State of Market: Midday 01/14/26
Midday market check: Tech-heavy benchmarks lag as energy and precious metals rally; bonds firmer with long-end yields elevated
SPY and QQQ trade lower while small caps edge up; oil and silver strength lift commodities; bond ETFs advance amid anchored inflation expectations and lingering policy uncertainty
TendieTensor.com State of Market Midday
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Overview
At midday, U.S. equities show a defensive tilt with notable dispersion across major benchmarks and factor exposures. The S&P 500 proxy (SPY) is trading at 687.66, below its prior close of 693.77, while the Nasdaq-100 proxy (QQQ) is underperforming at 616.40 versus 626.24 previously. The Dow industrials proxy (DIA) is modestly softer at 489.97 versus 491.94, and small caps are bucking the broader weakness as the Russell 2000 proxy (IWM) prints 261.99 versus 261.35 yesterday. Under the surface, sector leadership is rotating toward energy and healthcare, while technology lags. Precious metals and oil are firm, and Treasury ETFs are higher across the curve.
Macro backdrop: yields, inflation, and expectations
The latest available Treasury curve levels point to a still-steep long end. As of 2026-01-12, the 2-year yield sits near 3.54%, the 5-year at 3.77%, the 10-year at 4.19%, and the 30-year at 4.83%. This configuration maintains a positive term premium on the long end, with the 10s–2s spread positive by roughly 65 basis points and the 30-year notably higher than the 10-year. For equities, a higher long-end anchor tends to pressure duration-sensitive growth and long-duration cash flows, aligning with today’s relative weakness in QQQ and XLK and the outperformance of energy and hard-asset proxies.
On inflation, the most recent CPI reading (December 2025) shows headline CPI at 326.03 and core CPI at 331.86 (index levels). Article flow remains focused on the composition of consumer price pressures, with reports noting where middle-class budgets feel the squeeze most and wholesale-cost dynamics that point to persistent inflation pressures during the government shutdown period. Forward inflation expectations, however, appear anchored: the 1-year modeled expectation stands near 2.60%, with 5-year at about 2.33% and 10-year at roughly 2.32%. Anchored medium-term expectations, paired with a still-elevated long end, are consistent with the day’s constructive moves in Treasury ETFs and the market’s preference for quality and cash-flow resilience.
Policy remains a key narrative thread. Articles highlight broad support among global central bankers for Federal Reserve Chair Jerome Powell amid political tensions, as well as commentary that challenges the Fed’s independence and forecasts that rate policy should drift toward a 3% equilibrium. These narratives matter because credibility and policy path clarity feed directly into term premiums and risk appetite; any perceived erosion of central bank independence would risk higher inflation premia and more volatile long-end rates. For now, expectations remain broadly moored around the low-2s over 5–10 years.
Equities and sectors
- SPY: 687.66 versus 693.77 (down on the day). The large-cap tape is softer, in part reflecting drag from mega-cap tech and software, consistent with recent article themes around competitive pressures in AI and investor scrutiny of software monetization.
- QQQ: 616.40 versus 626.24 (lower). The growth-heavy Nasdaq-100 proxy is underperforming, aligning with weakness in technology. Reports this week flagged ongoing questions around AI monetization for certain software names and competitive flare-ups in consumer AI.
- DIA: 489.97 versus 491.94 (lower). The Dow’s more cyclically balanced profile provides modest cushion, but it still trades down at midday.
- IWM: 261.99 versus 261.35 (higher). Small caps are fractionally higher, consistent with article narratives suggesting that lower borrowing costs and tax considerations could favor smaller companies in 2026. The modest bid here contrasts with growth-heavy weakness and implies selective risk appetite tied to domestic cyclicality.
Sector ETFs show pronounced rotation:
- XLK (Technology): 143.86 versus 146.48 (lower). Tech is the day’s laggard cohort among the sectors provided. Article flow underscores a mix of AI competition, software pricing/monetization questions, and product-cycle uncertainty. Headlines around Google’s new “Personal Intelligence” in the Gemini app, framed as a competitive shot at Apple, exemplify the intensified platform competition in consumer AI.
