State of Market: Midday 01/01/26
Midday Market Brief: Equities lean lower into the new year as yields hold firm, metals cool, and crypto steadies
Last official prints point to a softer risk tone following year-end, with the 10-year at 4.14%, inflation expectations near 2.3%-2.4% longer-term, and silver and gold easing after a standout 2025.
TendieTensor.com State of Market Midday
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Overview
At the midpoint of the New Year’s Day session, the latest tradable marks available point to a market still digesting the final moves of 2025 rather than printing fresh regular-hours activity. The most recent consolidated quotes show U.S. equity ETFs finishing the last session of the year on a softer note, with broad indices marginally below prior closes, long-duration Treasuries off alongside a 10-year yield anchored around 4.14%, and commodities—especially precious metals—giving back some of their outsized year-to-date gains. Crypto prices are steadier, with bitcoin near the upper end of today’s quoted range and ether holding just below $3,000.
Several macro threads from the news flow continue to shape sentiment. Federal Reserve communications suggest a divided committee on the path of rate cuts and the duration of a policy pause, even as recent jobless claims data point to a still-steady labor market. Internationally, China’s factory activity returned to expansion in December and authorities announced new consumer subsidies, offering a tentative offset to broader growth concerns. Domestically, policy headlines—from a potential reprieve on certain furniture tariffs to minimum wage increases in multiple states—feed into 2026 consumption and inflation narratives.
Macro backdrop: yields, inflation, expectations
Treasury yields as of December 30 remain a key anchor for cross-asset pricing. The 2-year sits at 3.45%, the 5-year at 3.68%, the 10-year at 4.14%, and the 30-year at 4.81%. The curve shows the 10-year running roughly 0.69 percentage points above the 2-year, a notable steepness relative to much of 2025’s inversion, and a configuration that can influence sector leadership (financials in particular) and small-cap financing conditions as 2026 begins.
Inflation readings, based on the November CPI level (headline 325.031 and core 331.068 on the index), continue to interact with policy as markets weigh the Fed’s tolerance for a pause. Inflation expectations from December models are subdued at the medium and long ends: about 3.20% for 1-year, 2.42% for 5-year, and near 2.34% for 10-year, with the 30-year around 2.44%. This combination—policy uncertainty but anchored longer-term expectations—has historically supported equity multiples when growth is durable, though the near-term valuation backdrop remains sensitive to rate path headlines.
Fed communications remain front and center. Minutes reported this week point to a committee split on the pace and extent of easing, with some favoring a larger cut and others preferring to hold rates steady following the latest 25-basis-point reduction to a 3.50%-3.75% range. Additional reporting highlights the possibility that policy could remain on hold “for some time” as officials assess the effects of 2025’s cumulative cuts. Offsetting growth worries, recent jobless claims dipped below 200,000 for a third straight week, a sign that labor-market conditions remain steady into year-end.
Equities: softer tone into year-end
The latest tradable marks show U.S. equity proxies finishing lower versus prior closes. SPY last traded at 681.84 versus a previous close of 687.01. QQQ printed 614.28 versus 619.43. The Dow proxy, DIA, last traded at 480.61 versus 483.59, and small caps (IWM) were quoted at 246.19, below the prior 248.03. These moves frame a modest risk-off bias into the turn of the year. As-of timestamps indicate the last regular and extended-hours prints occurred on December 31; there are no new intraday regular-hours marks today to update that picture.
Within the news flow, several narratives intersect with equity positioning:
- Macro caution: Market commentary notes that the U.S. economy carries multiple worries into 2026, including stalled progress on inflation and a shakier labor backdrop, even as jobless claims suggest near-term steadiness. Such crosscurrents can keep index-level volatility elevated around macro data releases.
- Factor and breadth themes: Some market observers see echoes of 2000’s rotation as 2026 begins, with small-cap value screens appearing historically depressed. That aligns with the recent underperformance signaled by IWM’s last marks, although performance leadership can shift quickly if a sustained curve steepening materializes.
