Stock Futures Sink, Gold Sets New Record High After DOJ Opens Probe Into Fed Chair Powell

It’s President Trump’s Second Year. Here’s What That Could Mean for Stocks in 2026

7 minutes ago

Could the second year of President Donald Trump’s second term buck theories suggesting headwinds for stocks? The data points to the likelihood of tough times ahead—but history doesn’t tell the whole story.

The second year of a presidential term tends to be the weakest of the four-year cycle, if the “Presidential Election Cycle Theory” is to be believed. The theory, coined by Stock Trader’s Almanac founder Yale Hirsch, holds that U.S. stocks tend to perform relatively poorly in the first year following a presidential election, with an even weaker second year, before a stronger second half of the term. 

Early reactions to new policies aimed at fulfilling campaign promises, along with political uncertainty heading into midterm elections, have been posited as explanations for trends pointing to weaker performance in the first half of a term. Efforts to shore up the economy and gain influence ahead of the next election are typically seen as helping returns in the second half.

Bank of America analysts warned clients last week that historical returns supporting the theory would suggest market underperformance this year, before likely giving way to a stronger 2027.

Since 1940, the S&P 500 has risen an average of 4.2% in the second years of presidential terms, compared to an average annual gain of about 9% over the full period, the analysts observed. Most of that relative pressure could come heading into midterms, the analysts said, even with the possibility that the fourth quarter of 2026 could bring a Santa Claus rally, lifting markets to close out the year.

Read the full article here.

–Kara Greenberg

Sun Country Airlines Stock Pops After Allegiant Buys Fellow Budget Carrier

1 hr 11 min ago

Investors see sunshine for Sun Country Airlines Holdings (SNCY) stock.

Sun Country shares soared 13% in premarket trading Monday, a day after the airline agreed to combine with fellow ultra-low-cost carrier Allegiant Travel Company (ALGT) to “create a leading leisure-focused U.S. airline.”

Las Vegas-based Allegiant will acquire Minneapolis-based Sun Country for $1.5 billion in cash and stock, including $400 million of net debt. Allegiant stock reversed earlier gains and were down 3% before the bell.

Upon closing, which is expected in the second half of 2026, Allegiant and Sun Country shareholders would own about 67% and 33%, respectively, of the combined company, which would continue under the Allegiant name. Each would operate separately until they obtain a single operating certificate from the Federal Aviation Administration.

Allegiant CEO Gregory Anderson would serve as the combined company’s CEO, while Sun Country CEO Jude Bricker would join the board and serve as an advisor to Anderson. The new company would be headquartered in Las Vegas but would “maintain a significant presence in Minneapolis-St. Paul,” according to the release announcing the deal.

“Allegiant and Sun Country are well positioned to create one of the most adaptable and resilient airline models in the industry, with the ability to respond quickly to changing market conditions, traveler demand, and charter and cargo partner needs,” the release said. “The combination of two financially strong leisure carriers in the U.S. will create benefits for customers, communities, employees, and partners by enhancing stability, expanding opportunities, and enabling continued investment and innovation.”

The deal likely would not face substantial regulatory concern, as the carriers have served different markets. Allegiant flies routes with little competition from small cities, while Sun Country handles cargo flights for Amazon (AMZN), charter routes, and scheduled flights across the U.S. and to international destinations in Mexico, Canada, Central America, and the Caribbean.

Stock Futures Sink, Gold Sets New Record High After DOJ Opens Probe Into Fed Chair Powell

2 hr 7 min ago

Futures contracts associated with the Dow Jones Industrial Average pointed down 0.7%.

S&P 500 futures declined 0.6%.

Nasdaq 100 futures were 0.8% lower.