- XLF (Financials): 53.94 versus 54.23 (lower). Financials are modestly weaker despite the ongoing bank-earnings cadence. Articles note stronger-than-expected results from JPMorgan and Bank of America and a mixed read from Wells Fargo and Citigroup’s Russia-related charge. The sector’s price action suggests investors are balancing resilient consumer/spending commentary with curve shape and regulatory risk (e.g., credit-card routing proposals and APR caps referenced in several pieces).
- XLE (Energy): 43.15 versus 42.85 (higher). Energy leads among the sectors tracked here, propelled by firmer oil. Narratives about geopolitical risk in the Middle East and the strategic importance of chokepoints like the Strait of Hormuz, coupled with company-specific headlines (including a new high in a major integrated energy name), reinforce the bid into oil-linked equities.
- XLV (Healthcare): 157.06 versus 156.74 (slightly higher). The sector’s defensive/cash-flow profile aligns with today’s tone and with continued interest in weight-loss and cardiometabolic treatment themes highlighted in interviews with major pharma leaders.
Bond market
Treasury ETFs are firmer across the curve:
- TLT: 88.33 versus 87.82 (higher). Strength at the long end is consistent with the day’s equity factor mix and anchored medium-term inflation expectations, although the outright 30-year yield remains elevated in the context of the latest curve snapshot.
- IEF: 96.55 versus 96.30 (higher). Intermediate duration is also bid, suggesting some duration demand as equities consolidate.
- SHY: 82.90 versus 82.85 (slightly higher). The front end is steady, consistent with market views that the policy path is likely to grind lower but that the larger re-pricing may be behind us near term. Commentary calling for a policy-rate drift toward 3% is directionally consistent with the modest bid in duration.
Commodities
The commodity complex is a focal point today, with precious metals and oil advancing while natural gas slips.
- GLD: 425.50 versus 421.63 (higher). Gold continues to attract interest as a portfolio hedge, even as some strategists caution that its diversification properties can be overstated. The move aligns with a day of softer risk appetite in growth equities and policy uncertainty headlines.
- SLV: 83.04 versus 78.60 (notably higher). Silver strength is pronounced, echoing articles noting that silver has pushed above a psychologically important milestone with speculation about further upside despite higher trading costs imposed by the futures exchange. The outsized move in SLV underscores silver’s momentum and its cyclical/industrial demand linkage.
- USO: 74.44 versus 73.48 (higher). Oil is firm, with article flow emphasizing renewed attention to Middle East risks that could affect supply routes. Energy equities’ relative strength corresponds with USO’s intraday gain.
- UNG: 10.30 versus 11.32 (lower). Natural gas is under pressure, highlighting the idiosyncratic supply/demand and weather sensitivities distinct from crude oil dynamics.
- DBC: 23.55 versus 23.37 (higher). Broad commodities are bid, reflecting gains in energy and metals.
FX and crypto
- EURUSD is essentially flat on the session at 1.1643, little changed from its open of 1.16446. The stability maps to the day’s benign moves in front-end U.S. rates and the absence of fresh macro catalysts from Europe in the provided flow.
- BTCUSD trades near 97,077, above its open around 95,199. The intraday bid fits a broader risk-mixed day where crypto can still attract flows given its idiosyncratic catalysts. ETHUSD is also higher near 3,352 versus a 3,337 open. An article noting controversy around a city-branded token underscores that pockets of crypto remain volatile and highly speculative, even as the largest networks display relative resilience today.
Notable corporate and thematic headlines
- AI platform competition intensifies: Google launched a “Personal Intelligence” capability in its Gemini app, directly challenging Apple’s initiative in the consumer AI domain. This reinforces the arms race among platform companies and ties back to the market’s reassessment of software monetization and competitive moats.
- Software scrutiny: Articles point to pressure in Salesforce and Adobe amid investor debate over AI’s net impact on their business models. Another piece highlights Adobe’s multiyear low and the need to demonstrate AI-driven revenue lift.
