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Japanese carmakers Honda and Nissan have agreed to merge in 2026, saying that developing new technologies was too hard to do alone. Throw Mitsubishi, in which Nissan has a controlling interest, into the mix, and the company would become the world’s third-largest carmaker after Toyota and Volkswagen, selling 8 million vehicles a year.

The move to electric vehicles and autonomous cars, driven by AI, is making innovation harder and more expensive, one reason for the combination. “It would be tough to do that by ourselves,” said Honda CEO Toshihiro Mibe. But both firms have similar vehicle lineups, meaning managing the combination will take time, and could be contentious. Honda, the larger of the two firms, will have a majority of directors on the new company’s board, and Mibe will be its CEO. Shares in Nissan rose nearly 30% on the news, and Honda shares were up almost 14%.

The move comes amid rising pressure from China, where inexpensive electric vehicles dominate the local market and threaten the hold of many conventional carmakers. Pure battery and plug-in hybrids are expected to make up half the new-vehicle sales in China next year, with sales growing 20% to 12 million autos, according to data gathered by The Financial Times. The scale of China’s EV industry means costs keep dropping, giving companies like BDY tremendous advantages, even with steep tariffs and even steeper threatened tariffs in Europe and the U.S.

Internal combustion engine cars have seen annual sales in China drop 30% since 2022, suggesting that foreign automakers with traditional assembly lines in China will have virtually no market by the end of the decade. Foreign brands took a record low 37% of new car sales in 2024, down from 64% in 2020. GM already wrote down $5 billion of its China joint venture, and Volkswagen has cut the value of its China operation by 20 billion euros.

Who exactly is in Elon’s World? The New York Times has a useful primer of who’s who in Muskdom, including his backers (Peter Thiel, Mark Andreessen and Larry Ellison), his friends (Rupert Murdoch, Michael Dell, Ari Emanuel), his family (Mom, Dad, Kimbal, his wives), his lieutenants (lawyer Alex Spiro, Linda Yaccarino and cost-cutter Steve Davis), and The Trumpists (Tucker, Vivek, and Mr. T himself). • All those cracks about “President Musk” and “Vice President Trump” are getting under The Donald’s skin. Speaking last weekend at a meeting of conservative activists in Phoenix, Trump brought up the rivalry un-prompted: “No, he’s not going to be president, that I can tell you. And I’m safe, you know why? He can’t be — he wasn’t born in this country.” Trump famously questioned the birthplace of Barack Obama, who went on to serve two terms as president. • Musk posted a pic of himself looking slim in a Santa suit, and called himself “Ozempic Santa,” though he added that technically he’s not using the famed Novo Nordisk drug but rather rival Eli Lily’s product, Mounjaro.

