Investopedia Markets News (all except PF)

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Walmart will soon join the Nasdaq 100, an index known for hosting tech stocks.

Key Takeaways

• Walmart is slated to join the Nasdaq 100, an index known for tracking tech stock, on Jan. 20, Nasdaq said.
• The planned move comes as Walmart executives have focused on the retailer's e-commerce platform and novel AI tools.

Walmart is getting the recognition it’s been seeking for its e-commerce prowess.

The retail giant will move to the Nasdaq 100—an index tracking the 100 largest non-financial companies on the Nasdaq —before the market opens on Jan. 20, the exchange operator said Friday. Walmart (WMT) has spent months highlighting its marketplace and delivery services, fueling speculation that it was eyeing the list seen as a tech-sector bellwether.

Walmart will replace pharmaceutical company AstraZeneca (AZN). The move comes about a month after Walmart left the New York Stock Exchange for the Nasdaq, which is home to tech giants like  Alphabet (GOOG, GOOGL), Amazon (AMZN) and Meta (META).

Why This News Matters to Investors

Consumer-focused companies from Target to Wingstop have touted their embrace of AI as investors pour money in the technology. Walmart has successfully convinced investors that it's part tech stock, part retailer, and a pending move to the Nasdaq 100 index should bolster that.

The Nasdaq is a better fit for Walmart’s tech-centric approach, company executives have said. The retailer’s business no longer centers around a portfolio of big-box stores, they said, highlighting its booming delivery service, automated fulfillment centers and third-party marketplace.

“The results we're delivering today are powered by our people and by technology,” CEO Douglas McMillon told investors on a November conference call, according to a transcript from AlphaSense.  “We continue to get better at putting our data to work, building more capable tech products, and platforms, and by deploying physical automation.”

McMillon highlighted the “digital acumen” of John Furner, head of Walmart U.S., when announcing in November that Furner will succeed him. Furner will lead the company through an “AI-driven transformation,” McMillon said.

Walmart is using AI to interact with consumers in new ways, including pinging customers on WhatsApp to ask if they want to stock up with a basket of frequently-ordered staples. It announced Sunday that it is working with Google to ensure people can easily find and purchase Walmart products when chatting in Gemini, Google’s AI-powered chat service. The company previously announced a similar arrangement with ChatGPT operator OpenAI. 

"The transition from traditional web or app search to agent-led commerce represents the next great evolution in retail,” Furner said Sunday in a statement. “We aren't just watching the shift, we are driving it."

Enthusiasm about Walmart's digital growth has helped power its shares higher lately. The stock, up more than 3% in recent trading, has added roughly 30% of its value over the past 12 months and is sitting around record highs. Read Investopedia's live coverage of today's trading here.

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President Donald Trump has denied knowledge of the investigation into Fed Chair Jerome Powell.

Key Takeaways

• Gold rose to a record-high $4,640 an ounce on Monday morning following news the Justice Department has launched a criminal investigation related to testimony by Federal Reserve Chair Jerome Powell.
• The investigation renewed investor concerns about the independence of the Fed, which has long been insulated from the influence of elected officials.
• President Donald Trump on Sunday denied knowledge of the investigation.

Gold prices surged to a record high Monday as investors turned to the traditional safe haven amid fresh concerns that the independence of the Federal Reserve could be jeopardized.

The Justice Department on Friday threatened Fed Chair Jerome Powell with criminal indictment related to his testimony before the Senate last June, according to a statement released Sunday. Powell dismissed the Justice Department’s investigation into his testimony as “pretexts” for the White House to resume pressuring the Fed to lower interest rates at the president’s behest. 

“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” said Powell on Sunday. 

Gold futures were up nearly 2.7% at $4,625 an ounce recently, after hitting an all-time high of $4,640 earlier in the day.

The precious metal rallied more than 4% last week, driven in part by investor concerns about sticky inflation and expectations for more interest rate cuts from the Fed this year, according to John Stoltzfus, chief investment strategist at Oppenheimer.

Why This Matters

The loss of the Federal Reserve's independence from political pressure would be a major threat to the legitimacy of U.S. monetary policy, with far-reaching consequences for U.S. Treasury markets and the dollar, two pillars of the global financial system. During times of economic uncertainty, many investors turn to gold as a store of value.

