U.S. consumers displayed notable resilience this holiday season, driving retail spending up 4.2% year over year, according to preliminary data released Tuesday by Visa.

The report from Visa Consulting and Analytics shows that despite lingering economic headwinds and ongoing concerns about inflation, shoppers continued to spend, particularly on technology and personal goods.

The findings, based on a seven-week period beginning Nov. 1 and drawn from a subset of Visa’s payments network data in the U.S., cover core retail categories while excluding spending on automotive, gasoline, and restaurants. Figures are reported in nominal terms and are not adjusted for inflation.

In-store purchases accounted for the bulk of holiday spending, capturing 73% of total retail payment volume, while online purchases made up the remaining 27%. E-commerce, however, was the primary driver of growth, rising 7.8% compared with last year, reflecting continued demand for convenience, early-season promotions, and increasingly AI-assisted shopping behavior.

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

Brown highlighted that the 2025 holiday season marked a distinct behavioral shift, with artificial intelligence influencing how consumers compare products and make purchase decisions. Roughly half of consumers surveyed reported using AI for either comparison shopping or narrowing down gift options, marking the first holiday season with such widespread AI adoption.

Spending Categories and Consumer Trends

The breakdown of spending across categories shows a shift toward personal goods and convenience. Electronics emerged as the top-performing sector, posting a 5.8% increase, attributed to a refresh cycle driven by “high-performance devices in the AI era.” Apparel and accessories rose 5.3%, while general merchandise stores—retailers offering a one-stop shopping experience—saw a 3.7% lift.

Conversely, home improvement struggled during the holidays. Spending on building materials and garden equipment fell 1%, suggesting that consumers prioritized gift-giving and personal gadgets over home maintenance. Furniture and home furnishings remained essentially flat, with a modest 0.8% gain.

While the headline 4.2% growth signals strength, real spending growth adjusted for inflation is estimated at roughly 2.2%.

“Consumers are uncertain, cautious, but also smart about how they’re spending their money,” Brown said.

Visa’s data also highlights a disconnect between sentiment and action. According to the CNBC All-America Economic Survey, 41% of Americans planned to spend less this holiday season, six points higher than last year. Rising import prices and years-long inflation remain a significant factor at checkout, yet spending overall remained robust.

AI and Technology’s Role

Experts say AI tools have allowed consumers to maintain spending levels despite economic uncertainty. Shoppers increasingly leverage AI for comparison shopping, deal-finding, and refining product preferences in real-time, allowing them to make smarter choices and optimize their budgets.

Electronics, boosted by high-performance AI-capable devices, exemplify the influence of these technologies on purchasing behavior.

Looking ahead, analysts expect U.S. retail spending to remain supported by continued AI adoption, e-commerce growth, and selective discretionary spending. Wage growth and corporate hiring trends could sustain consumer purchasing power, while interest rate levels set by the Federal Reserve will remain critical. Analysts note that a moderation in inflation, combined with technology-driven efficiencies, may further encourage online and high-tech goods spending.

Given the growing influence of AI in comparison shopping and personalized recommendations, retailers that integrate AI into their platforms are likely to see continued gains. Categories like electronics, apparel, and convenience-focused products are expected to maintain momentum, while sectors like home improvement may face slower growth unless interest rates and consumer confidence improve.

AI is increasingly central to how Americans shop, and it is believed that as we move into 2026, consumers will continue to leverage these tools to make smarter decisions, even in the face of macroeconomic uncertainty. Some analysts believe that the holiday season, so far, has demonstrated that technology can offset some of the pressures from inflation and high costs.

Overall, the 2025 season is believed to have marked the evolving U.S. retail landscape, where AI-driven tools, convenience, and personal tech are shaping consumer behavior.

Citadel, the multistrategy hedge fund powerhouse founded by billionaire Ken Griffin in 1990, is set to distribute approximately $5 billion in profits earned during 2025 to its investors in early 2026, according to a person familiar with the matter quoted by CNBC.