• Steel waiting: As Pittsburgh-based U.S. Steel and its union wait to hear if the U.S. will approve the metalmaker’s sale to Japan’s Nippon Steel, the feds’ Committee on Foreign Investment in the United States has decided to kick the can to President Joe Biden, who has vowed to scuttle the sale, saying the firm should remain U.S.-owned and operated. His administration has been divided between concern for the future of U.S.-made steel, a national security issue, and the hopes of finding a buyer who could revive its aging mills.
• Squid Game is back: Netflix is banking on a second season of Squid Game, the Korean do-or-die series that grabbed 2.8 billion views since its 2021 debut, making it the most-watched program ever on the platform. Locally made content for regions around the world is now generating most of Netflix’s subscriber growth, and the company has 26 local production offices overseas, each able to green-light its own shows. Meanwhile, Netflix has acquired the rights to broadcast the women’s soccer World Cup in 2027 and 2031. Netflix had major technical issues when it broadcast a boxing match between Mike Tyson and Jake Paul earlier this year, raising questions about its ability to mass-stream live events.
• American wait lines: At Thanksgiving, it was a shortage of air traffic controllers that bogged down air travel, especially for United and its Newark hub. For Christmas, a software bug on Tuesday stymied American Airlines flights, preventing planes from being cleared for takeoff: only 15% of the carrier’s flights left on time before the bug was fixed that evening. It’s another sign that the U.S. air transportation industry is in need of major investment and a technical overhaul, and comes after a flawed software security update from CrowdStrike halted flights around the world. But Donald Trump’s plan to cut government spending and loosen regulation means it’s unlikely that the problems will be fixed anytime soon.
• Venting over Ventis: A five-day strike by baristas at more than 500 unionized Starbucks coffee shops is just the beginning of potential action by workers who feel they are underpaid and say the company isn’t making a serious offer. Under new CEO Brian Niccol, the company says it’s the workers who are making unreasonable demands. They say they want raises of 64% to 77% over the life of a three-year contract, but the company says that including benefits, workers are already making $20 to $30 an hour, and offered a 1.5% annual raise.
• Tax break: About a million U.S. taxpayers will see a $1,400 check in the mail from the IRS. The payments come after the agency noticed many taxpayers had failed to complete the application for pandemic-era relief in 2021, meant for those who did not receive a third stimulus check distributed by the feds after the coronavirus shutdowns.
• Nordstrom’s private sale: The Nordstrom family has struck a deal to take their eponymous department store chain private at $24.25 a share, valuing the company at $6.25 billion. The company’s shares have plummeted since a peak above $80 in 2014. The family is partnering with El Puerto de Liverpool, a Mexican real estate and department store company that has owned a stake in Nordstrom since 2022.
• Telegram telegraphs profits: Telegram, the social media platform known for the privacy protocols that make it a favorite of political opposition movements and drug smugglers, is on track to surpass $1 billion in revenue, nearly triple last year’s income, and possibly turning a profit this year, the New York Times reports, citing an inside source. Despite reporting a user base of about 1 billion people, the company has struggled to make money because its anonymous users can’t be targeted by ads. It has made some money from launching its own cryptocurrency, Toncoin.
• Hedgehog eats lion: Paramount’s Sonic the Hedgehog 3 beat Disney’s Lion King prequel Mufasa at the box office last weekend, hauling in $62 million to the jungle king’s $35 million. Sonic cost $122 million to make, while Mufasa cost $200 million.

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• Buying is back: The wrapping paper’s still all over the floor, and the batteries you ordered last night on Amazon haven’t arrived yet, but the first numbers on Christmas shopping are in. According to a tally by MasterCard SpendingPulse, total spending by American consumers for the holiday period (Nov. 1 to Dec. 24) was up 3.8% from last year, although that’s before accounting for inflation, which has been about 2.5%–2.8% this year. Online sales were up 6.7% and brick-and-mortar store sales were up 2.9%. The survey says lower-priced holiday deals drove spending.
• Biden tariffs? The Biden Administration is looking into China’s production of older types of silicon chips used in cars, appliances, telecom equipment, and weapons. The U.S. says China’s government is subsidizing the production of the chips in an effort to create a “supply-chain choke point,” giving it economic leverage over the U.S. Tariffs could be imposed on goods made with the Chinese chips.
• Rocket gets a rocket: The Consumer Financial Protection Bureau, the regulator that Elon Musk wants to shut, has sued Rocket Homes for promoting mortgages offered by its partner Rocket Mortgage, and failing to tell prospective home buyers about the availability of products offered by other lenders and government agencies, including down-payment assistance programs. The company called the accusation that homebuyers paid more than they should have when using Rocket Homes “a lie.”
• Pharma TV ad ban? RFK Jr. and Elon Musk are attacking those TV ads for drugs used to treat everything from erectile dysfunction to kidney disease, arguing they lead broadcasters to cover the pharma industry more favorably, and do nothing to improve the health of Americans. It’s not clear how a ban could be enforced: Big Pharma has won previous court battles and broadcasters get significant income from the ads, with both arguing a ban would infringe their First Amendment free speech rights.
• Party’s over: Party City is closing its more than 700 stores in the U.S. by Feb. 28, the company said, citing “inflationary pressures on costs and consumer spending.” The party supply chain filed for Chapter 11 bankruptcy protection in January 2023. It exited bankruptcy in August last year, but was unable to make a go of it. Stores in Canada, Hawaii and Puerto Rico, as well as some franchised outlets in the U.S., are likely to remain open. Container Store also announced it is filing for bankruptcy protection, and hoping to emerge on more solid financial ground. Beyond, the owner of Bed, Bath and Beyond and Overstock, said it could not make a proposed $40 million investment in Container Store. Retailers are shutting their doors more often this year than last year, according to Coresight research, which blamed Amazon and China-based shopping sites Shein and Temu for taking customers from brick-and-mortar stores.
• Gas boom: The natural gas industry is expecting big growth this year, as President-elect Donald Trump’s “drill, baby, drill” policies are expected to open more areas to exploration, and gas processors and refiners will be building more facilities to handle the greater flows. The U.S. is already the world’s largest exporter of liquified natural gas, even amid dire warnings that burning hydrocarbons will speed planetary warming. While Energy Secretary Jennifer Granholm says there’s little market for more capacity, the industry says U.S. gas is needed to replace dirtier fuels, like coal, burned in China, India, and elsewhere.