The investigation revealed on Sunday marks the second attempt by the Trump administration to remove a Fed policymaker through prosecution. President Donald Trump tried to fire Fed Governor Lisa Cook last year after accusing her of mortgage fraud. The Supreme Court temporarily blocked her dismissal and is expected to hear arguments in her case next week.

President Trump on Sunday denied allegations that the investigation was part of his efforts to pressure the Fed into lowering interest rates. "I don't know anything about it," Trump told NBC News. "What should pressure him is the fact that rates are far too high," he said. "That’s the only pressure he’s got.”

The Federal Reserve cut interest rates at each of its last three meetings in response to signs of weakness in the labor market. Still, policymakers are deeply divided on how to proceed considering inflation remains above their 2% target. With the central bank's two goals—stable prices and maximum employment—in tension, the majority of investors don't expect the Fed to cut interest rates again until June.

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Delta Air Lines will be the first major airline to report fourth-quarter earnings this month with its results on Tuesday

Key Takeaways

• Airline earnings are set to kick off this week with results from Delta. United Airlines, Alaska Airlines, and others are set to follow later this month.
• Investors and analysts are likely to focus on their outlooks for 2026, and what executives have to say about the state of travel demand.

Investors could get an early peek into the outlook for travel demand this year as major airlines start reporting earnings this week.

Delta Air Lines (DAL) is set to lead the way with its results on Tuesday. Several others will follow later in the month, with United Airlines (UAL) reporting on Jan. 21, Alaska Airlines (ALK) on Jan. 23, and Southwest Airlines (LUV) scheduled for Jan. 29.

UBS analysts told clients last week that investors will likely focus more on forecasts for 2026 than the fourth-quarter results, which were disrupted by a U.S. government shutdown and severe winter weather. They expect airlines could offer relatively bullish outlooks for 2026, helped by lower fuel prices and a likely recovery in demand after the shutdown ended, among other things.

Why This Matters to Investors

Analysts and investors will likely be looking closely for signals of improving demand heading into 2026 following signs of resilience this holiday season, after economic uncertainty stemming from tariffs, inflation, and a weakening labor market weighed on travel demand last year.

Earnings and comments from executives across a wide swath of industries last year revealed that many Americans are feeling pressured financially, which has impacted travel demand. Higher-income consumers have largely kept spending, however, leading airlines such as Delta to grow their premium products.

Bank of America analysts suggested these "K-shaped" spending trends could continue, with higher-income consumers likely to drive sales, as premium revenue outpaces basic cabin growth.

Analysts at Morgan Stanley said airlines could be cautious in their outlooks for 2026, writing they "might be wary of showing an overly optimistic hand and might look to beat conservative guides through the year instead."

Investopedia / Federal Reserve

The Trump administration has been pressuring the central bank to cut interest rates more dramatically.

Key Takeaways

• The Federal Reserve received subpoenas in a criminal investigation of Fed Chair Jerome Powell on Friday related to his testimony in June about a renovation at the Fed's headquarters.
  
• The investigation appears to be an escalation of Trump's efforts to force Powell out of his job at the independent central bank.
  
• Powell called the investigation a pretext and a threat to the independence of the Fed, which is not under direct control of the White House.
  

In an unprecedented move, Federal Reserve Chair Jerome Powell accused President Donald Trump's administration of waging an intimidation war against the nation's independent central bank.

Powell's remarks, issued in a video released Sunday by the Fed, came after the Department of Justice launched a criminal investigation of Powell on Friday and issued Grand Jury subpoenas related to his testimony to the Senate in June about renovations at the Fed's headquarters.

The investigation is the latest move in an ongoing campaign by Trump to take charge of the Fed, which was set up by Congress to be independent from direct control of the White House. Trump has repeatedly demanded the Fed dramatically lower its key interest rate. Powell and the other members of the Fed's policy committee have lowered rates gradually to support the job market, but have avoided slashing them as much as Trump wants out of concern that setting rates too low could stoke inflation.

What This Means For The Economy

The investigation of Powell could erode the independence of the Federal Reserve, which many economists say is essential to the central bank's ability to keep inflation under control.

Powell Calls Accusations 'Pretexts'

In recent months, Powell has defended the Fed's independence but has avoided commenting directly on Trump's attacks. That changed on Sunday.

In his remarks, Powell said that he would stay on the job despite the investigation and called the accusations against him "pretexts."

"This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings," he added. "The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President."

Trump denied knowledge of the subpoena in an interview with NBC on Sunday.