- Semiconductors and infrastructure: Commentary spotlights improving demand and analyst upgrades for certain chipmakers and foundry ambitions at legacy CPU vendors. Another note highlights potential upside from satellite communications and space-related demand for specialized chip companies.
- Banks and the consumer: JPMorgan and Bank of America delivered better-than-expected earnings alongside remarks about a resilient U.S. economy and steady consumers. Wells Fargo’s revenue miss and Citigroup’s Russia-related loss provide a mixed counterbalance. Policy proposals around credit-card routing and APR caps introduce sector-specific regulatory overhang.
- Energy and geopolitics: Oil’s strength comes as articles revisit U.S.–Iran tensions and the importance of the Strait of Hormuz. Separately, a large integrated oil company’s share-price milestones and comments about Venezuela provide a lens on supply optionality and geopolitical risk premiums.
- Industrials and aerospace: Boeing’s order momentum and deliveries update highlight an improving commercial aerospace backdrop, with follow-on orders reinforcing multiyear demand visibility.
- Transportation: Delta’s revenue shortfall in the wake of a shutdown reflects idiosyncratic operating headwinds even as travel demand trends remain a key macro watch item.
- Metals: Silver’s surge is front and center, with investor attention on both momentum and the implications of higher margin requirements. Gold also advances, though one strategist argues against overreliance on gold as a portfolio stabilizer.
- Quantum and IPO pipeline: Honeywell’s plan to take Quantinuum public via a confidential SEC filing suggests the innovation and listing pipelines remain active in select deep-tech verticals.
Putting it together
Today’s tape reflects classic cross-asset dynamics: a softer growth/tech-led equity complex (QQQ, XLK lower), a bid to duration (TLT, IEF higher) amid anchored 5–10 year inflation expectations around the low-2% area, and leadership from energy and precious metals (XLE, GLD, SLV higher) as geopolitical and policy uncertainties percolate. Small caps’ modest outperformance (IWM higher) signals that investors still see cyclical opportunities tied to potential easing in financial conditions, even as long-end yields remain elevated by historical standards.
What to watch next
- Earnings season breadth: Bank earnings continue to set the tone for credit quality, deposit trends, and net interest income trajectories. Tech and software guidance on AI monetization and spending priorities will be pivotal for XLK and QQQ.
- Policy path and Fed communication: Any developments around central bank independence and the evolving policy outlook could affect long-end term premiums. Commentary arguing for a 3% equilibrium policy rate will be weighed against realized inflation and growth.
- Inflation and consumer health: Follow-through from wholesale-cost signals and category-level CPI pressures will inform margins, pricing power, and consumption. Retail sales commentary suggests the consumer is still active; watch for confirmation in high-frequency data and corporate updates.
- Geopolitics and energy: Oil’s sensitivity to Middle East tensions, shipping routes, and supply headlines remains a key variable for XLE and USO.
- Metals momentum: Sustained strength in silver and gold would reinforce the bid into real assets; the durability of flows in the face of higher trading costs (for silver futures) is an important test.
Risks
- Policy and regulatory shocks: Proposals affecting credit-card routing/APRs and any headline risk around Fed autonomy could reprice financials and the long end of the curve.
- Inflation persistence: If wholesale costs bleed into core consumer prices, expectations could drift, challenging the duration bid and pressuring growth multiples.
- Geopolitical escalation: Energy market disruptions could extend oil’s rally, impacting input costs and global growth expectations.
- Profitability and AI ROI: Software and platform names face scrutiny on AI-driven revenue and margin expansion; disappointments could weigh on broader tech leadership.
- China/U.S. tech frictions: Reports of crackdowns affecting cybersecurity names highlight ongoing regulatory and market-access risks in cross-border tech.
Bottom line
The midday picture is one of rotation and risk recalibration. Growth-heavy benchmarks are consolidating, energy and metals are asserting leadership, and bonds are modestly bid despite a still-elevated long end. With earnings season moving into full swing and policy narratives in flux, investors appear to be favoring cash-flow resilience, commodity leverage, and duration ballast while they seek clearer evidence that AI investment is translating into sustained revenue growth and that inflation pressures remain contained within anchored expectations.
