire Wind.

Dominion argues that the federal order is causing “serious, irreparable harm to [Dominion Energy Virginia] and its customers,” the lawsuit says. “All of CVOW’s offshore wind turbine and substation foundations are already in place, construction of other offshore and onshore components is ongoing or complete. There is a strict timeline for remaining CVOW construction activities, and any delay will affect the availability of specialized vessels, equipment and labor.”

The delay caused by the BOEM order, Dominion adds in the complaint, “is imposing extensive costs on [Dominion] and on the electric service customers who will benefit from CVOW.”

Dominion issued a statement this week about the legal action.

“If granted by the court, this will allow the project to resume work,” the statement says. “At the same time, we will work to seek resolution through cooperation with the agencies and the White House, with a focus on achieving a durable solution. CVOW is essential to meeting our customers’ needs. Delaying the project will lead to increased costs for customers and threaten long-term grid reliability. Given the project’s critical importance, we have a responsibility to pursue every available avenue to deliver the project as quickly and at the lowest cost possible on behalf of our customers and the stability of the overall grid.”

The Department of the Interior and the Bureau of Ocean Energy Management did not respond immediately to requests for comment Friday.

Reuters contributed to this report. 

Warner Bros bidding war and red hot M&A market has dealmakers working through holidays

Summary

  • Global M&A deals hit $463.6 billion in December, up 30% from last year
  • Major transactions include IBM’s $11B Confluent deal and a $6B Trump Media merger
  • Paramount, Skydance and Netflix battle over Warner Bros Discovery
  • Bankers expect a strong deal pipeline heading into early 2026

NEW YORK, Dec 22 (Reuters) – A flurry of multi-billion-dollar deals has bankers and advisers from Wall Street to Canary Wharf packing laptops next to presents and warning family and friends their holiday vacations over the next two weeks will be cut short.

There have been $463.6 billion in announced this month, 30% more than last year, including Trump Media & Technology Group’s $6 billion merger with nuclear fusion firm TAE Technologies, IBM’s $11 billion purchase of data infrastructure company Confluent and a bidding war between Paramount Skydance and Netflix for Warner Bros Discovery, according to data compiled by Dealogic.

“This is the hunt and the finish, and we all enjoy it,” said Charles Ruck, a partner at Latham & Watkins, which is advising Paramount on its bid for Warner Bros. “I’m not telling anybody not to travel. I’m telling them, wherever you are, I might need some of your time.”

Just this weekend, a group of firms led by Permira and Warburg Pincus inked a deal to buy investment and accounting software maker Clearwater Analytics Holdings for about $8.4 billion, including debt.

“It’s busy, and it’s really broad-based … we’re seeing a fair amount of activity across most of our industry sectors,” said John Collins, global head of M&A at Morgan Stanley.

WARNER BROS BIDDING WAR

This holiday season is shaping up to be one of the most active in recent years, according to interviews with about a dozen bankers and legal advisers.

Investment bankers at Citigroup said last month was the busiest November in years. Dealmakers from New York to London and Hong Kong say they are trying to close numerous multi-billion-dollar deals before the ball drops in Times Square on New Year’s Eve. As the C-suite gets more aggressive, several big companies are looking to hire advisers before the end of the year to tee up big deals in 2026. Two dealmakers in London and New York say they plan to work through the holidays, while some are optimistic that they will take off Christmas Day and, fingers crossed, Christmas Eve too.

That may be more difficult for bankers, advisers and public relations professionals working on the Warner Bros deal. The bidding war keeps them close to their phones and laptops this holiday season, with some working through Christmas. On Monday, Paramount revised its $108.4 billion hostile bid, which is being jointly financed by RedBird Capital Partners, with an extended deadline of January 21.

“We’re going to be working through the holidays and into the first week of January to communicate the merits of our offer to shareholders,” RedBird founder and Chief Investment Officer Gerry Cardinale said on CNBC on Monday.

That is far from the only deal in town. Latham’s Ruck, who declined to discuss the Warner Bros talks, told Reuters last week the firm expected to announce at least four more deals in the next two weeks.

“Our team understands it without me saying it,” he said. “They recognize that this is a magic moment, that these magic moments don’t last forever, that we are on front-page, cutting-edge deals.”

This has turned out to be an extraordinary year for dealmakers after a trade war kicked off by U.S. President Donald Trump derailed activity in the second quarter. Globally, surpassed $4.8 trillion as of last week, making it the second-best year on record after 2021, when near-zero interest rates and COVID stimulus drove M&A to over $6 trillion.

DEALS PIPELINE STRONG FOR EARLY 2026

At Sullivan & Cromwell, partner Frank Aquila plans to work through the holidays. The pipeline is “very strong” for the first half of next year, which he said could rival 2021.

“This will very much be a working holiday,” he said in an interview.

Guillermo Baygual, global co-head of M&A at Citigroup, said his team is “extremely busy. There’s a lot happening, both in the corporate and in the sponsor world.”

A lot of corporate clients are hiring advisers for “significant transactions across sectors,” he said.

Added Collins: “We went through a couple years where it just felt like management teams and boards were finding reasons to say no. We have seen a real shift in philosophy towards trying to find reasons to say yes.”

 

(Reporting by Dawn Kopecki in New York and Charlie Conchie and Anousha Sakoui in LondonEditing by Rod Nickel)

 

Dominion gas plant in Chesterfield on hold, while SCC considers petition

Dominion Energy’s proposed plant is now on hold, as the is reconsidering its final order approving the project.

