State of Market: Midday 01/12/26
Midday Market: Precious metals surge; tech leads while financials lag as policy uncertainty rises
As of 1:30 p.m. ET, SPY, QQQ and IWM grind higher, GLD and SLV jump, oil and natural gas firm, and long-duration Treasurys dip slightly with the 10-year around 4.19%.
TendieTensor.com State of Market Midday
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Overview
U.S. equities are holding modest gains at midday Monday, with leadership tilting back toward large-cap technology and small-caps while financials and defensives lag. As of 1:30 p.m. ET, SPY trades at 695.12, up about 0.15% versus Friday’s close of 694.07, and QQQ is at 628.14, up roughly 0.24% from 626.65. The Dow proxy DIA is little changed at 495.19 (+0.03%), and small-cap IWM outperforms at 261.19 (+0.37%).
The macro backdrop features slightly softer long-duration Treasurys and a notable bid for hard assets. Gold (GLD 423.43) is up about 2.16% on the day and silver (SLV 77.33) is stronger still, up about 6.84%. Broad commodities (DBC 23.12) and crude oil (USO 71.23) are firmer, and natural gas (UNG 11.18) rallies about 7.5%. Financials (XLF 55.12) are under pressure ahead of big-bank earnings and amid rising policy noise around the Federal Reserve. Technology (XLK 147.14) advances.
Macro: yields, inflation, expectations
Treasury yields imply a still-steep curve versus the front end. The latest available readings show the 2-year at 3.49%, the 5-year at 3.74%, the 10-year at 4.19% and the 30-year at 4.85%. That configuration—front end below the long end—aligns with the modest pressure seen in long-duration bond ETFs at midday. Inflation context remains constructive: the latest CPI index stands at 325.031 with core CPI at 331.068 (index levels; change rates not provided here). Market-based inflation expectations sit near long-run anchors: about 2.28% for 5-year and 2.24% for 10-year break-evens, while a model-based 1-year measure is 3.20%. The 5y5y forward is near 2.21% and model-based 10- and 30-year gauges cluster around 2.34% to 2.44%, suggesting long-term inflation expectations remain well contained even as near-term measures are modestly higher.
A separate layer of macro uncertainty comes from the escalating political battle over the Fed. Reporting notes that past Fed chairs and Treasury officials publicly backed Chair Jerome Powell (CNBC), while Powell himself warned that a Justice Department investigation threatens the central bank’s independence (MarketWatch). Markets appear to be expressing some of that uncertainty via haven buying in precious metals, consistent with commentary that “precious metal prices surge” as the conflict intensifies (MarketWatch). Meanwhile, bank earnings loom, with a MarketWatch preview highlighting critical metrics investors will scrutinize as the largest U.S. banks kick off reporting.
Equities and sectors
Breadth is mixed but tilts constructive given small-cap leadership. By fund:
- SPY 695.12 vs. 694.07 prior close: +0.15%.
- QQQ 628.14 vs. 626.65: +0.24%.
- DIA 495.19 vs. 495.02: +0.03%.
- IWM 261.19 vs. 260.23: +0.37%.
Sector performance is uneven:
- Technology (XLK 147.14 vs. 146.15) is up about 0.68%, pacing the tape as investors continue to reward AI-adjacent and infrastructure plays.
- Financials (XLF 55.12 vs. 55.73) fall about 1.10% into earnings, reflecting both pre-results positioning and policy risk sensitivity.
- Utilities (XLU, last 42.45 vs. 42.51) are fractionally lower (-0.15%).
- Health Care (XLV 156.38 vs. 157.31) is down about 0.59%.
News flow reinforces the current leadership themes. On the tech front, multiple pieces keep AI at the forefront. MarketWatch reports Apple has reportedly sealed a long-rumored partnership with Google’s Gemini, which some see as a catalyst to firm up Apple’s AI narrative. Additional MarketWatch coverage argues Apple’s recent stock pressure may be overdone and that overlooked iPhone strength and a clearer AI strategy could support a rebound. Elsewhere, MarketWatch flags Amazon and Meta as potential “Magnificent Seven” standouts in 2026 as the market seeks tangible returns on AI investments; another piece positions Oracle and Amazon as underappreciated AI infrastructure beneficiaries. A Bloomberg article compares Nvidia and Tesla’s divergent autonomy strategies, highlighting the breadth of AI’s industrial reach.
