State of Market: Midday 12/01/25
Midday market check: Stocks edge lower as energy and healthcare lag; precious metals rally; bonds slip
Tech steadies on AI headlines while small caps underperform; oil soft after OPEC+ pause, silver leads commodities; crypto retreats and euro firms
TendieTensor.com State of Market Midday
•
Equities are softer at midday to open December, with major U.S. index ETFs slightly in the red and a defensive bid showing up in precious metals rather than in Treasuries. The S&P 500 proxy (SPY) is modestly lower versus Friday’s close, the Nasdaq 100 tracker (QQQ) is fractionally down, and the Dow (DIA) underperforms. Small caps (IWM) lag the most among the broad benchmarks. Sector leadership is narrow: technology is holding up on a fresh round of artificial intelligence newsflow, while energy and healthcare weigh on the tape. In rates, bond ETFs are down across the curve, consistent with a mild back-up in yields from late last week’s levels, while the dollar is mixed to slightly softer against the euro. Crypto is retracing part of its recent holiday rally.
Macro backdrop and rates
The Treasury curve remains relatively flat-to-gently upward sloping beyond the front end, based on the latest available readings. As of the most recent update, the 2-year sits at 3.45%, the 5-year at 3.56%, the 10-year at 4.00%, and the 30-year at 4.64%. The very front end remains elevated, with the 1-month at 4.06% and 3-month at 3.92%, leaving the ultra-short segment roughly on par with—or slightly above—the 10-year. That mix implies the market continues to discount slower growth and constrained inflation over the medium term while still demanding some premium at the long end.
On inflation, the latest CPI level stands at 324.368 with core CPI at 330.542 (September readings). Forward-looking gauges remain anchored: market-implied 5-year inflation expectations are 2.36% and 10-year at 2.31%, with the 5y5y forward at 2.25%. A model-based 1-year expectation is 2.74%, and the model 5- and 10-year are clustered around 2.32% and 2.29%, respectively. In short, longer-term expectations are close to the Federal Reserve’s target region by these measures, even as near-term price pressures may remain a touch higher. That anchoring provides a cushion for equity multiples, but it also leaves the Fed data-dependent and sensitive to any re-acceleration.
Economic data and policy headlines are in the mix. The Institute for Supply Management’s manufacturing report (article reference) points to contraction for a ninth month, citing tariff-related cost pressures and soft hiring. That backdrop aligns with today’s underperformance in cyclicals and smaller caps. Separately, headlines note that former administration economist Kevin Hassett is viewed as a front-runner for Fed chair (article reference). The policy direction remains uncertain, and investors will parse future communications for any shift in the reaction function. The calendar of upcoming data releases is not provided.
Equities and sector performance
Broadly, the market is consolidating after last week’s Thanksgiving rebound. SPY trades around 682.53 versus a prior close of 683.39, down roughly 0.13% at midday. QQQ is near 618.71 compared with 619.25 on Friday, down about 0.09%. DIA sits near 475.58 versus 477.18, down roughly 0.34%. Small caps lag: IWM is around 247.27 versus 248.75, off about 0.60%. The pattern is consistent with growth-heavy mega caps stabilizing while economically sensitive cohorts tread water in the face of soft manufacturing signals.
At the sector level, technology is the relative bright spot. XLK is modestly higher around 286.70 versus 286.22, up approximately 0.17%. The news flow helps: Nvidia’s $2 billion investment in Synopsys and the pair’s new partnership (article reference) underscores durable AI infrastructure demand and supports the design/software ecosystem. There are also recurring narratives about Big Tech’s outsized index impact—Alphabet and Nvidia accounting for a large share of year-to-date S&P 500 gains (article reference)—and fresh commentary featuring AI beneficiaries (article reference). While none of these items change fundamentals midday, they are reinforcing the idea that investors continue to pay for AI-linked visibility and cash flows.
