State of Market: Close 12/15/25
Defensives and Bonds Bid Into the Close as Tech Lags; Precious Metals Shine, Energy Slips
Major U.S. equity ETFs finished slightly lower, with technology underperforming and healthcare and utilities edging higher. Bond proxies gained while gold and silver extended strength. Crypto cooled and the euro firmed.
TendieTensor.com State of Market Close
•
Markets settled into a defensive posture into Monday’s close. Across the major U.S. equity ETFs, prices finished modestly below Friday’s levels, with growth-heavy benchmarks trailing while classic defensives and rates-sensitive pockets outperformed. The macro backdrop remains anchored by subdued inflation expectations and a still-elevated long end of the Treasury curve, a combination that helped support duration and precious metals while leaving parts of mega-cap tech on the back foot.
Equities overview
- SPDR S&P 500 ETF (SPY) last traded at 680.70 versus 681.76 on Friday, a fractional downtick that captures the day’s cautious tone.
- In the Nasdaq-100 proxy, Invesco QQQ Trust (QQQ) closed at 610.48 versus 613.62 Friday, underperforming as investors continued to rotate away from the most AI-centric and rate-sensitive growth names.
- The Dow proxy, SPDR Dow Jones Industrial Average ETF (DIA), ended at 485.15, just below Friday’s 485.40, essentially flat but marginally softer.
- Small caps, via iShares Russell 2000 ETF (IWM), finished at 251.94 versus 253.85 Friday, underlining lingering fragility beneath the surface even after recent bouts of small-cap leadership earlier in December.
Within sectors, dispersion favored defensives and financials over technology:
- Technology, via Technology Select Sector SPDR (XLK), slipped to 142.30 from 143.69. The softer tape in growth aligns with ongoing scrutiny of AI capital spending plans and mixed single-stock headlines in software and semis.
- Financials (XLF) edged up to 55.01 from 54.95, a modest gain consistent with a steeper curve from the front end to the 10-year and constructive credit tone.
- Healthcare (XLV) rose to 156.12 from 154.06, a defensive bid that often coincides with late-year positioning and macro uncertainty.
- Utilities, as indicated by the security quoted with the symbol XLU in the sector dataset, advanced to 43.22 from 42.83, reflecting both the day’s defensiveness and sensitivity to lower long-term real yields.
Macro backdrop: yields, inflation, and expectations
The latest available Treasury yields (12/11 data) show the curve anchored with a modest upward slope into the long end: the 2-year at 3.52%, the 5-year at 3.72%, the 10-year at 4.14%, and the 30-year at 4.79%. While the front end sits well below the 10- and 30-year points, the absolute level of the long end remains elevated versus pre-2022 norms, an important consideration for equity duration and for capital-intensive industries.
On inflation, the most recent headline CPI index level (September) stands at 324.37 with core CPI at 330.54. Index levels alone don’t provide a growth rate signal, but market-based inflation expectations continue to suggest disinflationary comfort: the 5-year breakeven was last at 2.35%, the 10-year at 2.27%, and the 5y5y forward at 2.18% (November data). This configuration is consistent with an outlook where inflation cools toward, or modestly above, the Federal Reserve’s target over the medium term.
Fed communications were mixed in tone over the last day. On one hand, two officials who seldom agree—Fed Governor Stephen Miran and New York Fed President John Williams—signaled they are not concerned about inflation reaccelerating, reinforcing the expectations picture that markets are pricing. On the other, two dissenters to the latest rate cut reiterated that “inflation remains too high” and argued the Committee could have waited for delayed macro releases before moving, injecting a measure of caution into the policy path narrative. For markets today, the take-away appears to be that policy is easing at the margin, but future steps remain data-dependent—with the long end vigilant to any growth or fiscal surprises and risk assets toggling between soft-landing and profit-cycle concerns.
Bonds: duration bid, curve stable
Rates-sensitive ETFs added modest gains. The iShares 20+ Year Treasury Bond ETF (TLT) finished at 87.415, up from 87.34 Friday. The iShares 7-10 Year Treasury Bond ETF (IEF) closed at 96.285 versus 96.19, and the iShares 1-3 Year Treasury Bond ETF (SHY) ended at 82.92 from 82.87. The small advance across the curve is consistent with the inflation-expectations profile and the sense that, while the Fed is easing, growth questions and policy clarity into 2026 still warrant some duration demand. The combination of anchored breakevens and a still-elevated 30-year yield supports the view that real yields remain restrictive enough to argue for selective equity risk-taking rather than broad multiple expansion.