Former Fed Chairs Condemn Probe

All three living former Fed chairs, Janet Yellen, Ben Bernanke and Alan Greenspan, signed a statement condemning the investigation.

"The Federal Reserve’s independence and the public’s perception of that independence are critical for economic performance, including achieving the goals Congress has set for the Federal Reserve of stable prices, maximum employment, and moderate long-term interest rates," the statement said.

"The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence. This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly. It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success."

The statement was also signed by several former Treasury secretaries of both parties as well as prominent economists.

The Latest in a Series of Threats to Powell

Trump's pressure campaign has included insults and threats to fire Powell, as well as an investigation against and attempt to fire Fed governor Lisa Cook over unproven allegations that she falsified mortgage documents.

"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation," Powell said Sunday.

In August, Treasury Secretary Scott Bessent said the Fed should lower its key interest rate by at least 1.5 percentage points. Since then, the Fed has cut its rate by 0.75 percentage point, half of what Bessent asked for. The central bank is expected to hold off on any more rate cuts at its next meeting in late January to see how the economy responds to the cuts so far.

Fed officials have voiced concerns that Trump's economic policies, including his far-reaching tariffs, have slowed the job market and pushed up inflation, hindering the Fed's dual mandate from Congress to keep inflation low and employment high.

Trump Faces Backlash Within Party

The administration's intensified attack on Powell sparked a backlash even in Trump's own party. Senator Thom Thillis of North Carolina, who serves on the banking committee, said he would oppose Trump's Fed nominees until the legal matter was resolved.

"If there were any remaining doubt whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none," Thillis posted on the X social media platform. "It is now the independence and credibility of the Department of Justice that are in question."

Trump appointed Powell to the role of Fed chair during his first term in office, and President Joe Biden re-appointed him in 2022. The two have frequently disagreed over interest rate policy, and Powell has long resisted Trump's calls for lower rates.

Powell's term as chair expires in May, at which point the job will go to a Trump-nominated successor, subject to approval by the Senate. After that, Powell could stay on the Fed's leadership as a member of the Fed's seven-member board of governors. He has not said if he will do so.

Update, Jan. 12, 2026—This story has been updated to include the joint statement of former Fed chairs condemning the investigation.

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Shares of Sun Country Airlines rose Monday on news of a deal to merge with Allegiant.

Key Takeaways

• News that Sun Country planned to merger with fellow low-cost airline Allegiant lifted the former's shares today.
• Analysts approved of the move, calling it a "merger of two equally well-run low-fare airlines."

Investors see sunshine for Sun Country Airlines stock following news that it plans to merge with another ultra-low-cost carrier.

Sun Country (SNCY) shares were up some 12% 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." Allegiant's stock was down about 6%. (Read Investopedia's live coverage of today's trading here.)

Las Vegas-based Allegiant will acquire Minneapolis-based Sun Country for $1.5 billion in cash and stock, including $400 million of net debt.

The deal might not not be the last move to consolidate the domestic low-cost space. Spirit Airlines owner Spirit Aviation (FLYY) entered the Chapter 11 restructuring process for the second time in less than a year in late August. Frontier Group (ULCC), the parent of Frontier Airlines, replaced longtime CEO Barry Biffle last month amid a sharply declining stock price.

Why This Matters to Investors

The deal, which would merge two low-cost air carriers, could herald more merger activity in the sector. Investors applauded the news that Sun Country and Allegiant planned to merge, with the companies seen as reliably profitable and serving complimentary markets.

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 keep "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 deal may 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.

Deutsche Bank analysts called the deal a "merger of two equally well-run low-fare airlines" with reliably solid margins. "As two of the industry's most profitable airlines, we view them as 'equals,' particularly as they are the only two low-fare carriers that have been consistently profitable," they wrote.

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President Donald Trump over the weekend proposed capping credit card interest rates

Key Takeaways

• Bank stocks fell Monday after President Donald Trump said over the weekend that credit card interest rates should be capped at 10% for at least a year.
• How a cap would be put in place and why for only a year remains unclear.

A number of banking and financial stocks slumped Monday after President Donald Trump over the weekend suggested capping credit card interest rates.

Trump posted on social media late Friday that Americans are being "ripped off" by interest rates of 20% to 30%, and said that effective Jan. 20 he would be calling for a one-year cap of 10%. How the cap would be implemented remains unclear.