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So Skydance’s CEO David Ellison, the son of Oracle founder and megayacht owner Larry Ellison, is about to take control of Paramount, the entertainment conglomerate assembled by the late mogul Sumner Redstone, and controlled and run for the past several years by his daughter Shari. Paramount comes with a host of resources, including CBS, cable networks such as MTV and Comedy Central, and the famed Paramount Studios, whose Sonic the Hedgehog 3 bested Disney’s latest Lion King drama at the box office last weekend.

But Ellison has his work cut out for him. Paramount’s streaming business has been growing slowly, but the cable business is declining even faster, with the company writing down its value by $6 billion in August, and the industry as a whole looking for a new business model as viewers abandon traditional TV and even cable channels, for for streaming.

The trickiest part will be increasing revenue. Paramount makes most of its profits from cable networks, but they’re losing audiences and with them, ad dollars.

Ellison and his top lieutenant, Jeff Schell, are looking to cut $2 billion in annual costs, but its not clear how they can cut costs without cutting revenue. They’ve hired a former Netflix executive, Cindy Holland, to oversee streaming, but they are running up against a reluctance by consumers to keep paying for multiple streaming services. Combining studios for film, TV and streaming may help cut costs, but it could also create bottlenecks as productions jostle for access to cash, studios and stars.

Meanwhile, the $8.4 billion deal is facing a challenge from a nonprofit public-interest law firm that wants the Federal Communications Commission to block the deal, citing an investment in Skydance by China’s Tencent Holdings and what it called ideological bias at CBS News. The FCC has to approve the deal in the next few months, or it could collapse.

FRANKFURT, Germany (AP) — A power cable linking Finland and Estonia under the Baltic Sea suffered an outage, prompting an investigation, Finnish Prime Minister Petteri Orpo said Wednesday.

Writing on X, Orpo said that power transmission through the Estlink-2 cable stopped Wednesday and that authorities were “investigating the matter.” He said the interruption would not affect electricity supplies in Finland.

Estonian network operator Elering said there was enough spare capacity to meet power needs on the Estonian side, public broadcaster ERR said on its website.

Authorities have been on edge about undersea infrastructure in the Baltic. Two data cables, one running between Finland and Germany, the other between Lithuania and Sweden, were severed in November.

Germany's defense minister said officials had to assume the incident was “sabotage," but without providing evidence or saying who might have been responsible. The remark came during a speech in which he discussed hybrid warfare threats from Russia.

The Nord Stream natural gas pipelines that once brought natural gas from Russia to Germany were damaged by underwater explosions in September 2022. Authorities have termed it sabotage and launched criminal probes.

The Estlink-2 cable was down for much of this year to repair damage from a short circuit that may have been caused by the cable’s complex positioning, ERR reported.

NEW YORK (AP) — What a wonderful year 2024 has been for investors.

U.S. stocks ripped higher and carried the S&P 500 to records as the economy kept growing and the Federal Reserve began cutting interest rates.

The year featured many familiar winners, such as Big Tech, which got even bigger as their stock prices kept growing. But it wasn't just Apple, Nvidia and the like. Bitcoin, gold and other investments also drove higher.

Here's a look at some of the numbers that defined the year. All are as of Dec. 20.

Remember when President Bill Clinton got impeached or when baseball's Mark McGwire hit his 70th home run against the Montreal Expos? That was the last time the U.S. stock market closed out a second straight year with a leap of at least 20%, something the S&P 500 is on track to do again this year. The index has climbed 24.3% so far this year, not including dividends, following last year's spurt of 24.2%.