Commodities: precious metals firm, energy softer
In commodities, the day’s leadership belonged to precious metals, while energy was weaker:
- SPDR Gold Shares (GLD) ticked up to 395.81 from 395.44. Gold continues to benefit from the combination of easing policy impulse, subdued real yield expectations over the medium term, and persistent geopolitical/fiscal hedging demand.
- iShares Silver Trust (SLV) extended its outperformance, rising to 58.105 from 56.10. Silver’s higher beta to gold and to industrial activity expectations can amplify moves when both macro hedging and cyclical hopes coexist.
- United States Oil Fund (USO) slipped to 67.915 from 68.81, and the broad commodities basket (DBC) eased to 22.80 from 22.92. United States Natural Gas Fund (UNG) fell to 12.45 from 12.73. The energy softness stands in contrast to the precious metals’ strength and likely reflects both supply headlines and mild concerns around near-term demand momentum.
FX and crypto: euro firms; crypto cools
In foreign exchange, EURUSD was last quoted at approximately 1.1749, up from an open near 1.1731. The mild euro firmness dovetails with an improving non-U.S. growth mix in pockets of Asia and Europe and a U.S. policy rate path that is easing at the margin. Without a prior-day close in the dataset, the broader session-to-session context is limited, but intraday, the pair showed a modest bid.
Crypto softened. Bitcoin (BTCUSD) was marked near 85,761 versus an open around 89,694, with a day range that included a high near 90,036 and a low near 85,132. Ether (ETHUSD) was around 2,927 versus an open near 3,124, after trading between roughly 3,178 and 2,894. The pullback in digital assets is consistent with reduced risk appetite across growth proxies today and follows recent resilience despite rate-policy shifts; positioning and year-end liquidity dynamics may also be at play.
Notable company and thematic news from the day’s flow
- The AI and software complex continued to attract scrutiny. ServiceNow’s stock was reported to be sinking toward its worst day in 11 months on concerns the company could become more acquisitive to sustain growth, an overhang for high-multiple software names sensitive to capital allocation signals. Oracle remains under pressure as investors question the scale and financing of its AI infrastructure ambitions, a theme that dovetails with broader concerns about the durability of hyperscale capex and return timelines. Broadcom, by contrast, recently passed the earnings test with robust AI momentum, though questions about disclosure around a new AI customer lingered in separate coverage.
- In the AI-adjacent automotive space, Tesla shares “flirted with” new highs on a bold valuation call that leans into AI and autonomous driving optionality—illustrative of the ongoing divergence within mega-cap growth narratives.
- The consumer remains in focus. An analyst took a contrarian “sell” stance on Costco despite solid headline results elsewhere, citing risks around membership trends and competitive dynamics. That kind of pushback has contributed to a more selective tone in retail as investors parse traffic, pricing power, and margin durability.
- Healthcare headlines were two-speed. Sanofi’s shares slumped after setbacks tied to multiple-sclerosis programs, while the broader healthcare sector ETF still advanced, highlighting the diversification benefits at the sector level.
- A policy swing buoyed cannabis equities late last week and remained topical today: reports indicated a move to reclassify marijuana to a less restrictive schedule, sparking a sharp rally in stocks such as Tilray. Policy timing and details remain the decisive variables for that group.
- Outside the main indices, iRobot filed for Chapter 11 and a go-private path—another sign of the bifurcated environment where capital access and balance-sheet flexibility determine outcomes.
These disparate headlines collectively reinforce the market’s late-year theme: a rotation out of the year’s AI winners into broader, often more defensive, exposures. Recent coverage described investors “dumping stock‑market winners and buying almost everything else”—a sign of improved confidence in the non-mega-cap economy but also a prompt for more valuation discipline in the AI complex.
Positioning implications
Today’s tape—slightly weaker SPY and QQQ, firmer XLV and XLU, and a bid in TLT/IEF—suggests investors continued to rebalance toward quality cash flows and rate-sensitive defensives while maintaining some exposure to a soft-landing scenario via financials. The resilience of GLD and the outsized advance in SLV versus pressure in USO and UNG indicate a preference for macro hedges and skepticism toward near-term energy demand impulses.
What to watch next
- Macro prints: A delayed November jobs report and key inflation updates later this week will be pivotal for clarifying whether labor markets are stabilizing or deteriorating. Bond-market commentary has warned that the current rally could look different in January if the data flow surprises.