Defensive pockets are mixed. Healthcare (XLV) is lower near 156.09 from 157.65, down about 0.99%. Part of the pressure may relate to headline risk: vaccine-related names reportedly came under pressure following an FDA official’s comments on a rare heart condition link (article reference). Financials (XLF) are marginally softer around 53.22 versus 53.33, down roughly 0.22%, in line with a mild drift higher in yields that weighs on existing bond portfolios and nudges funding curves. Energy (XLE) is a primary laggard, trading near 89.04 versus 90.63, down about 1.76%, despite OPEC+ confirming a three-month pause in supply increases amid surplus concerns (article reference). The emphasis on surplus aligns with ongoing debate about demand and inventories into year-end, and with oil’s weak year-to-date profile (article reference).
Company and theme highlights from the news
AI and cloud remain central to the equity narrative. A report outlines why Amazon could unlock material value as it expands cloud capacity (article reference), while a separate piece argues Meta may have among the clearer return paths on AI spending (article reference). Another analyst pushes back on bearishness around Oracle, noting limited downside even under conservative assumptions and meaningful upside if growth vectors hit (article reference). Elon Musk, meanwhile, highlighted Alphabet and Nvidia as non-Tesla AI plays (article reference). These thematics align with XLK’s relative firmness today and with the concentration dynamic that DataTrek emphasized—Alphabet and Nvidia’s outsize contribution to index gains (article reference).
In semis and EDA software, Nvidia’s investment in Synopsys, and their new partnership (article reference), reinforces the view that tooling and chip design IP are integral bottlenecks in the AI build-out. That can support software multiples even as investors become more selective across the broader tech complex. Elsewhere in software, Workday came under pressure after trimming subscription revenue guidance (article reference), a reminder that not all enterprise spend is immune to macro and that the market is discriminating between AI beneficiaries and more cyclical IT budgets.
Airlines and industrial supply chains face fresh uncertainties. Airbus-related headlines about A320 issues (article reference) raise the risk of near-term disruptions for carriers already navigating a busy holiday travel period. While this is not directly observable in today’s broad industrial/transport ETFs here, it adds to the soft ISM narrative and the pressure on small caps (IWM) that tend to be more domestically cyclical.
Bonds
Treasuries are offered across the curve in ETF terms. The long-duration TLT trades around 88.82 versus 90.21 on Friday, down roughly 1.5% intraday. The 7–10 year bucket (IEF) is near 96.72 versus 97.50, down about 0.8%. The 1–3 year SHY is modestly lower near 82.77 versus 83.08, down around 0.37%. Price action is consistent with a modest rise in yields from late last week’s levels and with the idea that growth worries are balanced by still-elevated short-end rates. With longer-run inflation expectations anchored near 2.3%–2.4%, duration will remain sensitive to any surprise in the next round of activity and price data (schedule not provided). From an allocation standpoint, the equity-bond correlation remains an important watch item: today’s concurrent softness in stocks and bonds is notable and a reminder that cross-asset hedging efficacy can vary by regime.
Commodities
Gold and silver are leading. GLD is up to roughly 390.07 from 387.88 (about +0.6%). SLV is stronger, near 53.16 versus 51.21 (about +3.8%). Firm precious metals alongside softer equities and weaker bonds point to a bid for alternative stores of value, potentially reflecting hedging against policy and growth uncertainty. Broad commodities (DBC) are slightly higher around 23.12 from 23.06 (about +0.26%).
Energy is mixed. USO edges lower to around 70.97 from 71.07 (about -0.14%), even after OPEC+ confirmed a three-month pause in planned supply increases amid surplus concerns (article reference). The market appears focused on demand risks and current stockpiles; a separate piece notes oil remains on track for its largest annual decline since the pandemic (article reference). Geopolitical tensions are also in the background as reports highlight risks to Black Sea shipping and ‘shadow fleet’ tankers (article reference). Natural gas (UNG) gains to about 15.14 from 14.73 (+2.8%), reflecting weather and storage dynamics not detailed here.
FX and crypto
The euro is modestly firmer. EURUSD marks around 1.1615 versus an open near 1.1590, a gain of roughly 0.22%. The move suggests some dollar softness against the single currency midday; additional drivers were not provided.