Overview
At midday, U.S. equities show a defensive tilt with notable dispersion across major benchmarks and factor exposures. The S&P 500 proxy (SPY) is trading at 687.66, below its prior close of 693.77, while the Nasdaq-100 proxy (QQQ) is underperforming at 616.40 versus 626.24 previously. The Dow industrials proxy (DIA) is modestly softer at 489.97 versus 491.94, and small caps are bucking the broader weakness as the Russell 2000 proxy (IWM) prints 261.99 versus 261.35 yesterday. Under the surface, sector leadership is rotating toward energy and healthcare, while technology lags. Precious metals and oil are firm, and Treasury ETFs are higher across the curve.
Macro backdrop: yields, inflation, and expectations
The latest available Treasury curve levels point to a still-steep long end. As of 2026-01-12, the 2-year yield sits near 3.54%, the 5-year at 3.77%, the 10-year at 4.19%, and the 30-year at 4.83%. This configuration maintains a positive term premium on the long end, with the 10s–2s spread positive by roughly 65 basis points and the 30-year notably higher than the 10-year. For equities, a higher long-end anchor tends to pressure duration-sensitive growth and long-duration cash flows, aligning with today’s relative weakness in QQQ and XLK and the outperformance of energy and hard-asset proxies.
On inflation, the most recent CPI reading (December 2025) shows headline CPI at 326.03 and core CPI at 331.86 (index levels). Article flow remains focused on the composition of consumer price pressures, with reports noting where middle-class budgets feel the squeeze most and wholesale-cost dynamics that point to persistent inflation pressures during the government shutdown period. Forward inflation expectations, however, appear anchored: the 1-year modeled expectation stands near 2.60%, with 5-year at about 2.33% and 10-year at roughly 2.32%. Anchored medium-term expectations, paired with a still-elevated long end, are consistent with the day’s constructive moves in Treasury ETFs and the market’s preference for quality and cash-flow resilience.
Policy remains a key narrative thread. Articles highlight broad support among global central bankers for Federal Reserve Chair Jerome Powell amid political tensions, as well as commentary that challenges the Fed’s independence and forecasts that rate policy should drift toward a 3% equilibrium. These narratives matter because credibility and policy path clarity feed directly into term premiums and risk appetite; any perceived erosion of central bank independence would risk higher inflation premia and more volatile long-end rates. For now, expectations remain broadly moored around the low-2s over 5–10 years.
Equities and sectors
- SPY: 687.66 versus 693.77 (down on the day). The large-cap tape is softer, in part reflecting drag from mega-cap tech and software, consistent with recent article themes around competitive pressures in AI and investor scrutiny of software monetization.
- QQQ: 616.40 versus 626.24 (lower). The growth-heavy Nasdaq-100 proxy is underperforming, aligning with weakness in technology. Reports this week flagged ongoing questions around AI monetization for certain software names and competitive flare-ups in consumer AI.
- DIA: 489.97 versus 491.94 (lower). The Dow’s more cyclically balanced profile provides modest cushion, but it still trades down at midday.
- IWM: 261.99 versus 261.35 (higher). Small caps are fractionally higher, consistent with article narratives suggesting that lower borrowing costs and tax considerations could favor smaller companies in 2026. The modest bid here contrasts with growth-heavy weakness and implies selective risk appetite tied to domestic cyclicality.
Sector ETFs show pronounced rotation:
- XLK (Technology): 143.86 versus 146.48 (lower). Tech is the day’s laggard cohort among the sectors provided. Article flow underscores a mix of AI competition, software pricing/monetization questions, and product-cycle uncertainty. Headlines around Google’s new “Personal Intelligence” in the Gemini app, framed as a competitive shot at Apple, exemplify the intensified platform competition in consumer AI.