Capital One Financial (COF) shares plunged over 6% Monday, while shares of American Express (AXP) dropped 4%, and Citigroup (C) fell 3%. JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC) each slid about 1%. Shares of Synchrony Financial (SYF) declined over 8%, with Visa (V) and Mastercard (MA) losing about 2%.

Why This Matters to You

Capping credit card interest rates may negatively impact firms that issue cards, but could lower the cost of borrowing for some consumers.

Executives from several of those institutions will get a chance to respond to that idea this week as big banks kick off earnings season, starting with JPMorgan on Tuesday.

Financial stocks may also be feeling the impact of concerns about the Trump administration's latest pressure on the Federal Reserve, which sets the target federal funds rate that influences rates on a wide range of consumer loans. Late Sunday, Fed Chair Jerome Powell said the central bank received subpoenas on Friday for a grand jury investigation into his testimony to Congress last year about the Fed's renovation that has been the subject of attacks from Trump. Powell said the investigation is politically motivated and comes after the Fed did not lower rates as quickly as the president wanted.

This article has been updated since it was first published to reflect more recent stock values.

News of the day for Jan. 12, 2026

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President Donald Trump has been highly critical of Federal Reserve Chair Jerome Powell for not lowering interest rates more aggressively.

Stock futures are losing ground this morning as investors digest news the Trump administration is investigating Federal Reserve Chair Jerome Powell; the Fed Chair said in a video statement late Sunday that the Justice Department has subpoenaed the Fed and is threatening criminal charges over his Senate testimony regarding the renovation of the Fed building; the uncertainty around potential threats to the Fed's independence is helping to drive gold prices to new record highs; shares of financial services companies are falling after a proposal from President Trump to cap credit card interest rates; and Walmart stock is rising after the retail giant announced a new partnership with Google to integrate Walmart and Sam's Club products into Google's Gemini AI chatbot. Here's what you need to know.

Stocks Point Lower Amid Renewed Pressure on Fed Chair Powell

Stock futures are pointing to a lower open as investors react to a new wave of uncertainty around the independence of the Federal Reserve. (more below) Futures tied to the S&P 500 were down 0.5% recently, while those linked to the Dow Jones Industrial Average and the Nasdaq dropped 0.6% and 0.7%, respectively. The Dow and S&P 500 are pulling back ahead of a busy week of earnings reports after closing at record highs to end last week. Gold futures surged to a record high amid the Fed uncertainty, and were recently up more than 2% at around $4,600 an ounce. The yield on the 10-year Treasury note, which affects borrowing costs on all sorts of consumer loans, was at 4.21%, up from 4.17% at Friday's close and trading at its highest level since early September. Bitcoin was at $90,600, down from an overnight high of around $92,300.

DOJ Opens Investigation Into Powell Over Testimony on Fed Renovation

Federal Reserve Chair Jerome Powell said in a statement Sunday night that the Fed received grand jury subpoenas from the DOJ on Friday regarding potential criminal charges. The subpoenas are related to Powell's testimony to Congress last year about Fed building renovations that President Trump has criticized Powell for previously. In a video statement, Powell said the investigation is not actually about the renovation. "The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President," Powell said. Trump spent months attacking Powell last year for not lowering interest rates as much as he thought they should be lowered, which Trump said was hurting the economy. Powell said Sunday that the outcome of this investigation will determine whether the Fed will maintain its independence and set rates based on economic evidence, or "whether instead monetary policy will be directed by political pressure or intimidation."

Gold Jumps to New Record Highs Amid Fed Uncertainty

Gold prices are surging this morning as investors turn to safe haven investments following the news of the DOJ investigation into Powell. Gold futures were up 2.3% at $4,605 an ounce recently, trading at all-time-high levels. Concerns that the independence of the Fed were among the many factors that helped drive the price of gold to a number of record highs last year. Gold typically does well in times of uncertainty, as investors look to put their money in safer long term assets like gold rather than more volatile investments like stocks. The precious metal was already rising to start the year thanks to renewed geopolitical uncertainty after the Trump administration's military operation in Venezuela and concerns over whether the U.S. could get involved in deadly protests in Iran.