- Policy path and personnel: The debate among Fed officials—some highlighting cooling inflation, dissenters urging patience—keeps focus on the policy rate glide path into 2026. Separate headlines around potential Fed chair candidates reinforce that leadership discussions are live and could influence market expectations around reaction functions in the new year.
- AI spending and disclosure: Oracle’s financing questions, Broadcom’s customer disclosures, and software M&A chatter (e.g., ServiceNow concerns) keep the AI-capex ROI debate squarely in focus. Expect continued dispersion within tech as the market differentiates between capital providers, tool suppliers, and application-layer winners.
- Sector rotation durability: Recent reports of a rotation out of AI winners into cyclicals and defensives make the relative trajectories of XLK versus XLV/XLU/XLF an important barometer into year-end.
- Commodities balance: Watch whether the precious-metals bid persists alongside any changes in real yields; in energy, headlines around supply (including Venezuela policy scenarios) and global growth will steer USO and DBC.
- Crypto flows: With Bitcoin and Ether softer versus their opens, monitor whether dips attract renewed demand into lower-liquidity year-end conditions.
Risks
- Policy uncertainty: Conflicting Fed messaging and potential changes in personnel could alter rate expectations or communication style, affecting both duration and equity multiples.
- Earnings quality in AI and software: If capex plans are delayed or ROI timelines extend, multiple compression risk rises for the most richly valued names.
- Macro data surprises: A weaker-than-expected jobs report or sticky inflation could reignite recession or stagflation concerns, steepening risk-off moves in equities and tightening financial conditions.
- Geopolitics and regulation: Cannabis rescheduling outcomes, tariff adjustments, and antitrust/regulatory scrutiny in media/tech could create stock-specific volatility and sector-wide repricings.
- Liquidity and positioning: Into the last full trading week of the year, thinner liquidity can amplify moves; rebalancing flows may exaggerate sector rotations.
Bottom line
Monday’s session delivered a subtle but clear message: defensives and duration found bids while growth-heavy benchmarks eased, with precious metals carrying momentum and energy lagging. Inflation expectations remain anchored near the low-2% zone even as long yields stay elevated, a mix that encourages selective equity exposure and patience on the AI complex while rewarding ballast in healthcare, utilities, and high-quality credit duration. Near-term, data and policy clarity will determine whether this positioning persists into January or gives way to a fresh leg of cyclicality. For now, the market’s default stance is balanced risk with a defensive tilt, awaiting confirmation from jobs and inflation.
Markets settled into a defensive posture into Monday’s close. Across the major U.S. equity ETFs, prices finished modestly below Friday’s levels, with growth-heavy benchmarks trailing while classic defensives and rates-sensitive pockets outperformed. The macro backdrop remains anchored by subdued inflation expectations and a still-elevated long end of the Treasury curve, a combination that helped support duration and precious metals while leaving parts of mega-cap tech on the back foot.
Equities overview
- SPDR S&P 500 ETF (SPY) last traded at 680.70 versus 681.76 on Friday, a fractional downtick that captures the day’s cautious tone.
- In the Nasdaq-100 proxy, Invesco QQQ Trust (QQQ) closed at 610.48 versus 613.62 Friday, underperforming as investors continued to rotate away from the most AI-centric and rate-sensitive growth names.
- The Dow proxy, SPDR Dow Jones Industrial Average ETF (DIA), ended at 485.15, just below Friday’s 485.40, essentially flat but marginally softer.
- Small caps, via iShares Russell 2000 ETF (IWM), finished at 251.94 versus 253.85 Friday, underlining lingering fragility beneath the surface even after recent bouts of small-cap leadership earlier in December.
Within sectors, dispersion favored defensives and financials over technology:
- Technology, via Technology Select Sector SPDR (XLK), slipped to 142.30 from 143.69. The softer tape in growth aligns with ongoing scrutiny of AI capital spending plans and mixed single-stock headlines in software and semis.
- Financials (XLF) edged up to 55.01 from 54.95, a modest gain consistent with a steeper curve from the front end to the 10-year and constructive credit tone.
- Healthcare (XLV) rose to 156.12 from 154.06, a defensive bid that often coincides with late-year positioning and macro uncertainty.
- Utilities, as indicated by the security quoted with the symbol XLU in the sector dataset, advanced to 43.22 from 42.83, reflecting both the day’s defensiveness and sensitivity to lower long-term real yields.