- Policy-sensitive pockets: The administration’s decision to spare homeowners from higher tariffs on certain furniture and cabinets in 2026 could relieve a potential price pressure point for home-related categories. By contrast, a renewed government shutdown risk creates a potential near-term overhang for federal contractors and consumer confidence if it were to materialize.
Sectors: a mild pullback across leadership groups
Among sector ETFs with latest quotes, financials (XLF) last printed at 54.77 versus a previous close of 55.18, technology (XLK) at 143.96 versus 145.41, health care (XLV) at 154.81 versus 155.68, and a utilities-linked symbol (XLU, presented within the payload’s sector list) at 42.70 versus 42.96. The uniform step-down underscores a broad-based exhale into the year-end print.
Looking ahead, strategic views suggest 2026 could be constructive for regional banks if the curve continues to steepen, regulation loosens at the margin, and M&A activity lifts returns—tailwinds cited in recent commentary. For technology, late-2025 deal activity among megacaps highlights ongoing investment aimed at AI capabilities. The sector’s medium-term earnings path remains tied to AI monetization, cloud workloads, and capital intensity across the value chain. Health care’s defensive characteristics may remain in focus given policy experimentation, including a pilot program introducing AI-driven prior authorization in parts of Medicare, though the earnings impact will depend on implementation and provider response.
Bonds: long duration tracks yields
Treasury-focused ETFs reflect the slightly higher-yield tone into the last session of the year. TLT, a long-duration proxy, last traded at 87.17 versus 87.86 previously. Intermediate duration (IEF) printed 96.16 versus 96.48, and front-end exposure (SHY) at 82.83 versus 82.85. These price dips are broadly consistent with the 10-year anchored near 4.14% and the 30-year near 4.82% in the provided yield snapshot. With the Fed minutes signaling debate over the near-term path and some officials open to a pause, term premia and issuance dynamics will remain important drivers of duration returns into early 2026.
Commodities: precious metals cool after a standout year; energy mixed
Precious metals eased into year-end. GLD last traded at 396.30 versus 398.89 previously, and SLV at 64.44 versus 68.98, reflecting a notable retracement for silver after a period of heightened volatility. Reporting indicates that gold and silver ended 2025 with historic full-year performances despite late profit-taking, while technical and positioning factors drove sharper swings in silver, including margin-related volatility. Additional commentary points to structural tailwinds for silver, alongside warnings that its surge relative to oil has entered unusual territory—a caution that volatility may remain elevated as 2026 opens.
In energy, USO printed 69.15 versus 69.74, a slight step down. Broad commodities (DBC) also eased to 22.37 from 22.64. Natural gas (UNG) remained soft at 12.25 versus 13.12. International supply narratives—such as reduced Russian shipments to India following sanctions and shifts in Asian currency trends—add to the crosscurrents influencing global energy trade and, by extension, commodity indices.
International policy developments could become supportive for industrial metals and energy demand if sustained. China’s official manufacturing PMI ticked back into expansion at 50.1 in December, ending the longest stretch of contraction on record, and authorities announced nearly $9 billion in consumer trade-in subsidies for 2026. Together, these steps point to incremental support for domestic demand, though the durability of the impulse remains to be seen.
FX and crypto: dollar pairs steady; bitcoin and ether firm intraday
FX data provided include EURUSD with a quoted mark near 1.1741. Without comparable open/previous markers in the payload, directionality is best characterized as mixed at this point in the day.
Crypto prices are firmer on the session based on the provided intraday references. Bitcoin (BTCUSD) shows a mark near 87,998, above the quoted open near 87,432 and within a high-low range of ~88,435 to ~87,425. Ether (ETHUSD) marked near 2,983 versus an open near 2,970, with an intraday high just above $3,002. The steadier tone arrives against a mixed corporate adoption backdrop into year-end: one company reduced the pace of bitcoin treasury accumulation amid equity dilution pressures, while another abandoned a previously signaled bitcoin-buying strategy after a short-lived commitment. Those crosscurrents reinforce that crypto’s institutional demand drivers are still uneven, even as price action remains constructive today.