This partial return of gains—rather than a full payout—reflects the firm’s strategic approach to capital management, aiming to align its asset base with a more limited opportunity set anticipated in the coming year amid economic uncertainties. The firm’s flagship Wellington fund, a cornerstone of its multistrategy platform, delivered a net return of 9.3% through mid-December 2025, the source said, speaking on condition of anonymity as performance details are private.

While respectable, this marks Citadel’s weakest annual performance since 2018, underperforming the S&P 500’s robust 18% gain for the year. Key headwinds included misfired wagers on natural gas prices, which fizzled amid volatile energy markets, though the fund’s diversified strategies across equities, fixed income, commodities, quantitative trading, and credit helped mitigate broader losses.

For context, Wellington posted a 1.4% gain in November alone, boosting its year-to-date return to 8.3% at that point, according to earlier reports. Citadel’s Global Fixed Income fund complemented this with a 1.1% return in November, bringing its 2025 performance to 8.5%, demonstrating resilience in a year marked by interest rate fluctuations and geopolitical tensions. Overall, the firm’s tactical trading and risk management prowess shone through, even as peers like Balyasny Asset Management and ExodusPoint Capital Management navigated similar challenges—Balyasny’s multistrategy fund, for instance, returned around 7% through November, while ExodusPoint lagged at 3.5%.

The $5 billion payout will reduce Citadel’s assets under management to $67 billion from the current $72 billion, a deliberate drawdown to enhance agility and return potential in a potentially choppy 2026 environment. This practice is not routine but has become a hallmark of Griffin’s leadership: Since 2017, Citadel has returned a cumulative $32 billion in profits to investors, including this latest tranche, prioritizing efficiency over unchecked growth. Such moves underscore the firm’s philosophy of constraining capital when opportunities appear limited, allowing for more targeted deployments in high-conviction trades.

Citadel’s enduring success is unrivaled in the hedge fund industry. According to LCH Investments’ annual rankings, the firm has generated $83 billion in net gains for investors since inception through 2024—far surpassing competitors like Ray Dalio’s Bridgewater Associates ($58 billion) and George Soros’ Quantum Fund ($43 billion). With 2025’s contributions, that lifetime total is poised to exceed $88 billion when updated figures are released in January 2026, solidifying Citadel’s position as the most profitable hedge fund in history.

In 2024 alone, Citadel notched $8.1 billion in net gains, though D.E. Shaw led the pack that year with $11.1 billion, highlighting the competitive landscape. Founded with just $4.6 million in a Harvard dorm room, Citadel has evolved into a Miami-headquartered behemoth employing over 3,000 professionals globally, renowned for its pod-based structure that fosters internal competition among trading teams.

Under Griffin—who personally amassed a net worth exceeding $40 billion by mid-2025 through savvy investments in art, real estate, and philanthropy—the firm has consistently delivered annualized returns of around 19% for Wellington since launch, blending quantitative models with fundamental analysis. The 2025 performance, while below Citadel’s lofty standards, occurred against a backdrop of global market volatility: U.S. equities surged on AI-driven optimism, but sectors like energy and commodities faced headwinds from supply gluts and geopolitical risks. Natural gas bets, in particular, soured as prices plummeted amid mild weather and ample inventories, costing the fund potential upside.

Still, Citadel’s risk controls, honed through past crises like the 2008 financial meltdown, when it returned 38%, ensured steady navigation.

Industry peers have taken note. Millennium Management, another multistrategy giant, returned about 8% in 2025 through November, while D.E. Shaw focused on quantitative edges to edge out competitors.

Citadel’s distribution strategy contrasts with asset gatherers like Blackstone, emphasizing returns per dollar over scale, which has endeared it to institutional investors seeking alpha without bloat. Beyond performance, Citadel’s culture and talent magnet status bolster its edge. In 2025, it ranked as the “Ideal Employer” in hedge funds per eFinancialCareers surveys, attracting top quants and traders with competitive compensation, average pay exceeding $500,000, and cutting-edge tech infrastructure. Griffin’s high-profile moves, including a $50 million donation to Harvard in October and ongoing art acquisitions (his collection is valued at over $2 billion), further enhance the firm’s prestige.