- XLF (Financials): 53.94 versus 54.23 (lower). Financials are modestly weaker despite the ongoing bank-earnings cadence. Articles note stronger-than-expected results from JPMorgan and Bank of America and a mixed read from Wells Fargo and Citigroup’s Russia-related charge. The sector’s price action suggests investors are balancing resilient consumer/spending commentary with curve shape and regulatory risk (e.g., credit-card routing proposals and APR caps referenced in several pieces).
- XLE (Energy): 43.15 versus 42.85 (higher). Energy leads among the sectors tracked here, propelled by firmer oil. Narratives about geopolitical risk in the Middle East and the strategic importance of chokepoints like the Strait of Hormuz, coupled with company-specific headlines (including a new high in a major integrated energy name), reinforce the bid into oil-linked equities.
- XLV (Healthcare): 157.06 versus 156.74 (slightly higher). The sector’s defensive/cash-flow profile aligns with today’s tone and with continued interest in weight-loss and cardiometabolic treatment themes highlighted in interviews with major pharma leaders.
Bond market
Treasury ETFs are firmer across the curve:
- TLT: 88.33 versus 87.82 (higher). Strength at the long end is consistent with the day’s equity factor mix and anchored medium-term inflation expectations, although the outright 30-year yield remains elevated in the context of the latest curve snapshot.
- IEF: 96.55 versus 96.30 (higher). Intermediate duration is also bid, suggesting some duration demand as equities consolidate.
- SHY: 82.90 versus 82.85 (slightly higher). The front end is steady, consistent with market views that the policy path is likely to grind lower but that the larger re-pricing may be behind us near term. Commentary calling for a policy-rate drift toward 3% is directionally consistent with the modest bid in duration.
Commodities
The commodity complex is a focal point today, with precious metals and oil advancing while natural gas slips.
- GLD: 425.50 versus 421.63 (higher). Gold continues to attract interest as a portfolio hedge, even as some strategists caution that its diversification properties can be overstated. The move aligns with a day of softer risk appetite in growth equities and policy uncertainty headlines.
- SLV: 83.04 versus 78.60 (notably higher). Silver strength is pronounced, echoing articles noting that silver has pushed above a psychologically important milestone with speculation about further upside despite higher trading costs imposed by the futures exchange. The outsized move in SLV underscores silver’s momentum and its cyclical/industrial demand linkage.
- USO: 74.44 versus 73.48 (higher). Oil is firm, with article flow emphasizing renewed attention to Middle East risks that could affect supply routes. Energy equities’ relative strength corresponds with USO’s intraday gain.
- UNG: 10.30 versus 11.32 (lower). Natural gas is under pressure, highlighting the idiosyncratic supply/demand and weather sensitivities distinct from crude oil dynamics.
- DBC: 23.55 versus 23.37 (higher). Broad commodities are bid, reflecting gains in energy and metals.
FX and crypto
- EURUSD is essentially flat on the session at 1.1643, little changed from its open of 1.16446. The stability maps to the day’s benign moves in front-end U.S. rates and the absence of fresh macro catalysts from Europe in the provided flow.
- BTCUSD trades near 97,077, above its open around 95,199. The intraday bid fits a broader risk-mixed day where crypto can still attract flows given its idiosyncratic catalysts. ETHUSD is also higher near 3,352 versus a 3,337 open. An article noting controversy around a city-branded token underscores that pockets of crypto remain volatile and highly speculative, even as the largest networks display relative resilience today.
Notable corporate and thematic headlines
- AI platform competition intensifies: Google launched a “Personal Intelligence” capability in its Gemini app, directly challenging Apple’s initiative in the consumer AI domain. This reinforces the arms race among platform companies and ties back to the market’s reassessment of software monetization and competitive moats.
- Software scrutiny: Articles point to pressure in Salesforce and Adobe amid investor debate over AI’s net impact on their business models. Another piece highlights Adobe’s multiyear low and the need to demonstrate AI-driven revenue lift.
- Semiconductors and infrastructure: Commentary spotlights improving demand and analyst upgrades for certain chipmakers and foundry ambitions at legacy CPU vendors. Another note highlights potential upside from satellite communications and space-related demand for specialized chip companies.
