State of Market: Midday 01/07/26
Midday market check: Tech steadies the tape as energy and cyclicals ease; bonds bid ahead of jobs data
S&P 500 and Nasdaq edge higher while Dow and small caps slip; oil and precious metals soften, Treasurys firmer with long-run inflation expectations anchored near ~2%–2.5%
TendieTensor.com State of Market Midday
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Equities are mixed at midday on Wednesday as investors digest a steady stream of macro signals, shifting commodity prices, and corporate headlines spanning energy, technology, and health care. The S&P 500 proxy (SPY) is fractionally higher versus Tuesday’s close, the Nasdaq 100 (QQQ) is outperforming, while the price-weighted Dow (DIA) and small caps (IWM) trade lower. Beneath the surface, sector leadership is concentrated in technology and health care, with financials and energy softer. In parallel, Treasurys are firmer across the intermediate and long end, precious metals are giving back part of their recent safe-haven bid, oil is lighter, and crypto is lower intraday.
Macro backdrop: yields, inflation, and expectations
The latest available Treasury curve data show a still-inverted front end and higher term premiums farther out: around 3.46% on the 2‑year, 3.71% on the 5‑year, 4.17% on the 10‑year, and 4.85% on the 30‑year (data as of 1/5). The shape—sub‑4% front end with a roughly 70 bps step-up to 10s and a further rise to the long bond—continues to frame equity valuation debates and duration positioning. Inflation data in hand reflect November readings for headline and core CPI index levels (data provided; year-over-year rates not provided). Importantly for risk assets and fixed income, market-based and model-estimated inflation expectations remain contained: a 5‑year breakeven near 2.28%, 10‑year near 2.24%, and a 5y5y forward near 2.21%, alongside a model 1‑year expectation around 3.20% that steps down toward 2.3%–2.4% across longer horizons (data as of December).
On growth and labor, midweek updates paint a nuanced picture. Private payrolls rose by 41,000 in December, according to ADP, suggesting the labor market may be soft but stabilizing heading into the new year. The services side of the economy—critical given its weight in GDP and employment—showed improvement in December, with employment expanding for the first time in seven months, according to a survey of the U.S. services sector. Conversely, manufacturing remains in contraction, with an ISM factory index reading signaling a continuation of the slump in December. Into Friday, market focus is squarely on the official jobs report, with several observers expecting the Treasury market to take its primary cue from labor data rather than geopolitical developments.
Equities and sectors: tech leadership, energy consolidation
At the index level, SPY is modestly higher intraday versus its prior close, while QQQ extends gains, supported by ongoing enthusiasm in AI and semiconductors. The Dow proxy DIA is lower versus Tuesday, reflecting pressure in select industrials and energy-heavy components, and IWM is underperforming as small caps ease back from recent strength.
Sector dispersion is clear. Technology (XLK) is up versus the prior close, supported by a cluster of AI and chip-cycle headlines. Analysts noted Nvidia’s latest platform signaling, arguing it raises the competitive bar for standalone chips, while AMD’s CES keynote emphasized cost and memory improvements and the secular demand for compute—both reinforcing AI infrastructure narratives. Beyond the marquee names, commentary highlighted that analog and other less-loved chip categories have started to participate, suggesting breadth within semiconductors is improving. There’s also renewed discussion that some networking-oriented AI beneficiaries, including companies like Cisco and Arista, could see catch-up interest after lagging the highest-flying peers. All told, the tone across chip and AI ecosystems remains constructive and consistent with XLK’s midday firmness.
Health care (XLV) is also trading higher versus its prior close despite crosscurrents within biopharma. A notable development is the U.S. availability of Novo Nordisk’s weight-loss pill, which a report says is pressuring shares of Eli Lilly and Viking Therapeutics. Separate headlines flagged potential revenue risk at Merck following changes to CDC HPV vaccine recommendations. The sector-level resilience suggests index gains are being carried by other components and subsectors even as select obesity and vaccine-exposed names face idiosyncratic pressure.
Financials (XLF) are lower intraday versus Tuesday, a pause after an impressive 2025 for the large money-center banks and diversified financials. A recent review noted big-bank outperformance last year and asked what comes next, but today’s tape reflects a consolidative tone with investors likely awaiting Friday’s labor data and the coming cadence of bank earnings. The curve configuration—front-end yields around the mid‑3% range and 10s above 4%—offers a mixed backdrop for net interest margins and fee businesses, keeping attention on near-term credit trends and management outlooks.