Macro backdrop: yields, inflation, and expectations
The latest available Treasury yields (12/11 data) show the curve anchored with a modest upward slope into the long end: the 2-year at 3.52%, the 5-year at 3.72%, the 10-year at 4.14%, and the 30-year at 4.79%. While the front end sits well below the 10- and 30-year points, the absolute level of the long end remains elevated versus pre-2022 norms, an important consideration for equity duration and for capital-intensive industries.
On inflation, the most recent headline CPI index level (September) stands at 324.37 with core CPI at 330.54. Index levels alone don’t provide a growth rate signal, but market-based inflation expectations continue to suggest disinflationary comfort: the 5-year breakeven was last at 2.35%, the 10-year at 2.27%, and the 5y5y forward at 2.18% (November data). This configuration is consistent with an outlook where inflation cools toward, or modestly above, the Federal Reserve’s target over the medium term.
Fed communications were mixed in tone over the last day. On one hand, two officials who seldom agree—Fed Governor Stephen Miran and New York Fed President John Williams—signaled they are not concerned about inflation reaccelerating, reinforcing the expectations picture that markets are pricing. On the other, two dissenters to the latest rate cut reiterated that “inflation remains too high” and argued the Committee could have waited for delayed macro releases before moving, injecting a measure of caution into the policy path narrative. For markets today, the take-away appears to be that policy is easing at the margin, but future steps remain data-dependent—with the long end vigilant to any growth or fiscal surprises and risk assets toggling between soft-landing and profit-cycle concerns.
Bonds: duration bid, curve stable
Rates-sensitive ETFs added modest gains. The iShares 20+ Year Treasury Bond ETF (TLT) finished at 87.415, up from 87.34 Friday. The iShares 7-10 Year Treasury Bond ETF (IEF) closed at 96.285 versus 96.19, and the iShares 1-3 Year Treasury Bond ETF (SHY) ended at 82.92 from 82.87. The small advance across the curve is consistent with the inflation-expectations profile and the sense that, while the Fed is easing, growth questions and policy clarity into 2026 still warrant some duration demand. The combination of anchored breakevens and a still-elevated 30-year yield supports the view that real yields remain restrictive enough to argue for selective equity risk-taking rather than broad multiple expansion.
Commodities: precious metals firm, energy softer
In commodities, the day’s leadership belonged to precious metals, while energy was weaker:
- SPDR Gold Shares (GLD) ticked up to 395.81 from 395.44. Gold continues to benefit from the combination of easing policy impulse, subdued real yield expectations over the medium term, and persistent geopolitical/fiscal hedging demand.
- iShares Silver Trust (SLV) extended its outperformance, rising to 58.105 from 56.10. Silver’s higher beta to gold and to industrial activity expectations can amplify moves when both macro hedging and cyclical hopes coexist.
- United States Oil Fund (USO) slipped to 67.915 from 68.81, and the broad commodities basket (DBC) eased to 22.80 from 22.92. United States Natural Gas Fund (UNG) fell to 12.45 from 12.73. The energy softness stands in contrast to the precious metals’ strength and likely reflects both supply headlines and mild concerns around near-term demand momentum.
FX and crypto: euro firms; crypto cools
In foreign exchange, EURUSD was last quoted at approximately 1.1749, up from an open near 1.1731. The mild euro firmness dovetails with an improving non-U.S. growth mix in pockets of Asia and Europe and a U.S. policy rate path that is easing at the margin. Without a prior-day close in the dataset, the broader session-to-session context is limited, but intraday, the pair showed a modest bid.
Crypto softened. Bitcoin (BTCUSD) was marked near 85,761 versus an open around 89,694, with a day range that included a high near 90,036 and a low near 85,132. Ether (ETHUSD) was around 2,927 versus an open near 3,124, after trading between roughly 3,178 and 2,894. The pullback in digital assets is consistent with reduced risk appetite across growth proxies today and follows recent resilience despite rate-policy shifts; positioning and year-end liquidity dynamics may also be at play.
Notable company and thematic news from the day’s flow
- The AI and software complex continued to attract scrutiny. ServiceNow’s stock was reported to be sinking toward its worst day in 11 months on concerns the company could become more acquisitive to sustain growth, an overhang for high-multiple software names sensitive to capital allocation signals. Oracle remains under pressure as investors question the scale and financing of its AI infrastructure ambitions, a theme that dovetails with broader concerns about the durability of hyperscale capex and return timelines. Broadcom, by contrast, recently passed the earnings test with robust AI momentum, though questions about disclosure around a new AI customer lingered in separate coverage.