Notable company and policy headlines
- Consumer and housing-related tariffs: The decision to spare homeowners from higher tariffs on certain cabinets and furniture in 2026 helps avoid an incremental inflationary impulse for home goods—an area already sensitive to affordability constraints.
- Labor and household income: Minimum wage increases in 19 states took effect, potentially supporting low-end consumption in early 2026 even as broader inflation progress has appeared to stall, according to reporting.
- Fed policy uncertainty: Minutes highlighted a divided committee on cuts, and separate coverage emphasized that rates could be on hold for some time as officials assess recent easing.
- Tech and AI: Megacap deal-making in AI closed out 2025 on an active note, underlining the sector’s drive to consolidate capabilities.
- Autos: A pessimistic fourth-quarter forecast from a major EV manufacturer kept attention on volume and pricing dynamics heading into 2026.
- Footwear/apparel: Insider purchases at a leading athletic brand drew attention following a difficult year for the stock, a potential sentiment stabilizer for the name.
- Government funding: A renewed shutdown risk as Congress returns places near-term focus on deadlines and spillover to confidence and spending if deadlines are missed.
- International: China’s return to factory expansion and new consumption subsidies could provide a modest offset to global growth concerns.
Outlook
The opening days of 2026 will likely be defined by a few key variables:
- The evolution of the Treasury curve (especially the 2s/10s spread) and its implications for financials, small caps, and broader equity risk premia.
- Incoming labor data and corporate guidance updates that either confirm or contradict the late-2025 narrative of steady employment but shakier growth momentum.
- Precious metals positioning after the year-end pullback, with silver’s volatility a focal point for cross-asset risk appetite.
- Policy clarity from the Fed regarding the length of any pause, as well as any developments related to government funding deadlines.
- International growth signals, particularly from China, and any follow-through on stimulus or trade measures that influence commodity demand.
Near-term, the absence of fresh regular-hours prints today leaves the prior session’s softer tone intact. With inflation expectations anchored near 2.3%-2.4% at longer horizons and the 10-year around 4.14% in the latest snapshot, the balance between earnings resilience and the cost of capital remains the central equity debate to start the year. Positioning around sector catalysts—banks and curve dynamics, tech and AI monetization, health care and policy implementation—will likely set early-2026 leadership as liquidity and dataflow normalize after the holiday period.
Overview
At the midpoint of the New Year’s Day session, the latest tradable marks available point to a market still digesting the final moves of 2025 rather than printing fresh regular-hours activity. The most recent consolidated quotes show U.S. equity ETFs finishing the last session of the year on a softer note, with broad indices marginally below prior closes, long-duration Treasuries off alongside a 10-year yield anchored around 4.14%, and commodities—especially precious metals—giving back some of their outsized year-to-date gains. Crypto prices are steadier, with bitcoin near the upper end of today’s quoted range and ether holding just below $3,000.
Several macro threads from the news flow continue to shape sentiment. Federal Reserve communications suggest a divided committee on the path of rate cuts and the duration of a policy pause, even as recent jobless claims data point to a still-steady labor market. Internationally, China’s factory activity returned to expansion in December and authorities announced new consumer subsidies, offering a tentative offset to broader growth concerns. Domestically, policy headlines—from a potential reprieve on certain furniture tariffs to minimum wage increases in multiple states—feed into 2026 consumption and inflation narratives.
Macro backdrop: yields, inflation, expectations
Treasury yields as of December 30 remain a key anchor for cross-asset pricing. The 2-year sits at 3.45%, the 5-year at 3.68%, the 10-year at 4.14%, and the 30-year at 4.81%. The curve shows the 10-year running roughly 0.69 percentage points above the 2-year, a notable steepness relative to much of 2025’s inversion, and a configuration that can influence sector leadership (financials in particular) and small-cap financing conditions as 2026 begins.
Inflation readings, based on the November CPI level (headline 325.031 and core 331.068 on the index), continue to interact with policy as markets weigh the Fed’s tolerance for a pause. Inflation expectations from December models are subdued at the medium and long ends: about 3.20% for 1-year, 2.42% for 5-year, and near 2.34% for 10-year, with the 30-year around 2.44%. This combination—policy uncertainty but anchored longer-term expectations—has historically supported equity multiples when growth is durable, though the near-term valuation backdrop remains sensitive to rate path headlines.