Energy, represented here by the sector ETF (XLE), is down midday. The move aligns with softer crude proxies (USO) and a run of reporting that has tempered the market’s initial enthusiasm around Venezuela’s potential supply path. Several pieces argue that while U.S. involvement could ultimately unlock heavy crude and create opportunities for U.S. refiners—given their ability to process heavier grades—the timeline, capital intensity, and geopolitical complexity argue for patience. Additional commentary cautioned that assumptions about swift production ramps may be unrealistic. One report explicitly cited Chevron’s shares falling as investors reassessed near-term payoff odds. Taken together, the narrative supports today’s consolidation across energy equities.
Bonds: a firm bid into data
Treasury ETFs are firmer intraday. The long-duration proxy TLT is higher versus the prior close, with IEF (7–10 year) also up, while front-end SHY is essentially flat to marginally lower. The bid aligns with anchored long-run inflation expectations and a macro calendar that places Friday’s jobs report at center stage for rate-path expectations. A recent column argued that bonds offer improved relative value versus stocks and gold—a view that, whether or not one endorses it, is consistent with today’s incremental duration demand.
Commodities: precious metals ease, oil softer, gas firmer
Precious metals are pulling back from recent strength. GLD is lower midday versus Tuesday, and SLV is also down. Earlier this week, safe-haven flows favored gold and silver in the wake of U.S. actions in Venezuela; today’s giveback suggests profit-taking and a recalibration alongside steadier rate expectations. Broad commodities (DBC) are softer as well. Oil, via USO, is down versus the prior close. Beyond Venezuela headlines, the demand-supply balance remains a key variable, but today’s directional move is clear. Natural gas (UNG) is an exception, trading higher versus Tuesday, potentially reflecting seasonal or regional dynamics (specific demand and storage data not provided).
FX and crypto
On the currency front, EURUSD is little changed around the provided mark; with no comparative prior reference in the data, directionality is not inferred. In digital assets, Bitcoin (BTCUSD) and Ether (ETHUSD) are lower intraday versus their provided opens. A recent perspective suggested Bitcoin’s relative weakness could presage a leadership handoff toward old‑economy equities this year; whether that thesis proves out, today’s crypto softness contrasts with the steadier tone in large-cap tech equities.
Policy, geopolitics, and notable corporate headlines
Geopolitical risk remains an overarching theme. The evolving U.S.–Venezuela dynamic is central to energy markets and policy-sensitive equities. One report indicated the U.S. could receive and sell tens of millions of barrels of Venezuelan oil under new arrangements, while others cautioned that operational, legal, and political hurdles make a straight-line ramp unlikely. Additional coverage highlighted that U.S. refiners, rather than upstream producers, could be nearer-term beneficiaries given their capacity to handle heavier crude.
In industrials and aerospace, Alaska Airlines announced its biggest order ever—more than 100 Boeing aircraft—underscoring continued demand for efficient narrowbodies and long-haul widebodies. Separately, investor commentary encouraged selectivity in cyclical exposure. In media, Warner Bros. reaffirmed that Netflix’s accepted proposal remains superior to a rival’s hostile approach, urging shareholders to reject the latter—a reminder that strategic M&A maneuvers continue to reshape entertainment assets. In sports and special situations, Manchester United shares climbed following a managerial change, highlighting how governance developments can drive price action even outside earnings windows.
Within technology, the AI compute narrative remains dominant. Nvidia’s latest platform messaging and AMD’s roadmap emphasize performance-per-dollar and memory efficiency in an environment of strong demand for training and inference. Commentary also spotlighted “underappreciated” AI beneficiaries in networking that could see improved relative performance as AI workloads proliferate across data centers. In software, select names have been called out by analysts for potential 2026 gains, though dispersion remains high and stock-picking matters.
Outlook
Into the afternoon and the balance of the week, markets will be most sensitive to labor data and any fresh guidance on growth, productivity, and inflation. Recent articles urged investors not to overlook productivity trends, which could complicate the policy calculus even if headline payrolls are uneventful. For rates, several observers expect Friday’s jobs report to set the tone more than the latest geopolitical developments, and today’s bid for duration is consistent with a “wait-and-see” stance. In equities, leadership concentration in tech persists, punctuated by improving breadth within semis, while energy is consolidating gains amid a more sober reassessment of timelines and capital intensity in Venezuela’s upstream revival. Health care’s resilience despite GLP‑1 competition headlines suggests investors are balancing secular growth with near-term product news.
Key near-term watch items include: Friday’s jobs report and revisions; follow-through in services activity after December’s pickup; any incremental guidance from policymakers or agencies affecting health care demand and vaccination protocols; and additional clarity on Venezuela’s oil logistics and U.S. refining runs. For crypto, an attempt to stabilize after today’s pullback would help sentiment; for FX, a quiet tape keeps the focus on relative growth and rate paths rather than idiosyncratic drivers.
Bottom line
Midway through Wednesday’s session, the path of least resistance remains sideways-to-up for the growth complex, supported by contained long-run inflation expectations and constructive AI-cycle narratives, while cyclicals and energy take a breather and bonds attract incremental demand ahead of Friday’s data. With dispersion elevated, selectivity and balance remain the operative words until the next macro catalyst provides clearer direction.
