Gas is back in the driver’s seat.

Ford sold 2.2 million vehicles in the US last year, a 6% increase from 2024 and its strongest annual performance since 2019. The company finished the year as the third-largest automaker in the US, trailing Toyota Motor and General Motors. Shares are up 2.45% today.

The gains came from the old playbook: Gas-powered vehicles accounted for roughly 86% of sales, while hybrid volumes climbed nearly 22%. EVs moved in the opposite direction: Ford’s electric vehicle sales fell 14.1% for the year, capped by a roughly 52% plunge in the fourth quarter.

EV demand decelerates

Ford’s sales mix underscores a broader EV cooldown. In the US, demand is entering an “EV winter,” with a meaningful rebound unlikely until 2027–2028, Boston Consulting Group’s global lead for EVs and energy storage Nathan Niese told Bloomberg.

Policy headwinds are accelerating the slowdown. The rollback of fuel-economy standards and the loss of $7,500 in EV tax credits have weighed on demand, with BloombergNEF expecting EV sales growth of just 12% from 2025, well below the 23% pace seen last year.

The pullback isn’t just a US story. China, the world’s largest EV market, is also cooling as government support fades, and even industry leaders are feeling it. BYD, which recently overtook Tesla as the world’s top EV seller, posted its weakest annual sales growth since 2020, a notable signal for the sector.

The road ahead

Automakers are recalibrating for a slower, more selective EV market. Ford has taken $19.5 billion in charges tied to a major overhaul of its EV strategy, including scrapping the electric F-150 Lightning pickup and shifting investment back toward gas and hybrid vehicles. The reset reflects years of losses in EVs, but Ford says the changes put its electric business on track to reach profitability by 2029.

At the same time, the EV pullback is reshaping where investment is flowing across the auto ecosystem. As EV expansion slows, spending is shifting toward automation and software. One player joining that shift is Nvidia, which is pushing deeper into autonomous driving, rolling out new AI models and software platforms to help vehicles navigate complex driving environments.

EVs face a tough year ahead, and investors should brace for a bumpy ride.—SY

🟢 What’s up

• Shake Shack rose 7.61% after Deutsche Bank upgraded the stock to Buy from Hold, citing upside from increased traffic tied to the forthcoming World Cup.
• Sandisk jumped 27.56% after enthusiasm from Nvidia’s CES keynote boosted optimism around AI-driven demand for memory storage. Fellow storage stocks jumped as well, including Seagate Technology (up 14%) and Western Digital (up 16.77%).
• Speaking of Nvidia, Aeva Technologies soared 34.38% after the LIDAR maker was picked to help the semiconductor king build its self-driving platform.
• Microchip Technology climbed 11.65% after issuing stronger-than-expected fiscal third-quarter revenue guidance.
• Enterprise finance platform OneStream surged 28.39% after agreeing to be acquired by Hg Capital for $6.4 billion, a 31% premium to Monday’s close.
• Veeva Systems gained 7.47% after announcing a $2 billion share buyback.
• Vistra Corp rose 4.05% after unveiling a $4 billion acquisition of Cogentrix Energy, aimed at meeting surging electricity demand from AI data centers.

What’s down

• Data-center cooling stocks slid after comments from Nvidia CEO Jensen Huang raised concerns about future data-center demand: Trane Technologies lost 2.52%, Modine Manufacturing dropped 7.44%, and Johnson Controls tumbled 6.26%.
• SoFi Technologies fell 7.84% after Bank of America resumed coverage with an Underperform rating.
• American International Group slipped 7.48% after CEO Peter Zaffino said he will step down by mid-year and transition to executive chair.
• Adidas AG fell 4.13% after Bank of America Securities warned competition from Nike could pressure growth.
• Credit score stocks sank thanks to comments from FHFA Director Bill Pulte on X about their pricing models. TransUnion lost 4.83%, Equifax fell 3.81%, and Experian dropped 1.85%.

Wall Street may have brushed off bitcoin years ago, but like a regretful ex, old-school finance firms are pulling out all the stops to win crypto investors back.

