Buffett hands over the reins, the stock market's losing streak, airline class wars and more in Morning Squawk

• Major indexes (Dow, S&P 500, Nasdaq) all down more than 1% to start 2026, though strategists remain optimistic about the year ahead
• Tech companies' massive AI data center buildouts face bipartisan political pushback over electricity usage and environmental concerns ahead of 2026 midterms
• Airlines diverge between premium expansion (Delta's business class, JetBlue lounges) and budget carrier struggles, with Spirit Airlines in its second bankruptcy

Market Summary: January 2, 2026

Market Performance

U.S. stocks are poised for a weak start to 2026, with all three major indexes on track to end the holiday-shortened week down more than 1%. Despite this, 2025 marked the third consecutive year of double-digit gains for the S&P 500, Dow, and Nasdaq. However, U.S. markets underperformed many international counterparts.

Key Corporate Developments

Warren Buffett has officially stepped down as CEO of Berkshire Hathaway after six decades, transitioning to chairman while Greg Abel takes the helm. Under Buffett's leadership, Berkshire delivered cumulative returns exceeding 5,000,000%. Questions remain about who will manage Berkshire's $300 billion equity portfolio, as investors are uncertain about Abel's stock-picking abilities.

Sector Highlights

• Technology/AI: Major tech companies including OpenAI are developing hyperscale data center campuses across the U.S., raising concerns about energy consumption and potential AI bubble formation due to heavy debt financing.
• Automotive: Stellantis is reviving the Ram 1500 TRX gas-powered pickup truck with V-8 engine, priced at approximately $100,000, as part of its turnaround strategy.
• Airlines: A stark divide emerges in the airline industry. Premium carriers like Delta focus on profitable routes and plan domestic business class launches, while budget carrier Spirit Airlines faces its second bankruptcy in under a year with potential Frontier merger talks.

Market Outlook

Despite the weak year-end performance and current four-day losing streak, Wall Street strategists maintain optimistic expectations for 2026, anticipating renewed buying interest as the new year progresses.