Crypto is consolidating. Bitcoin (BTCUSD) trades near 85,322 versus an open around 85,813, down about 0.6% on the session. Ether (ETHUSD) is around 2,751 versus an open near 2,823, off roughly 2.5%. Headlines point to renewed volatility following a sharp holiday move, and one report notes that the largest corporate holder of bitcoin indicated it may need to sell if conditions deteriorate (article reference). That overhang can amplify downside in thin liquidity windows. A CNBC note earlier also flagged bitcoin softness entering the new month (article reference).
Breadth, concentration and positioning
Breadth remains a focus. One article highlights that Alphabet and Nvidia together account for roughly a third of the S&P 500’s gains this year, with Big Tech nearly half of the total (article reference). While today’s XLK resilience reinforces this leadership, it also underscores concentration risk should AI monetization timelines or capex cycles disappoint. Conversely, a contrarian view from another strategist suggests value could reassert itself in 2026 (article reference). For now, the ISM contraction tone and tariff cost pressures keep cyclicals tepid, a dynamic visible in IWM’s relative weakness.
What’s next
With longer-dated yields near 4% on the 10-year and inflation expectations anchored, the next catalysts will likely come from incremental growth and price data and any policy communication around Fed leadership (no calendar details provided). In equities, leadership durability in AI-linked names, energy’s response to OPEC+ and inventory trends, and healthcare’s regulatory overhang are immediate watch items. In crypto, stabilization above recent support levels would help sentiment in broader risk.
Risks
Key near-term risks include: a deeper manufacturing slump tied to tariffs and global uncertainty (article reference); policy shifts and leadership headlines affecting the Fed’s reaction function (article reference); market concentration in a handful of AI leaders (article reference); energy market surplus conditions despite OPEC+ pauses (article reference); healthcare regulatory headlines impacting sentiment (article reference); operational risks in market plumbing (e.g., the recent CME trading halt on Friday, article reference); and crypto-specific liquidation risk if large holders are forced sellers (article reference).
Bottom line
At midday, U.S. equities are marginally lower with small caps lagging, tech steady on AI momentum, and energy and healthcare under pressure. Bonds are softer, precious metals are bid, the euro is firmer, and crypto is cooling. With macro expectations anchored but growth data mixed, markets look set to trade headline-by-headline until the next confirmed catalyst arrives (data schedule not provided).
Equities are softer at midday to open December, with major U.S. index ETFs slightly in the red and a defensive bid showing up in precious metals rather than in Treasuries. The S&P 500 proxy (SPY) is modestly lower versus Friday’s close, the Nasdaq 100 tracker (QQQ) is fractionally down, and the Dow (DIA) underperforms. Small caps (IWM) lag the most among the broad benchmarks. Sector leadership is narrow: technology is holding up on a fresh round of artificial intelligence newsflow, while energy and healthcare weigh on the tape. In rates, bond ETFs are down across the curve, consistent with a mild back-up in yields from late last week’s levels, while the dollar is mixed to slightly softer against the euro. Crypto is retracing part of its recent holiday rally.
Macro backdrop and rates
The Treasury curve remains relatively flat-to-gently upward sloping beyond the front end, based on the latest available readings. As of the most recent update, the 2-year sits at 3.45%, the 5-year at 3.56%, the 10-year at 4.00%, and the 30-year at 4.64%. The very front end remains elevated, with the 1-month at 4.06% and 3-month at 3.92%, leaving the ultra-short segment roughly on par with—or slightly above—the 10-year. That mix implies the market continues to discount slower growth and constrained inflation over the medium term while still demanding some premium at the long end.
On inflation, the latest CPI level stands at 324.368 with core CPI at 330.542 (September readings). Forward-looking gauges remain anchored: market-implied 5-year inflation expectations are 2.36% and 10-year at 2.31%, with the 5y5y forward at 2.25%. A model-based 1-year expectation is 2.74%, and the model 5- and 10-year are clustered around 2.32% and 2.29%, respectively. In short, longer-term expectations are close to the Federal Reserve’s target region by these measures, even as near-term price pressures may remain a touch higher. That anchoring provides a cushion for equity multiples, but it also leaves the Fed data-dependent and sensitive to any re-acceleration.