AI’s spillover into industrials and infrastructure remains a theme. CNBC’s Investing Club notes a favorable call on an industrial tied to the AI buildout, while MarketWatch points to top chip picks spanning established leaders and optical components. This aligns with the midday sector tape—tech leadership with small-cap strength—while defensives remain subdued.
At the same time, media and telecom M&A headlines inject idiosyncratic risk into specific names. Paramount is suing Warner Bros. Discovery and advancing a competing slate of directors to push its takeover bid (MarketWatch; CNBC). Netflix features in the dispute as the yardstick bid that WBD’s board deemed superior, according to the reporting (MarketWatch). While we do not have real-time prices for those single-name stocks in today’s data, the governance and transaction uncertainty can create episodic volatility for the media cohort.
Consumer and retail narratives are mixed. MarketWatch highlights Walmart’s stock surging after AI initiatives and Nasdaq-100 inclusion, while another piece explains Abercrombie & Fitch’s drop following a modest tweak to its sales growth outlook. These crosscurrents mirror the broader market’s preference for companies delivering clear technology leverage or durable unit economics, and skepticism toward narratives lacking near-term proof points.
Bonds
Treasury ETFs are marginally lower at midday, consistent with the 10-year yield near 4.19%:
- TLT 87.87 vs. 87.93: -0.07%.
- IEF 96.28 vs. 96.30: -0.02%.
- SHY 82.84 vs. 82.83: +0.01%.
The slight dip in long-duration prices alongside a steady-to-anchored inflation-expectations profile suggests investors are more focused on term premium, supply, and policy frictions than on an inflation surprise. A lighter regulatory tone towards banks anticipated in earnings previews (MarketWatch) has not yet translated into outperformance for financials today, likely due to the juxtaposition of policy headlines and earnings uncertainty. Separately, ongoing commentary around mortgage markets—including discussions of potential government agency MBS purchases (MarketWatch)—adds a layer to duration sentiment, though today’s moves are muted.
Commodities
Gold and silver are the session’s standout movers among the assets tracked. GLD at 423.43 is up about 2.16% from 414.47, while SLV at 77.33 is up about 6.84% from 72.38. This aligns with MarketWatch’s observation that precious metals respond to heightened sensitivity around the Fed–White House clash, and with Bloomberg reporting that large asset managers remain constructive on gold even after 2025’s record rally.
Energy is also firmer. USO at 71.23 is up roughly 0.64% from 70.78, echoed by DBC at 23.12 (+0.94%), while UNG at 11.18 surges about 7.5%. The news docket remains active: MarketWatch notes crude’s recent weekly rise was not solely about Venezuela, pointing to developments in Iran; another MarketWatch piece describes a potential exclusion of Exxon Mobil from Venezuelan deals after a reported lack of enthusiasm at a White House meeting. These headlines contribute to geopolitical risk premia that can sustain a bid under oil, even as the fundamental demand picture evolves. Broader commodity perspectives also include the possibility of a new “supercycle” (MarketWatch), although today’s moves simply show a firm tone rather than a regime shift.
FX and crypto
FX data provided are limited, with EURUSD marked near 1.16697 at the time of this note (change context not provided). In digital assets, Bitcoin (BTCUSD) is near 91,864, slightly below today’s provided open of 92,050, and within a day range of roughly 89,981 to 92,296. Ether (ETHUSD) is marked around 3,116, modestly below its open of 3,155 and within a range of about 3,061 to 3,164. The tone is consolidative rather than directional, in contrast to the decisive bid under precious metals.
Notable movers and themes from headlines
- Apple (reported Gemini integration with Google) — MarketWatch frames this as a potential AI catalyst; another piece argues bearishness may be overdone. Without live pricing for AAPL today in the provided data, the takeaway is thematic: investors continue to seek concrete AI product roadmaps from mega-cap platforms.
- Paramount, Warner Bros. Discovery, Netflix — Litigation and board-level contestation around the WBD takeover effort (MarketWatch; CNBC) add governance risk to the media complex. Outcomes are uncertain, but M&A signaling is front and center.
- AI infrastructure breadth — MarketWatch calls out Amazon and Oracle as underappreciated AI infrastructure plays; another article highlights Lumentum alongside Nvidia and Broadcom as top chip picks. CNBC and Bloomberg coverage broadens the lens to autonomy and industrial AI exposure.