Bitcoin got another blue-chip stamp of approval from a legacy Wall Street bank today when Morgan Stanley filed with the SEC to launch exchange-traded funds holding bitcoin and solana. While major asset management firms like BlackRock and Fidelity currently offer investors a slew of crypto ETF products, Morgan Stanley would be the first major bank to leap headfirst into the crypto fund space if the funds are approved by the SEC.

The move comes at a time when the regulatory environment for crypto is so friendly it barely looks like regulation at all, which has led to an avalanche of crypto ETFs seeking SEC approval.

The big picture: A few short years ago, it felt like most on Wall Street just saw bitcoin investors as those weird guys stuck in their parents’ basement. But when firms saw the size of their wallets, basements or not, the vibe shifted. For example, while BlackRock’s spot bitcoin ETF only launched in January 2024, as of October 2024 it had become BlackRock’s most profitable ETF, generating approximately $244.5 million in annual revenue for the firm, according to Bloomberg.

For investors, owning an ETF that tracks crypto is generally easier and more accessible than holding it in a digital wallet. But, as we’ve learned from bitcoin’s 15.45% decline over the past six months, there’s no way to avoid crypto volatility—even if it’s tucked away in an ETF.—LB

We don’t own a crystal ball (if we did, we would have bought silver last January). But we do own a calendar, and for investors prepping for the year ahead, that should be enough.

Geopolitics are set to dominate headlines and move markets in 2026, with the US striking Venezuela, President Trump making threats about Greenland, and the war between Ukraine and Russia continuing.

But the most serious disruption may be taking place right here at home. Take a look at a few of the potential political highlights of the coming year, and how they might throw your portfolio out of whack if you’re unprepared:

• The US Supreme Court could issue a ruling on Trump’s tariffs as soon as Friday. Justices seemed to seriously question the president’s use of the International Emergency Economic Powers Act to enact Liberation Day tariffs when they heard oral arguments in November, and while the government has some alternative options if the court rules against it, such a ruling would seriously undermine the president’s power and potentially force billions of dollars in refunds.
• The longest government shutdown in history seemingly just ended, but we’re already staring down the barrel of yet another one. Congress convened this week to begin debating a funding bill before the deadline on January 30, and while another shutdown likely wouldn’t be as expensive as the last, it will still still disrupt the livelihood of tens of thousands of Americans.
• Jerome Powell’s latest term as Federal Reserve chair ends on May 15, and it’s pretty clear Trump will replace him ASAP. The question is who will take the throne (frontrunners include Kevin Hassett, Kevin Warsh, and Christopher Waller), and how the market will react to the new head honcho.
• Trump signed a free trade agreement with Mexico and Canada during his first term in office, but that deal is up for review in July. Given Trump’s noted dislike of free trade in general, and ongoing trade tensions with these two countries in particular, investors should brace themselves for the sort of economic disruption they haven’t seen since Liberation Day.
• Don’t forget that we’ve got midterm elections in November. This may be the most important point for investors: Midterm years aren’t usually good ones for the S&P 500, but the months that follow Election day are historically fantastic.

The US is celebrating its 250th birthday this year, and considering the calendar above, it’s going to be one doozy of an anniversary.—MR

• Nineteen states raised their minimum wage this month, giving 8.3 million workers a pay bump.
• Meta Platforms paused the international rollout of its smart Ray-Bans after being overwhelmed by demand from US consumers.
• Saudi Arabia opened its stock market to all foreign investors, reversing its policy of restrictions on specific international investors.
• Another ‘W’ for the robots: Utah is now letting AI write some medical prescriptions.
• Recent high-profile, massive bets on prediction markets are raising questions about their integrity.
• Fashion fail: The heyday of casual footwear is over, according to Bank of America. Here are the stocks that are feeling the pain.
• Departing NYC Mayor Eric Adams says he plans to fix antisemitism, violence and the education system all with—you guessed it—crypto.

A slow start to the week gives way to several days of labor market data beginning with tomorrow’s Job Openings and Labor Turnover Survey. Economists expect to see 7.7 million job openings through the end of November, or just about one job opening for every unemployed American. As if that wasn’t enough, we’ll also get a look at private payrolls from ADP.

We’ll also catch a glimpse of how the services sector performed in December with the ISM Services report.

As for earnings, the early reporters begin to trickle in with announcements from Albertsons, Cal-Maine Foods, Constellation Brands, and Jefferies Financial Group.