Financial Stocks Sink as Trump Suggests Cap on Credit Card Interest Rates

Shares of several financial services companies are sliding Monday after President Trump over the weekend suggested that credit card interest rates should be capped. Trump said on social media late Friday that Americans are being "ripped off" by rates of 20% to 30%, and said that effective Jan. 20 he would be calling for a one-year cap of 10%. Why the cap would be one-year long and how the cap would be accomplished remain unclear, but the idea is still affecting shares of credit card companies in premarket trading. Capital One Financial (COF) stock dropped 7%, while Citigroup (C) and American Express (AXP) were each down about 4%, and JPMorgan Chase (JPM), Bank of America (BAC) and Wells Fargo (WFC) also lost ground. Executives from several of those institutions will get a chance to respond to that idea this week as the big banks kick off the new quarterly earnings season, starting with JPMorgan on Tuesday.

Walmart Shares Jump on News of Google Gemini Partnership

Walmart (WMT) shares are rising after the retail giant announced a new partnership with Alphabet's (GOOGL) Google over the weekend. Users in the Gemini app will soon start to receive Walmart and Sam's Club products as part of their search results when they ask for things like recommendations for camping equipment. The companies said that customers will be able to navigate from Gemini to Walmart to buy products, and will be able to link their Walmart and Gemini accounts to get recommendations and other benefits. Walmart shares were up more than 3% in recent premarket trading, poised to open at what would be a new record high. The deal is the latest tech-focused step for Walmart, which has worked to implement new tech features in its app and automation across its distribution centers, and even moved its stock listing to the Nasdaq Exchange last month.

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JPMorgan Chase CEO Jamie Dimon's post-earnings remarks are closely watched by investors.

Big Bank earnings, inflation data, and corporate and economic reports highlight this week’s calendar.

Many top financial institutions are scheduled to kick off earnings season in the days ahead, including JPMorgan, Wells Fargo, Morgan Stanley and Goldman Sachs. Reports from Delta Air Lines and Taiwan Semiconductor will also be in the spotlight, showcasing the health of the consumer and the tech sector.

Investors will also be watching December inflation data, along with reports on retail sales, new and existing home sales, and the U.S. budget deficit.

Read to the bottom for our calendar of key events—and one more thing.

JP Morgan Leads Bank Earnings, TSMC Highlights AI Trade

Earnings season for the fourth quarter of 2025 effectively starts Tuesday with the year-end report from JP Morgan Chase, the U.S.’s largest bank, which said last week that it would become the next issuer of the Apple Card. Banks in the prior quarter reported solid results across the board, with analysts saying they were poised to see more improvement to close out the year. 

Despite the positive results last quarter, JP Morgan CEO Jamie Dimon warned that the U.S. economy was facing continued uncertainty. Wells Fargo, which said that it could see slower growth in its net interest income for the year, reports Wednesday. The nation’s oldest bank, BNY Mellon, and investment banking giant Goldman Sachs are also reporting.

Taiwan Semiconductor earnings will show whether chipmakers can continue to drive strong revenue growth amid surging demand for artificial intelligence chips. Delta Air Lines earnings will shine a light on travel after airlines experienced disruptions during the government shutdown last year, potentially slowing the recovery after a slow spring. 

Inflation Data Comes Amid Interest-Rate Uncertainty

Inflation data is due Tuesday with the release of December's Consumer Price Index, which showed price pressures slowing to 2.7% in its prior report. A delayed report from October and November on wholesale inflation could further show how pricing changes are impacting the economy. 

The data will be eyed by Federal Reserve officials, who are divided over whether to cut interest rates at the central bank's next meeting in late January. Several Fed officials are scheduled to speak this week, potentially providing signals regarding the Fed's direction.

Retail sales data for November will provide insight into the 2025 holiday shopping season, as consumer activity continues to help power the U.S. economy. Delayed new home sales reports for September and October are among the housing-data reports expected as home sales have stalled amid persistent affordability challenges. The budget deficit report will provide an update on tariff collection levels.

Quick Links: Recap Last Week’s Trading | Read Investopedia’s Latest News

This Week’s Calendar

Monday, Jan. 12

• Federal Reserve Officials Speaking: Richmond Fed President Tom Barkin

Tuesday, Jan. 13

• Consumer Price Index (December)
• Other Data to Watch: New home sales (October, September), NFIB small business optimism index (December), U.S. budget deficit (December)
• Federal Reserve Officials Speaking: Richmond Fed President Tom Barkin, St. Louis Fed President Alberto Musalem
• Key Earnings: JP Morgan Chase (JPM), Bank of New York Mellon (BK), Delta Air Lines (DAL)