Fed communications remain front and center. Minutes reported this week point to a committee split on the pace and extent of easing, with some favoring a larger cut and others preferring to hold rates steady following the latest 25-basis-point reduction to a 3.50%-3.75% range. Additional reporting highlights the possibility that policy could remain on hold “for some time” as officials assess the effects of 2025’s cumulative cuts. Offsetting growth worries, recent jobless claims dipped below 200,000 for a third straight week, a sign that labor-market conditions remain steady into year-end.
Equities: softer tone into year-end
The latest tradable marks show U.S. equity proxies finishing lower versus prior closes. SPY last traded at 681.84 versus a previous close of 687.01. QQQ printed 614.28 versus 619.43. The Dow proxy, DIA, last traded at 480.61 versus 483.59, and small caps (IWM) were quoted at 246.19, below the prior 248.03. These moves frame a modest risk-off bias into the turn of the year. As-of timestamps indicate the last regular and extended-hours prints occurred on December 31; there are no new intraday regular-hours marks today to update that picture.
Within the news flow, several narratives intersect with equity positioning:
- Macro caution: Market commentary notes that the U.S. economy carries multiple worries into 2026, including stalled progress on inflation and a shakier labor backdrop, even as jobless claims suggest near-term steadiness. Such crosscurrents can keep index-level volatility elevated around macro data releases.
- Factor and breadth themes: Some market observers see echoes of 2000’s rotation as 2026 begins, with small-cap value screens appearing historically depressed. That aligns with the recent underperformance signaled by IWM’s last marks, although performance leadership can shift quickly if a sustained curve steepening materializes.
- Policy-sensitive pockets: The administration’s decision to spare homeowners from higher tariffs on certain furniture and cabinets in 2026 could relieve a potential price pressure point for home-related categories. By contrast, a renewed government shutdown risk creates a potential near-term overhang for federal contractors and consumer confidence if it were to materialize.
Sectors: a mild pullback across leadership groups
Among sector ETFs with latest quotes, financials (XLF) last printed at 54.77 versus a previous close of 55.18, technology (XLK) at 143.96 versus 145.41, health care (XLV) at 154.81 versus 155.68, and a utilities-linked symbol (XLU, presented within the payload’s sector list) at 42.70 versus 42.96. The uniform step-down underscores a broad-based exhale into the year-end print.
Looking ahead, strategic views suggest 2026 could be constructive for regional banks if the curve continues to steepen, regulation loosens at the margin, and M&A activity lifts returns—tailwinds cited in recent commentary. For technology, late-2025 deal activity among megacaps highlights ongoing investment aimed at AI capabilities. The sector’s medium-term earnings path remains tied to AI monetization, cloud workloads, and capital intensity across the value chain. Health care’s defensive characteristics may remain in focus given policy experimentation, including a pilot program introducing AI-driven prior authorization in parts of Medicare, though the earnings impact will depend on implementation and provider response.
Bonds: long duration tracks yields
Treasury-focused ETFs reflect the slightly higher-yield tone into the last session of the year. TLT, a long-duration proxy, last traded at 87.17 versus 87.86 previously. Intermediate duration (IEF) printed 96.16 versus 96.48, and front-end exposure (SHY) at 82.83 versus 82.85. These price dips are broadly consistent with the 10-year anchored near 4.14% and the 30-year near 4.82% in the provided yield snapshot. With the Fed minutes signaling debate over the near-term path and some officials open to a pause, term premia and issuance dynamics will remain important drivers of duration returns into early 2026.
Commodities: precious metals cool after a standout year; energy mixed
Precious metals eased into year-end. GLD last traded at 396.30 versus 398.89 previously, and SLV at 64.44 versus 68.98, reflecting a notable retracement for silver after a period of heightened volatility. Reporting indicates that gold and silver ended 2025 with historic full-year performances despite late profit-taking, while technical and positioning factors drove sharper swings in silver, including margin-related volatility. Additional commentary points to structural tailwinds for silver, alongside warnings that its surge relative to oil has entered unusual territory—a caution that volatility may remain elevated as 2026 opens.