- In the AI-adjacent automotive space, Tesla shares “flirted with” new highs on a bold valuation call that leans into AI and autonomous driving optionality—illustrative of the ongoing divergence within mega-cap growth narratives.
- The consumer remains in focus. An analyst took a contrarian “sell” stance on Costco despite solid headline results elsewhere, citing risks around membership trends and competitive dynamics. That kind of pushback has contributed to a more selective tone in retail as investors parse traffic, pricing power, and margin durability.
- Healthcare headlines were two-speed. Sanofi’s shares slumped after setbacks tied to multiple-sclerosis programs, while the broader healthcare sector ETF still advanced, highlighting the diversification benefits at the sector level.
- A policy swing buoyed cannabis equities late last week and remained topical today: reports indicated a move to reclassify marijuana to a less restrictive schedule, sparking a sharp rally in stocks such as Tilray. Policy timing and details remain the decisive variables for that group.
- Outside the main indices, iRobot filed for Chapter 11 and a go-private path—another sign of the bifurcated environment where capital access and balance-sheet flexibility determine outcomes.
These disparate headlines collectively reinforce the market’s late-year theme: a rotation out of the year’s AI winners into broader, often more defensive, exposures. Recent coverage described investors “dumping stock‑market winners and buying almost everything else”—a sign of improved confidence in the non-mega-cap economy but also a prompt for more valuation discipline in the AI complex.
Positioning implications
Today’s tape—slightly weaker SPY and QQQ, firmer XLV and XLU, and a bid in TLT/IEF—suggests investors continued to rebalance toward quality cash flows and rate-sensitive defensives while maintaining some exposure to a soft-landing scenario via financials. The resilience of GLD and the outsized advance in SLV versus pressure in USO and UNG indicate a preference for macro hedges and skepticism toward near-term energy demand impulses.
What to watch next
- Macro prints: A delayed November jobs report and key inflation updates later this week will be pivotal for clarifying whether labor markets are stabilizing or deteriorating. Bond-market commentary has warned that the current rally could look different in January if the data flow surprises.
- Policy path and personnel: The debate among Fed officials—some highlighting cooling inflation, dissenters urging patience—keeps focus on the policy rate glide path into 2026. Separate headlines around potential Fed chair candidates reinforce that leadership discussions are live and could influence market expectations around reaction functions in the new year.
- AI spending and disclosure: Oracle’s financing questions, Broadcom’s customer disclosures, and software M&A chatter (e.g., ServiceNow concerns) keep the AI-capex ROI debate squarely in focus. Expect continued dispersion within tech as the market differentiates between capital providers, tool suppliers, and application-layer winners.
- Sector rotation durability: Recent reports of a rotation out of AI winners into cyclicals and defensives make the relative trajectories of XLK versus XLV/XLU/XLF an important barometer into year-end.
- Commodities balance: Watch whether the precious-metals bid persists alongside any changes in real yields; in energy, headlines around supply (including Venezuela policy scenarios) and global growth will steer USO and DBC.
- Crypto flows: With Bitcoin and Ether softer versus their opens, monitor whether dips attract renewed demand into lower-liquidity year-end conditions.
Risks
- Policy uncertainty: Conflicting Fed messaging and potential changes in personnel could alter rate expectations or communication style, affecting both duration and equity multiples.
- Earnings quality in AI and software: If capex plans are delayed or ROI timelines extend, multiple compression risk rises for the most richly valued names.
- Macro data surprises: A weaker-than-expected jobs report or sticky inflation could reignite recession or stagflation concerns, steepening risk-off moves in equities and tightening financial conditions.
- Geopolitics and regulation: Cannabis rescheduling outcomes, tariff adjustments, and antitrust/regulatory scrutiny in media/tech could create stock-specific volatility and sector-wide repricings.
- Liquidity and positioning: Into the last full trading week of the year, thinner liquidity can amplify moves; rebalancing flows may exaggerate sector rotations.
Bottom line
Monday’s session delivered a subtle but clear message: defensives and duration found bids while growth-heavy benchmarks eased, with precious metals carrying momentum and energy lagging. Inflation expectations remain anchored near the low-2% zone even as long yields stay elevated, a mix that encourages selective equity exposure and patience on the AI complex while rewarding ballast in healthcare, utilities, and high-quality credit duration. Near-term, data and policy clarity will determine whether this positioning persists into January or gives way to a fresh leg of cyclicality. For now, the market’s default stance is balanced risk with a defensive tilt, awaiting confirmation from jobs and inflation.