- Retail and consumer — Walmart’s AI push and index inclusion (MarketWatch) contrasts with pressure at Abercrombie & Fitch after an outlook tweak (MarketWatch), underscoring the market’s current dispersion within consumer equities.
- Energy geopolitics — Multiple MarketWatch pieces outline policy and geopolitical drivers around oil, including potential Venezuelan developments and Iran-related factors; these help contextualize today’s firmer USO and DBC.
Outlook
Near-term market direction likely hinges on three intersecting factors. First, big-bank earnings will test sentiment in a sector that materially underperforms today (XLF -1.10%). Watch net interest income, credit quality, trading/IB activity, and expense discipline—MarketWatch emphasizes these as key lenses. Second, the political trajectory around the Fed and monetary-policy independence remains a live risk factor; precious metals’ surge today highlights the market’s sensitivity to this narrative. Third, the durability of the AI investment cycle will continue to shape leadership within technology and adjacent industrials and infrastructure, with investors rewarding firms that translate capex into monetizable products and services.
With the 10-year around 4.19% and long-run inflation expectations near 2.2%–2.4%, the macro signal remains one of normalized inflation and a term-structure driven by supply and policy risk rather than a renewed inflation scare. That should, in principle, support equities so long as earnings deliver—and it likely keeps a bid under balance-sheet assets (gold) as a hedge to episodic policy shocks.
Risks
Key risks include:
- Policy and governance uncertainty around the Federal Reserve that could impact rate expectations or raise volatility across rates-sensitive sectors;
- Regulatory, legal, and governance developments in media M&A (Paramount/WBD/Netflix) that could unsettle the affected cohort;
- Tariff and trade policy frictions that may weigh on supply chains and corporate hiring (CNBC survey coverage referenced);
- Geopolitical risks in energy markets (Venezuela, Iran) that could amplify commodity volatility;
- A potential cooling in the AI investment cycle or delayed monetization, which could pressure elevated tech valuations.
What to watch next
- Bank earnings: guidance on credit costs, capital returns, and NII trajectory; read-throughs for XLF.
- Policy headlines around the Fed and any updates on the DOJ probe’s process; potential knock-on effects in rates and precious metals.
- AI catalysts and corporate disclosures, including any incremental detail on Apple’s AI strategy and ongoing cloud/semiconductor demand signals.
- Energy flow: developments tied to Venezuela and the Middle East and their influence on USO/DBC.
- Small-cap follow-through: IWM’s leadership today is constructive; breadth confirmation would bolster the case for a broader advance.
Overview
U.S. equities are holding modest gains at midday Monday, with leadership tilting back toward large-cap technology and small-caps while financials and defensives lag. As of 1:30 p.m. ET, SPY trades at 695.12, up about 0.15% versus Friday’s close of 694.07, and QQQ is at 628.14, up roughly 0.24% from 626.65. The Dow proxy DIA is little changed at 495.19 (+0.03%), and small-cap IWM outperforms at 261.19 (+0.37%).
The macro backdrop features slightly softer long-duration Treasurys and a notable bid for hard assets. Gold (GLD 423.43) is up about 2.16% on the day and silver (SLV 77.33) is stronger still, up about 6.84%. Broad commodities (DBC 23.12) and crude oil (USO 71.23) are firmer, and natural gas (UNG 11.18) rallies about 7.5%. Financials (XLF 55.12) are under pressure ahead of big-bank earnings and amid rising policy noise around the Federal Reserve. Technology (XLK 147.14) advances.
Macro: yields, inflation, expectations
Treasury yields imply a still-steep curve versus the front end. The latest available readings show the 2-year at 3.49%, the 5-year at 3.74%, the 10-year at 4.19% and the 30-year at 4.85%. That configuration—front end below the long end—aligns with the modest pressure seen in long-duration bond ETFs at midday. Inflation context remains constructive: the latest CPI index stands at 325.031 with core CPI at 331.068 (index levels; change rates not provided here). Market-based inflation expectations sit near long-run anchors: about 2.28% for 5-year and 2.24% for 10-year break-evens, while a model-based 1-year measure is 3.20%. The 5y5y forward is near 2.21% and model-based 10- and 30-year gauges cluster around 2.34% to 2.44%, suggesting long-term inflation expectations remain well contained even as near-term measures are modestly higher.