Wednesday, Jan. 14

• U.S. retail sales (November)
• Other Data to Watch: Producer Price Index (November), Business inventories (October), Existing home sales (December), Federal Reserve Beige Book 
• Fed Officials Speaking: Minneapolis Fed President Neel Kashkari, New York Fed President John Williams, Atlanta Fed President Raphael Bostic, Philadelphia Fed President Anna Paulson
• Key Earnings: Bank of America (BAC), Wells Fargo (WFC), Citigroup (C)

Thursday, Jan. 15

• U.S. import/export prices (November)
• Other Data to Watch: Initial jobless claims (Week ending Jan. 10), Empire state manufacturing survey (January), Philadelphia Fed manufacturing survey (January)
• Fed Officials Speaking: Richmond Fed President Tom Barkin
• Key Earnings: Taiwan Semiconductor (TSM), Morgan Stanley (MS), Goldman Sachs (GS), BlackRock (BLK), JB Hunt Transport Services (JBHT)

Friday, Jan. 16

• Industrial production/capacity utilization (December)
• Key Earnings: PNC Financial Services (PNC), State Street (STT), M&T Bank (MTB), Regions Financial (RF)

One More Thing

The next round of smart glasses are likely to be “mind blowing”—and powered by AI. Investopedia’s Sarina Trangle has more on the advancements expected from the emerging smart glasses product line.

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The second year of a presidential term is historically not a great one for stocks.

Key Takeaways

• The second year of a president’s term can mean comparatively bad news for stocks, according to the “Presidential Election Cycle Theory” coined by Stock Trader’s Almanac founder Yale Hirsch.
• Bank of America analysts warned clients this week that historical returns would suggest some pressure this year before a stronger 2027.   

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.

Why This Matters to Investors

Seasonality in America's election cycle hasn’t historically favored the second year of a president’s term. That history might worry some investors, though markets could defy the trend—as they did in the first year of President Trump's second term.

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.

The bank's current target of 7100 for the S&P 500 at the end of 2026 would suggest a roughly 4% return for the year, well below the benchmark index's long-term average.

Then again, the end of 2025 failed to deliver a Santa Claus rally for investors—and the first year of President Trump's second term proved to be a relatively strong one for U.S. markets, with the S&P 500 logging a 16% gain.

Both outcomes defied broad market theories, reinforcing the importance of another well-known market adage that past performance does not guarantee future results.

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In a social media post late Thursday, Trump highlighted the number of private sector jobs created in the first year of his second term.

Key Takeaways

• President Donald Trump posted a graph on social media Thursday night that revealed information about the as-yet-unpublished jobs report scheduled for Friday morning.
  
• The Bureau of Labor Statistics tries to prevent early release of information to ensure no one gains an unfair trading advantage from the data.
  
• The White House said the early release was inadvertent, and it was taking steps to prevent it from happening again.
  

If you wanted to know how the jobs market was doing at the end of the year, you could have waited until Friday morning's highly anticipated December jobs report—or you could have gotten the information early by following President Donald Trump's social media feed.

Late Thursday, about 12 hours before the scheduled release of the data, Trump posted a graph prepared by the Council of Economic Advisors on his Truth Social platform showing job creation figures since January.

When the Bureau of Labor Statistics published the official jobs report Friday morning, the data matched what Trump had posted the night before: U.S. employers added just 473,000 jobs from February through December, marking the slowest pace of job creation outside of a recession since 2003. Trump's post highlighted the fact that the private sector had accounted for all new jobs created over the period, while the number of government jobs had fallen sharply.

Why This Is Important

The government's monthly employment report is among the most important data releases for financial markets given the influence it has on the Federal Reserve's decisions about interest rates. An unauthorized release of the data could give certain investors an unfair advantage.

The BLS and other statistical agencies have policies against releasing any data before the official publication time to ensure that everyone gets the information all at once. Data on inflation and job creation, in particular, can move financial markets and is valuable to traders and investors.

The BLS is allowed to give data early to the White House Council of Economic Advisors only under the condition that there is "no release prior to the official release time" according to an OMB directive from 2024.

"Following the regular procedure of presidents being prebriefed on economic data releases, there was an inadvertent public disclosure of aggregate data that was partially derived from pre-released information," a White House official said in an email to Investopedia. "The White House is accordingly reviewing protocols regarding economic data releases."

The incident echoes an episode in 2018 when Trump posted on Twitter that he was "looking forward" to seeing the jobs report, which observers correctly guessed meant the report showed a healthy amount of job creation, Bloomberg reported.