Equities are mixed at midday on Wednesday as investors digest a steady stream of macro signals, shifting commodity prices, and corporate headlines spanning energy, technology, and health care. The S&P 500 proxy (SPY) is fractionally higher versus Tuesday’s close, the Nasdaq 100 (QQQ) is outperforming, while the price-weighted Dow (DIA) and small caps (IWM) trade lower. Beneath the surface, sector leadership is concentrated in technology and health care, with financials and energy softer. In parallel, Treasurys are firmer across the intermediate and long end, precious metals are giving back part of their recent safe-haven bid, oil is lighter, and crypto is lower intraday.
Macro backdrop: yields, inflation, and expectations
The latest available Treasury curve data show a still-inverted front end and higher term premiums farther out: around 3.46% on the 2‑year, 3.71% on the 5‑year, 4.17% on the 10‑year, and 4.85% on the 30‑year (data as of 1/5). The shape—sub‑4% front end with a roughly 70 bps step-up to 10s and a further rise to the long bond—continues to frame equity valuation debates and duration positioning. Inflation data in hand reflect November readings for headline and core CPI index levels (data provided; year-over-year rates not provided). Importantly for risk assets and fixed income, market-based and model-estimated inflation expectations remain contained: a 5‑year breakeven near 2.28%, 10‑year near 2.24%, and a 5y5y forward near 2.21%, alongside a model 1‑year expectation around 3.20% that steps down toward 2.3%–2.4% across longer horizons (data as of December).
On growth and labor, midweek updates paint a nuanced picture. Private payrolls rose by 41,000 in December, according to ADP, suggesting the labor market may be soft but stabilizing heading into the new year. The services side of the economy—critical given its weight in GDP and employment—showed improvement in December, with employment expanding for the first time in seven months, according to a survey of the U.S. services sector. Conversely, manufacturing remains in contraction, with an ISM factory index reading signaling a continuation of the slump in December. Into Friday, market focus is squarely on the official jobs report, with several observers expecting the Treasury market to take its primary cue from labor data rather than geopolitical developments.
Equities and sectors: tech leadership, energy consolidation
At the index level, SPY is modestly higher intraday versus its prior close, while QQQ extends gains, supported by ongoing enthusiasm in AI and semiconductors. The Dow proxy DIA is lower versus Tuesday, reflecting pressure in select industrials and energy-heavy components, and IWM is underperforming as small caps ease back from recent strength.
Sector dispersion is clear. Technology (XLK) is up versus the prior close, supported by a cluster of AI and chip-cycle headlines. Analysts noted Nvidia’s latest platform signaling, arguing it raises the competitive bar for standalone chips, while AMD’s CES keynote emphasized cost and memory improvements and the secular demand for compute—both reinforcing AI infrastructure narratives. Beyond the marquee names, commentary highlighted that analog and other less-loved chip categories have started to participate, suggesting breadth within semiconductors is improving. There’s also renewed discussion that some networking-oriented AI beneficiaries, including companies like Cisco and Arista, could see catch-up interest after lagging the highest-flying peers. All told, the tone across chip and AI ecosystems remains constructive and consistent with XLK’s midday firmness.
Health care (XLV) is also trading higher versus its prior close despite crosscurrents within biopharma. A notable development is the U.S. availability of Novo Nordisk’s weight-loss pill, which a report says is pressuring shares of Eli Lilly and Viking Therapeutics. Separate headlines flagged potential revenue risk at Merck following changes to CDC HPV vaccine recommendations. The sector-level resilience suggests index gains are being carried by other components and subsectors even as select obesity and vaccine-exposed names face idiosyncratic pressure.
Financials (XLF) are lower intraday versus Tuesday, a pause after an impressive 2025 for the large money-center banks and diversified financials. A recent review noted big-bank outperformance last year and asked what comes next, but today’s tape reflects a consolidative tone with investors likely awaiting Friday’s labor data and the coming cadence of bank earnings. The curve configuration—front-end yields around the mid‑3% range and 10s above 4%—offers a mixed backdrop for net interest margins and fee businesses, keeping attention on near-term credit trends and management outlooks.
Energy, represented here by the sector ETF (XLE), is down midday. The move aligns with softer crude proxies (USO) and a run of reporting that has tempered the market’s initial enthusiasm around Venezuela’s potential supply path. Several pieces argue that while U.S. involvement could ultimately unlock heavy crude and create opportunities for U.S. refiners—given their ability to process heavier grades—the timeline, capital intensity, and geopolitical complexity argue for patience. Additional commentary cautioned that assumptions about swift production ramps may be unrealistic. One report explicitly cited Chevron’s shares falling as investors reassessed near-term payoff odds. Taken together, the narrative supports today’s consolidation across energy equities.