- Banks and the consumer: JPMorgan and Bank of America delivered better-than-expected earnings alongside remarks about a resilient U.S. economy and steady consumers. Wells Fargo’s revenue miss and Citigroup’s Russia-related loss provide a mixed counterbalance. Policy proposals around credit-card routing and APR caps introduce sector-specific regulatory overhang.
- Energy and geopolitics: Oil’s strength comes as articles revisit U.S.–Iran tensions and the importance of the Strait of Hormuz. Separately, a large integrated oil company’s share-price milestones and comments about Venezuela provide a lens on supply optionality and geopolitical risk premiums.
- Industrials and aerospace: Boeing’s order momentum and deliveries update highlight an improving commercial aerospace backdrop, with follow-on orders reinforcing multiyear demand visibility.
- Transportation: Delta’s revenue shortfall in the wake of a shutdown reflects idiosyncratic operating headwinds even as travel demand trends remain a key macro watch item.
- Metals: Silver’s surge is front and center, with investor attention on both momentum and the implications of higher margin requirements. Gold also advances, though one strategist argues against overreliance on gold as a portfolio stabilizer.
- Quantum and IPO pipeline: Honeywell’s plan to take Quantinuum public via a confidential SEC filing suggests the innovation and listing pipelines remain active in select deep-tech verticals.
Putting it together
Today’s tape reflects classic cross-asset dynamics: a softer growth/tech-led equity complex (QQQ, XLK lower), a bid to duration (TLT, IEF higher) amid anchored 5–10 year inflation expectations around the low-2% area, and leadership from energy and precious metals (XLE, GLD, SLV higher) as geopolitical and policy uncertainties percolate. Small caps’ modest outperformance (IWM higher) signals that investors still see cyclical opportunities tied to potential easing in financial conditions, even as long-end yields remain elevated by historical standards.
What to watch next
- Earnings season breadth: Bank earnings continue to set the tone for credit quality, deposit trends, and net interest income trajectories. Tech and software guidance on AI monetization and spending priorities will be pivotal for XLK and QQQ.
- Policy path and Fed communication: Any developments around central bank independence and the evolving policy outlook could affect long-end term premiums. Commentary arguing for a 3% equilibrium policy rate will be weighed against realized inflation and growth.
- Inflation and consumer health: Follow-through from wholesale-cost signals and category-level CPI pressures will inform margins, pricing power, and consumption. Retail sales commentary suggests the consumer is still active; watch for confirmation in high-frequency data and corporate updates.
- Geopolitics and energy: Oil’s sensitivity to Middle East tensions, shipping routes, and supply headlines remains a key variable for XLE and USO.
- Metals momentum: Sustained strength in silver and gold would reinforce the bid into real assets; the durability of flows in the face of higher trading costs (for silver futures) is an important test.
Risks
- Policy and regulatory shocks: Proposals affecting credit-card routing/APRs and any headline risk around Fed autonomy could reprice financials and the long end of the curve.
- Inflation persistence: If wholesale costs bleed into core consumer prices, expectations could drift, challenging the duration bid and pressuring growth multiples.
- Geopolitical escalation: Energy market disruptions could extend oil’s rally, impacting input costs and global growth expectations.
- Profitability and AI ROI: Software and platform names face scrutiny on AI-driven revenue and margin expansion; disappointments could weigh on broader tech leadership.
- China/U.S. tech frictions: Reports of crackdowns affecting cybersecurity names highlight ongoing regulatory and market-access risks in cross-border tech.
Bottom line
The midday picture is one of rotation and risk recalibration. Growth-heavy benchmarks are consolidating, energy and metals are asserting leadership, and bonds are modestly bid despite a still-elevated long end. With earnings season moving into full swing and policy narratives in flux, investors appear to be favoring cash-flow resilience, commodity leverage, and duration ballast while they seek clearer evidence that AI investment is translating into sustained revenue growth and that inflation pressures remain contained within anchored expectations.