The number of all-time highs the S&P 500 has set so far this year. The first came early, on Jan. 19, when the index capped a two-year comeback from the swoon caused by high inflation and worries that high interest rates instituted by the Federal Reserve to combat it would create a recession. But the index was methodical through the rest of the year, setting a record in every month outside of April and August, according to S&P Dow Jones Indices. The latest came on Dec. 6.

The number of times the Federal Reserve has cut its main interest rate this year from a two-decade high, offering some relief to the economy. Expectations for those cuts, along with hopes for more in 2025, were a big reason the U.S. stock market has been so successful this year. The 1 percentage point of cuts, though, is still short of the 1.5 percentage points that many traders were forecasting for 2024 at the start of the year. The Fed disappointed investors in December when it said it may cut rates just two more times in 2025, fewer than it had earlier expected.

That’s how many points the Dow Jones Industrial Average rose by the day after Election Day, as investors made bets on what Donald Trump’s return to the White House will mean for the economy and the world. The more widely followed S&P 500 soared 2.5% for its best day in nearly two years. Aside from bitcoin, stocks of banks and smaller winners were also perceived to be big winners. The bump has since diminished amid worries that Trump’s policies could also send inflation higher.

The level that bitcoin topped to set a record above $108,000 this past month. It's been climbing as interest rates come down, and it got a particularly big boost following Trump's election. He's turned around and become a fan of crypto, and he's named a former regulator who’s seen as friendly to digital currencies as the next chair of the Securities and Exchange Commission, replacing someone who critics said was overly aggressive in his oversight. Bitcoin was below $17,000 just two years ago following the collapse of crypto exchange FTX.

Gold's rise for the year, as it also hit records and had as strong a run as U.S. stocks. Wars around the world have helped drive demand for investments seen as safe, such as gold. It's also benefited from the Fed's cut to interest rates. When bonds are paying less in interest, they pull away fewer potential buyers from gold, which pays investors nothing.

It's a favorite number of Elon Musk, and it's also a threshold that Tesla's stock price passed in December as it set a record. The number has a long history among marijuana devotees, and Musk famously said in 2018 that he had secured funding to take Tesla private at $420 per share. Tesla soared this year, up from less than $250 at the start, in part because of expectations that Musk's close relationship with Trump could benefit the company.

That's how much revenue Nvidia made in the nine months through Oct. 27, showing how the artificial-intelligence frenzy is creating mountains of cash. Nvidia's chips are driving much of the move into AI, and its revenue through the last nine months catapulted from less than $39 billion the year before. Such growth has boosted Nvidia's worth to more than $3 trillion in total.

GameStop’s gain on May 13 after Keith Gill, better known as “Roaring Kitty,” appeared online for the first time in three years to support the video game retailer’s stock, which he helped rocket to unimaginable heights during the “ meme stock craze ” in 2021. Several other meme stocks also jumped following his post in May on the social platform X, including AMC Entertainment. Gill later disclosed a sizeable stake in the online pet products retailer Chewy, but he sold all of his holdings by late October.

That's how much the U.S. economy grew, at annualized seasonally adjusted rates, in each of the three first quarters of this year. Such growth blew past what many pessimists were expecting when inflation was topping 9% in the summer of 2022. The fear was that the medicine prescribed by the Fed to beat high inflation — high interest rates — would create a recession. Households at the lower end of the income spectrum in particular are feeling pain now, as they contend with still-high prices. But the overall economy has remained remarkably resilient.

This is the vacancy rate for U.S. office buildings — an all-time high — through the first three quarters of 2024, according to data from Moody's. The fact the rate held steady for most of the year was something of a win for office building owners, given that it had marched up steadily from 16.8% in the fourth quarter of 2019. Demand for office space weakened as the pandemic led to the popularization of remote work.

That’s the total number of previously occupied homes sold nationally through the first 11 months of 2024. Sales would have to surge 20% year-over-year in December for 2024′s home sales to match the 4.09 million existing homes sold in 2023, a nearly 30-year low. The U.S. housing market has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. A shortage of homes for sale and elevated mortgage rates have discouraged many would-be homebuyers.