In energy, USO printed 69.15 versus 69.74, a slight step down. Broad commodities (DBC) also eased to 22.37 from 22.64. Natural gas (UNG) remained soft at 12.25 versus 13.12. International supply narratives—such as reduced Russian shipments to India following sanctions and shifts in Asian currency trends—add to the crosscurrents influencing global energy trade and, by extension, commodity indices.
International policy developments could become supportive for industrial metals and energy demand if sustained. China’s official manufacturing PMI ticked back into expansion at 50.1 in December, ending the longest stretch of contraction on record, and authorities announced nearly $9 billion in consumer trade-in subsidies for 2026. Together, these steps point to incremental support for domestic demand, though the durability of the impulse remains to be seen.
FX and crypto: dollar pairs steady; bitcoin and ether firm intraday
FX data provided include EURUSD with a quoted mark near 1.1741. Without comparable open/previous markers in the payload, directionality is best characterized as mixed at this point in the day.
Crypto prices are firmer on the session based on the provided intraday references. Bitcoin (BTCUSD) shows a mark near 87,998, above the quoted open near 87,432 and within a high-low range of ~88,435 to ~87,425. Ether (ETHUSD) marked near 2,983 versus an open near 2,970, with an intraday high just above $3,002. The steadier tone arrives against a mixed corporate adoption backdrop into year-end: one company reduced the pace of bitcoin treasury accumulation amid equity dilution pressures, while another abandoned a previously signaled bitcoin-buying strategy after a short-lived commitment. Those crosscurrents reinforce that crypto’s institutional demand drivers are still uneven, even as price action remains constructive today.
Notable company and policy headlines
- Consumer and housing-related tariffs: The decision to spare homeowners from higher tariffs on certain cabinets and furniture in 2026 helps avoid an incremental inflationary impulse for home goods—an area already sensitive to affordability constraints.
- Labor and household income: Minimum wage increases in 19 states took effect, potentially supporting low-end consumption in early 2026 even as broader inflation progress has appeared to stall, according to reporting.
- Fed policy uncertainty: Minutes highlighted a divided committee on cuts, and separate coverage emphasized that rates could be on hold for some time as officials assess recent easing.
- Tech and AI: Megacap deal-making in AI closed out 2025 on an active note, underlining the sector’s drive to consolidate capabilities.
- Autos: A pessimistic fourth-quarter forecast from a major EV manufacturer kept attention on volume and pricing dynamics heading into 2026.
- Footwear/apparel: Insider purchases at a leading athletic brand drew attention following a difficult year for the stock, a potential sentiment stabilizer for the name.
- Government funding: A renewed shutdown risk as Congress returns places near-term focus on deadlines and spillover to confidence and spending if deadlines are missed.
- International: China’s return to factory expansion and new consumption subsidies could provide a modest offset to global growth concerns.
Outlook
The opening days of 2026 will likely be defined by a few key variables:
- The evolution of the Treasury curve (especially the 2s/10s spread) and its implications for financials, small caps, and broader equity risk premia.
- Incoming labor data and corporate guidance updates that either confirm or contradict the late-2025 narrative of steady employment but shakier growth momentum.
- Precious metals positioning after the year-end pullback, with silver’s volatility a focal point for cross-asset risk appetite.
- Policy clarity from the Fed regarding the length of any pause, as well as any developments related to government funding deadlines.
- International growth signals, particularly from China, and any follow-through on stimulus or trade measures that influence commodity demand.
Near-term, the absence of fresh regular-hours prints today leaves the prior session’s softer tone intact. With inflation expectations anchored near 2.3%-2.4% at longer horizons and the 10-year around 4.14% in the latest snapshot, the balance between earnings resilience and the cost of capital remains the central equity debate to start the year. Positioning around sector catalysts—banks and curve dynamics, tech and AI monetization, health care and policy implementation—will likely set early-2026 leadership as liquidity and dataflow normalize after the holiday period.