Economic data and policy headlines are in the mix. The Institute for Supply Management’s manufacturing report (article reference) points to contraction for a ninth month, citing tariff-related cost pressures and soft hiring. That backdrop aligns with today’s underperformance in cyclicals and smaller caps. Separately, headlines note that former administration economist Kevin Hassett is viewed as a front-runner for Fed chair (article reference). The policy direction remains uncertain, and investors will parse future communications for any shift in the reaction function. The calendar of upcoming data releases is not provided.
Equities and sector performance
Broadly, the market is consolidating after last week’s Thanksgiving rebound. SPY trades around 682.53 versus a prior close of 683.39, down roughly 0.13% at midday. QQQ is near 618.71 compared with 619.25 on Friday, down about 0.09%. DIA sits near 475.58 versus 477.18, down roughly 0.34%. Small caps lag: IWM is around 247.27 versus 248.75, off about 0.60%. The pattern is consistent with growth-heavy mega caps stabilizing while economically sensitive cohorts tread water in the face of soft manufacturing signals.
At the sector level, technology is the relative bright spot. XLK is modestly higher around 286.70 versus 286.22, up approximately 0.17%. The news flow helps: Nvidia’s $2 billion investment in Synopsys and the pair’s new partnership (article reference) underscores durable AI infrastructure demand and supports the design/software ecosystem. There are also recurring narratives about Big Tech’s outsized index impact—Alphabet and Nvidia accounting for a large share of year-to-date S&P 500 gains (article reference)—and fresh commentary featuring AI beneficiaries (article reference). While none of these items change fundamentals midday, they are reinforcing the idea that investors continue to pay for AI-linked visibility and cash flows.
Defensive pockets are mixed. Healthcare (XLV) is lower near 156.09 from 157.65, down about 0.99%. Part of the pressure may relate to headline risk: vaccine-related names reportedly came under pressure following an FDA official’s comments on a rare heart condition link (article reference). Financials (XLF) are marginally softer around 53.22 versus 53.33, down roughly 0.22%, in line with a mild drift higher in yields that weighs on existing bond portfolios and nudges funding curves. Energy (XLE) is a primary laggard, trading near 89.04 versus 90.63, down about 1.76%, despite OPEC+ confirming a three-month pause in supply increases amid surplus concerns (article reference). The emphasis on surplus aligns with ongoing debate about demand and inventories into year-end, and with oil’s weak year-to-date profile (article reference).
Company and theme highlights from the news
AI and cloud remain central to the equity narrative. A report outlines why Amazon could unlock material value as it expands cloud capacity (article reference), while a separate piece argues Meta may have among the clearer return paths on AI spending (article reference). Another analyst pushes back on bearishness around Oracle, noting limited downside even under conservative assumptions and meaningful upside if growth vectors hit (article reference). Elon Musk, meanwhile, highlighted Alphabet and Nvidia as non-Tesla AI plays (article reference). These thematics align with XLK’s relative firmness today and with the concentration dynamic that DataTrek emphasized—Alphabet and Nvidia’s outsize contribution to index gains (article reference).
In semis and EDA software, Nvidia’s investment in Synopsys, and their new partnership (article reference), reinforces the view that tooling and chip design IP are integral bottlenecks in the AI build-out. That can support software multiples even as investors become more selective across the broader tech complex. Elsewhere in software, Workday came under pressure after trimming subscription revenue guidance (article reference), a reminder that not all enterprise spend is immune to macro and that the market is discriminating between AI beneficiaries and more cyclical IT budgets.
Airlines and industrial supply chains face fresh uncertainties. Airbus-related headlines about A320 issues (article reference) raise the risk of near-term disruptions for carriers already navigating a busy holiday travel period. While this is not directly observable in today’s broad industrial/transport ETFs here, it adds to the soft ISM narrative and the pressure on small caps (IWM) that tend to be more domestically cyclical.