For Makenzie Gilkison, spelling is such a struggle that a word like rhinoceros might come out as “rineanswsaurs” or sarcastic as “srkastik.”

The 14-year-old from suburban Indianapolis can sound out words, but her dyslexia makes the process so draining that she often struggles with comprehension. “I just assumed I was stupid,” she recalled of her early grade school years.

But assistive technology powered by artificial intelligence has helped her keep up with classmates. Last year, Makenzie was named to the National Junior Honor Society. She credits a customized AI-powered chatbot, a word prediction program and other tools that can read for her.

“I would have just probably given up if I didn’t have them,” she said.

Artificial intelligence holds the promise of helping countless other students with a range of visual, speech, language and hearing impairments to execute tasks that come easily to others. Schools everywhere have been wrestling with how and where to incorporate AI, but many are fast-tracking applications for students with disabilities.

Getting the latest technology into the hands of students with disabilities is a priority for the U.S. Education Department, which has told schools they must consider whether students need tools like text-to-speech and alternative communication devices. New rules from the Department of Justice also will require schools and other government entities to make apps and online content accessible to those with disabilities.

There is concern about how to ensure students using it — including those with disabilities — are still learning.

Students can use artificial intelligence to summarize jumbled thoughts into an outline, summarize complicated passages, or even translate Shakespeare into common English. And computer-generated voices that can read passages for visually impaired and dyslexic students are becoming less robotic and more natural.

“I’m seeing that a lot of students are kind of exploring on their own, almost feeling like they’ve found a cheat code in a video game,” said Alexis Reid, an educational therapist in the Boston area who works with students with learning disabilities. But in her view, it is far from cheating: “We’re meeting students where they are.”

Ben Snyder, a 14-year-old freshman from Larchmont, New York, who was recently diagnosed with a learning disability, has been increasingly using AI to help with homework.

“Sometimes in math, my teachers will explain a problem to me, but it just makes absolutely no sense,” he said. “So if I plug that problem into AI, it’ll give me multiple different ways of explaining how to do that.”

He likes a program called Question AI. Earlier in the day, he asked the program to help him write an outline for a book report — a task he completed in 15 minutes that otherwise would have taken him an hour and a half because of his struggles with writing and organization. But he does think using AI to write the whole report crosses a line.

“That’s just cheating,” Ben said.

Schools have been trying to balance the technology’s benefits against the risk that it will do too much. If a special education plan sets reading growth as a goal, the student needs to improve that skill. AI can’t do it for them, said Mary Lawson, general counsel at the Council of the Great City Schools.

But the technology can help level the playing field for students with disabilities, said Paul Sanft, director of a Minnesota-based center where families can try out different assistive technology tools and borrow devices.

“There are definitely going to be people who use some of these tools in nefarious ways. That’s always going to happen,” Sanft said. “But I don’t think that’s the biggest concern with people with disabilities, who are just trying to do something that they couldn’t do before.”

Another risk is that AI will track students into less rigorous courses of study. And, because it is so good at identifying patterns, AI might be able to figure out a student has a disability. Having that disclosed by AI and not the student or their family could create ethical dilemmas, said Luis Pérez, the disability and digital inclusion lead at CAST, formerly the Center for Applied Specialized Technology.

Schools are using the technology to help students who struggle academically, even if they do not qualify for special education services. In Iowa, a new law requires students deemed not proficient — about a quarter of them — to get an individualized reading plan. As part of that effort, the state’s education department spent $3 million on an AI-driven personalized tutoring program. When students struggle, a digital avatar intervenes.

More AI tools are coming soon.

The U.S. National Science Foundation is funding AI research and development. One firm is developing tools to help children with speech and language difficulties. Called the National AI Institute for Exceptional Education, it is headquartered at the University of Buffalo, which did pioneering work on handwriting recognition that helped the U.S. Postal Service save hundreds of millions of dollars by automating processing.

“We are able to solve the postal application with very high accuracy. When it comes to children’s handwriting, we fail very badly,” said Venu Govindaraju, the director of the institute. He sees it as an area that needs more work, along with speech-to-text technology, which isn’t as good at understanding children’s voices, particularly if there is a speech impediment.