In a Dec. 15 decision, the SCC issued a brief ruling that it will consider a petition from opponents of the (CERC) — , the NAACP and Mothers Out Front. This puts the project on hold for at least the time being, according to the ruling.

The petition raises multiple issues, including possible health impacts of air pollution, higher costs for customers if the plant is built, and “disregards substantial proof that new gas is not required to meet Virginians’ energy needs,” according to a statement from the groups’ legal counsel, Southern Environmental Law Center (SELC).

Meanwhile, on Dec. 19, the Virginia approved an air permit for the project, but this doesn’t override the SCC’s reconsideration.

In November, the SCC approved the $1.47 billion, 944-megawatt power plant’s certificate of public convenience and necessity, which Dominion applied for in March. Known as a peaker plant, the facility would provide electricity at peak demand hours, according to the Fortune 500 utility. It is projected to be in operation by June 1, 2029.

“There is little doubt that Dominion’s need for additional generation assets is urgent,” the SCC’s Nov. 25 opinion said. “The near-term reliability concerns motivating the CERC project … cannot be addressed by non-carbon-emitting resources.”

The project still could go forward, but the SCC’s new ruling, which follows the Dec. 15 submission of a petition for reconsideration, pauses the process. The three opposing groups and the SELC issued a statement, saying that they appreciate the SCC’s reconsideration.

“We hope that the commission will see and acknowledge the unfairness of continuing to force particular communities to bear the brunt of pollution from fossil fuel infrastructure,” SELC Senior Attorney Grayson Holmes said. “Since this is the first case assessing what constitutes a ‘threat to reliability,‘ sufficient to overcome the [Virginia] Clean Economy Act’s presumption against building new gas plants, we also hope the commission will recognize that permitting Dominion to claim this narrow exception on flimsy evidence sets a bad precedent — effectively suggesting that any future gas proposals could easily clear this hurdle, even if they are not the cleanest or most economic option.”

Dominion issued statements about the SCC’s latest decision and the DEQ’s approval.

“We stand behind the SCC’s approval of the project,” Dominion said. “It was approved after a year of exhaustive review, an extensive public hearing and participation by thousands of Virginians. The Chesterfield Energy Reliability Center will provide reliable power for hundreds of thousands of homes, businesses, schools and hospitals in Chesterfield and beyond. It’s an important part of Virginia’s all-of-the-above strategy to ensure our region has the reliable power we need to continue growing and thriving.

“We appreciate the DEQ’s thorough review and the strong public participation in the process. This is good news for our customers, Virginia’s economy and the reliability of the grid.”

Appalachian Voices and Friends of Chesterfield, a group of neighbors opposing the plant, criticized the DEQ’s decision.

“We are profoundly disappointed that DEQ is siding with corporate polluters and ignoring the health impacts of air pollution from this dirty methane-fired power plant on our community,” said Glen Besa, chair of Friends of Chesterfield. Matt Allenbaugh, Appalachian Voices’ Virginia campaign coordinator, said it was “unacceptable that Chesterfield residents will be exposed to decades of additional air pollution after finally getting relief from the coal plant.”

US economic growth accelerates in third quarter

Summary

  • US gross domestic product rose at a 4.3% annualized rate in the third quarter, beating expectations
  • accelerated to a 3.5% pace, led by a rush to buy electric vehicles
  • Economists warn momentum has faded amid rising living costs and a prolonged
  • Higher-income households are driving growth, underscoring a widening K-shaped economy

WASHINGTON, Dec 23 (Reuters) – The U.S. economy grew faster than expected in the third quarter, driven by robust consumer spending, but momentum appears to have faded amid the rising cost of living and recent government shutdown.

Gross domestic product increased at a 4.3% annualized rate last quarter, the Commerce Department’s Bureau of Economic Analysis said in its initial estimate of third-quarter GDP on Tuesday. The economy grew at a 3.8% pace in the second quarter. Economists polled by Reuters had forecast GDP would rise at a 3.3% pace.

The data was delayed by the 43-day government shutdown and is now outdated. Consumer spending increased at a 3.5% rate last quarter after advancing at a 2.5% pace in the second quarter.

Much of the consumer spending acceleration resulted from a rush to buy electric vehicles before the September 30 expiration of tax credits. Motor vehicle sales dropped in October and November, while spending elsewhere was mixed.

The nonpartisan Congressional Budget Office has estimated the shutdown could slice between 1.0 percentage point and 2.0 percentage points off GDP in the fourth quarter. It projected most of the GDP drop would be recovered, but estimated between $7 billion and $14 billion would not.

HIGHER-INCOME HOUSEHOLDS DOING THE HEAVY LIFTING

Surveys suggest consumer spending is being driven by higher-income households, thanks to a stock market boom that has inflated household wealth. In contrast, middle- and lower-income consumers are struggling amid the rising cost of living resulting from President Donald Trump’s sweeping , economists said, creating what they call a K-shaped economy.

That phenomenon also is playing out among businesses. Economists said large corporations have mostly managed to withstand the blow from the import duties, which have increased costs, and are investing in . But smaller businesses are struggling with tariffs.

Trump’s policies are contributing to what economists have termed an affordability crisis that is denting his approval ratings. Households also face higher utility bills as the rapid growth of AI and cloud computing data centers boosts electricity demand. Some will face skyrocketing health insurance premiums in 2026.

The this month cut its benchmark overnight interest rate by another 25 basis points to the 3.50%-3.75% range, but signaled borrowing costs were unlikely to fall in the near term as policymakers await clarity on the direction of the labor market and .

(Reporting by Lucia Mutikani; Editing by Paul Simao and Chizu Nomiyama)