Bonds: a firm bid into data
Treasury ETFs are firmer intraday. The long-duration proxy TLT is higher versus the prior close, with IEF (7–10 year) also up, while front-end SHY is essentially flat to marginally lower. The bid aligns with anchored long-run inflation expectations and a macro calendar that places Friday’s jobs report at center stage for rate-path expectations. A recent column argued that bonds offer improved relative value versus stocks and gold—a view that, whether or not one endorses it, is consistent with today’s incremental duration demand.
Commodities: precious metals ease, oil softer, gas firmer
Precious metals are pulling back from recent strength. GLD is lower midday versus Tuesday, and SLV is also down. Earlier this week, safe-haven flows favored gold and silver in the wake of U.S. actions in Venezuela; today’s giveback suggests profit-taking and a recalibration alongside steadier rate expectations. Broad commodities (DBC) are softer as well. Oil, via USO, is down versus the prior close. Beyond Venezuela headlines, the demand-supply balance remains a key variable, but today’s directional move is clear. Natural gas (UNG) is an exception, trading higher versus Tuesday, potentially reflecting seasonal or regional dynamics (specific demand and storage data not provided).
FX and crypto
On the currency front, EURUSD is little changed around the provided mark; with no comparative prior reference in the data, directionality is not inferred. In digital assets, Bitcoin (BTCUSD) and Ether (ETHUSD) are lower intraday versus their provided opens. A recent perspective suggested Bitcoin’s relative weakness could presage a leadership handoff toward old‑economy equities this year; whether that thesis proves out, today’s crypto softness contrasts with the steadier tone in large-cap tech equities.
Policy, geopolitics, and notable corporate headlines
Geopolitical risk remains an overarching theme. The evolving U.S.–Venezuela dynamic is central to energy markets and policy-sensitive equities. One report indicated the U.S. could receive and sell tens of millions of barrels of Venezuelan oil under new arrangements, while others cautioned that operational, legal, and political hurdles make a straight-line ramp unlikely. Additional coverage highlighted that U.S. refiners, rather than upstream producers, could be nearer-term beneficiaries given their capacity to handle heavier crude.
In industrials and aerospace, Alaska Airlines announced its biggest order ever—more than 100 Boeing aircraft—underscoring continued demand for efficient narrowbodies and long-haul widebodies. Separately, investor commentary encouraged selectivity in cyclical exposure. In media, Warner Bros. reaffirmed that Netflix’s accepted proposal remains superior to a rival’s hostile approach, urging shareholders to reject the latter—a reminder that strategic M&A maneuvers continue to reshape entertainment assets. In sports and special situations, Manchester United shares climbed following a managerial change, highlighting how governance developments can drive price action even outside earnings windows.
Within technology, the AI compute narrative remains dominant. Nvidia’s latest platform messaging and AMD’s roadmap emphasize performance-per-dollar and memory efficiency in an environment of strong demand for training and inference. Commentary also spotlighted “underappreciated” AI beneficiaries in networking that could see improved relative performance as AI workloads proliferate across data centers. In software, select names have been called out by analysts for potential 2026 gains, though dispersion remains high and stock-picking matters.
Outlook
Into the afternoon and the balance of the week, markets will be most sensitive to labor data and any fresh guidance on growth, productivity, and inflation. Recent articles urged investors not to overlook productivity trends, which could complicate the policy calculus even if headline payrolls are uneventful. For rates, several observers expect Friday’s jobs report to set the tone more than the latest geopolitical developments, and today’s bid for duration is consistent with a “wait-and-see” stance. In equities, leadership concentration in tech persists, punctuated by improving breadth within semis, while energy is consolidating gains amid a more sober reassessment of timelines and capital intensity in Venezuela’s upstream revival. Health care’s resilience despite GLP‑1 competition headlines suggests investors are balancing secular growth with near-term product news.
Key near-term watch items include: Friday’s jobs report and revisions; follow-through in services activity after December’s pickup; any incremental guidance from policymakers or agencies affecting health care demand and vaccination protocols; and additional clarity on Venezuela’s oil logistics and U.S. refining runs. For crypto, an attempt to stabilize after today’s pullback would help sentiment; for FX, a quiet tape keeps the focus on relative growth and rate paths rather than idiosyncratic drivers.
Bottom line
Midway through Wednesday’s session, the path of least resistance remains sideways-to-up for the growth complex, supported by contained long-run inflation expectations and constructive AI-cycle narratives, while cyclicals and energy take a breather and bonds attract incremental demand ahead of Friday’s data. With dispersion elevated, selectivity and balance remain the operative words until the next macro catalyst provides clearer direction.