Sorting through the sheer number of programs developed by education technology companies can be a time-consuming challenge for schools. Richard Culatta, CEO of the International Society for Technology in Education, said the nonprofit launched an effort this fall to make it easier for districts to vet what they are buying and ensure it is accessible.

Makenzie wishes some of the tools were easier to use. Sometimes a feature will inexplicably be turned off, and she will be without it for a week while the tech team investigates. The challenges can be so cumbersome that some students resist the technology entirely.

But Makenzie’s mother, Nadine Gilkison, who works as a technology integration supervisor at Franklin Township Community School Corporation in Indiana, said she sees more promise than downside.

In September, her district rolled out chatbots to help special education students in high school. She said teachers, who sometimes struggled to provide students the help they needed, became emotional when they heard about the program. Until now, students were reliant on someone to help them, unable to move ahead on their own.

“Now we don’t need to wait anymore,” she said.

___

This story corrects that Pérez works for CAST, formerly the Center for Applied Specialized Technology, not the Center for Accessible Technology.

The Associated Press’ education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

A recent survey shows small business owners are feeling more optimistic about the economy following the election.

The National Federation of Independent Businesses’ Small Business Optimism Index rose by eight points in November to 101.7, its highest reading since June 2021.

The Uncertainty Index declined 12 points in November to 98, following October’s pre-election record high of 110.

NFIB Chief Economist Bill Dunkelberg said small business owners became more certain about future business conditions following the presidential election, breaking a nearly three-year streak of record high uncertainty.

“Owners are particularly hopeful for tax and regulation policies that favor strong economic growth as well as relief from inflationary pressures,” he said in a statement. “In addition, small business owners are eager to expand their operations.”

The net percent of owners expecting the economy to improve rose 41 points from October to a net 36%, the highest since June 2020.

Some owners are also hoping 2025 will be a good time to grow. The percent of small business owners believing it is a good time to expand their business rose eight points to a 14%. This is also the highest reading since June 2021.

While inflation has eased, it remains a top concern for owners. Twenty percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs). It surpassed labor quality as the top issue by one point.

Tech companies led a broad rally for U.S. stocks Tuesday, a boost for the market in a holiday-shortened trading session before the Christmas break.

The S&P 500 rose 0.7%. The Dow Jones Industrial Average was up 177 points, or 0.4%, as of 11:20 a.m. Eastern time. The tech-heavy Nasdaq composite was up 1%.

Chip company Broadcom rose 2.6%, while semiconductor giant Nvidia, whose enormous valuation gives it an outsize influence on indexes, rose 1.1%. Super Micro Computer jumped 4.6%.

Tesla climbed 5.2% for the biggest gain among S&P 500 stocks. Amazon.com rose 1.5%

American Airlines slipped 0.4% after the airline briefly grounded flights nationwide due to a technical issue.

U.S. Steel edged up 0.1% a day after an influential government panel failed to reach consensus on the possible national security risks of the nearly $15 billion proposed sale to Nippon Steel of Japan.

NeueHealth surged 70.1% after the health care company agreed to be taken private in a deal valued at roughly $1.3 billion.

Treasury yields rose in the bond market. The yield on the 10-year Treasury rose to 4.62% from 4.59% late Monday.

European markets were mostly higher. Markets in Asia mostly gained ground.

U.S. markets will close at 1 p.m. Eastern and stay closed Wednesday for Christmas.

Wall Street has several economic reports to look forward to this week, including a weekly update on unemployment benefits on Thursday.

Tuesday’s rally comes as the stock market enters what’s historically been a very cheerful season. The last five trading days of each year, plus the first two in the new year, have brought an average gain of 1.3% since 1950. The so-called “Santa rally” also correlates closely with positive returns in January and the upcoming year.

So far this month, the U.S. stock market has lost some of its gains since President-elect Donald Trump’s win on Election Day, which raised hopes for faster economic growth and more lax regulations that would boost corporate profits. Worries have risen that Trump’s preference for tariffs and other policies could lead to higher inflation, a bigger U.S. government debt and difficulties for global trade.

Even so, the stock market remains on pace to deliver strong returns for 2024. The benchmark S&P 500 is up about 26% so far this year and remains within roughly 1.3% of the all-time high it set earlier this month — its latest of 57 record highs this year.