Bonds
Treasuries are offered across the curve in ETF terms. The long-duration TLT trades around 88.82 versus 90.21 on Friday, down roughly 1.5% intraday. The 7–10 year bucket (IEF) is near 96.72 versus 97.50, down about 0.8%. The 1–3 year SHY is modestly lower near 82.77 versus 83.08, down around 0.37%. Price action is consistent with a modest rise in yields from late last week’s levels and with the idea that growth worries are balanced by still-elevated short-end rates. With longer-run inflation expectations anchored near 2.3%–2.4%, duration will remain sensitive to any surprise in the next round of activity and price data (schedule not provided). From an allocation standpoint, the equity-bond correlation remains an important watch item: today’s concurrent softness in stocks and bonds is notable and a reminder that cross-asset hedging efficacy can vary by regime.
Commodities
Gold and silver are leading. GLD is up to roughly 390.07 from 387.88 (about +0.6%). SLV is stronger, near 53.16 versus 51.21 (about +3.8%). Firm precious metals alongside softer equities and weaker bonds point to a bid for alternative stores of value, potentially reflecting hedging against policy and growth uncertainty. Broad commodities (DBC) are slightly higher around 23.12 from 23.06 (about +0.26%).
Energy is mixed. USO edges lower to around 70.97 from 71.07 (about -0.14%), even after OPEC+ confirmed a three-month pause in planned supply increases amid surplus concerns (article reference). The market appears focused on demand risks and current stockpiles; a separate piece notes oil remains on track for its largest annual decline since the pandemic (article reference). Geopolitical tensions are also in the background as reports highlight risks to Black Sea shipping and ‘shadow fleet’ tankers (article reference). Natural gas (UNG) gains to about 15.14 from 14.73 (+2.8%), reflecting weather and storage dynamics not detailed here.
FX and crypto
The euro is modestly firmer. EURUSD marks around 1.1615 versus an open near 1.1590, a gain of roughly 0.22%. The move suggests some dollar softness against the single currency midday; additional drivers were not provided.
Crypto is consolidating. Bitcoin (BTCUSD) trades near 85,322 versus an open around 85,813, down about 0.6% on the session. Ether (ETHUSD) is around 2,751 versus an open near 2,823, off roughly 2.5%. Headlines point to renewed volatility following a sharp holiday move, and one report notes that the largest corporate holder of bitcoin indicated it may need to sell if conditions deteriorate (article reference). That overhang can amplify downside in thin liquidity windows. A CNBC note earlier also flagged bitcoin softness entering the new month (article reference).
Breadth, concentration and positioning
Breadth remains a focus. One article highlights that Alphabet and Nvidia together account for roughly a third of the S&P 500’s gains this year, with Big Tech nearly half of the total (article reference). While today’s XLK resilience reinforces this leadership, it also underscores concentration risk should AI monetization timelines or capex cycles disappoint. Conversely, a contrarian view from another strategist suggests value could reassert itself in 2026 (article reference). For now, the ISM contraction tone and tariff cost pressures keep cyclicals tepid, a dynamic visible in IWM’s relative weakness.
What’s next
With longer-dated yields near 4% on the 10-year and inflation expectations anchored, the next catalysts will likely come from incremental growth and price data and any policy communication around Fed leadership (no calendar details provided). In equities, leadership durability in AI-linked names, energy’s response to OPEC+ and inventory trends, and healthcare’s regulatory overhang are immediate watch items. In crypto, stabilization above recent support levels would help sentiment in broader risk.
Risks
Key near-term risks include: a deeper manufacturing slump tied to tariffs and global uncertainty (article reference); policy shifts and leadership headlines affecting the Fed’s reaction function (article reference); market concentration in a handful of AI leaders (article reference); energy market surplus conditions despite OPEC+ pauses (article reference); healthcare regulatory headlines impacting sentiment (article reference); operational risks in market plumbing (e.g., the recent CME trading halt on Friday, article reference); and crypto-specific liquidation risk if large holders are forced sellers (article reference).
Bottom line
At midday, U.S. equities are marginally lower with small caps lagging, tech steady on AI momentum, and energy and healthcare under pressure. Bonds are softer, precious metals are bid, the euro is firmer, and crypto is cooling. With macro expectations anchored but growth data mixed, markets look set to trade headline-by-headline until the next confirmed catalyst arrives (data schedule not provided).