A separate layer of macro uncertainty comes from the escalating political battle over the Fed. Reporting notes that past Fed chairs and Treasury officials publicly backed Chair Jerome Powell (CNBC), while Powell himself warned that a Justice Department investigation threatens the central bank’s independence (MarketWatch). Markets appear to be expressing some of that uncertainty via haven buying in precious metals, consistent with commentary that “precious metal prices surge” as the conflict intensifies (MarketWatch). Meanwhile, bank earnings loom, with a MarketWatch preview highlighting critical metrics investors will scrutinize as the largest U.S. banks kick off reporting.
Equities and sectors
Breadth is mixed but tilts constructive given small-cap leadership. By fund:
- SPY 695.12 vs. 694.07 prior close: +0.15%.
- QQQ 628.14 vs. 626.65: +0.24%.
- DIA 495.19 vs. 495.02: +0.03%.
- IWM 261.19 vs. 260.23: +0.37%.
Sector performance is uneven:
- Technology (XLK 147.14 vs. 146.15) is up about 0.68%, pacing the tape as investors continue to reward AI-adjacent and infrastructure plays.
- Financials (XLF 55.12 vs. 55.73) fall about 1.10% into earnings, reflecting both pre-results positioning and policy risk sensitivity.
- Utilities (XLU, last 42.45 vs. 42.51) are fractionally lower (-0.15%).
- Health Care (XLV 156.38 vs. 157.31) is down about 0.59%.
News flow reinforces the current leadership themes. On the tech front, multiple pieces keep AI at the forefront. MarketWatch reports Apple has reportedly sealed a long-rumored partnership with Google’s Gemini, which some see as a catalyst to firm up Apple’s AI narrative. Additional MarketWatch coverage argues Apple’s recent stock pressure may be overdone and that overlooked iPhone strength and a clearer AI strategy could support a rebound. Elsewhere, MarketWatch flags Amazon and Meta as potential “Magnificent Seven” standouts in 2026 as the market seeks tangible returns on AI investments; another piece positions Oracle and Amazon as underappreciated AI infrastructure beneficiaries. A Bloomberg article compares Nvidia and Tesla’s divergent autonomy strategies, highlighting the breadth of AI’s industrial reach.
AI’s spillover into industrials and infrastructure remains a theme. CNBC’s Investing Club notes a favorable call on an industrial tied to the AI buildout, while MarketWatch points to top chip picks spanning established leaders and optical components. This aligns with the midday sector tape—tech leadership with small-cap strength—while defensives remain subdued.
At the same time, media and telecom M&A headlines inject idiosyncratic risk into specific names. Paramount is suing Warner Bros. Discovery and advancing a competing slate of directors to push its takeover bid (MarketWatch; CNBC). Netflix features in the dispute as the yardstick bid that WBD’s board deemed superior, according to the reporting (MarketWatch). While we do not have real-time prices for those single-name stocks in today’s data, the governance and transaction uncertainty can create episodic volatility for the media cohort.
Consumer and retail narratives are mixed. MarketWatch highlights Walmart’s stock surging after AI initiatives and Nasdaq-100 inclusion, while another piece explains Abercrombie & Fitch’s drop following a modest tweak to its sales growth outlook. These crosscurrents mirror the broader market’s preference for companies delivering clear technology leverage or durable unit economics, and skepticism toward narratives lacking near-term proof points.
Bonds
Treasury ETFs are marginally lower at midday, consistent with the 10-year yield near 4.19%:
- TLT 87.87 vs. 87.93: -0.07%.
- IEF 96.28 vs. 96.30: -0.02%.
- SHY 82.84 vs. 82.83: +0.01%.
The slight dip in long-duration prices alongside a steady-to-anchored inflation-expectations profile suggests investors are more focused on term premium, supply, and policy frictions than on an inflation surprise. A lighter regulatory tone towards banks anticipated in earnings previews (MarketWatch) has not yet translated into outperformance for financials today, likely due to the juxtaposition of policy headlines and earnings uncertainty. Separately, ongoing commentary around mortgage markets—including discussions of potential government agency MBS purchases (MarketWatch)—adds a layer to duration sentiment, though today’s moves are muted.
Commodities
Gold and silver are the session’s standout movers among the assets tracked. GLD at 423.43 is up about 2.16% from 414.47, while SLV at 77.33 is up about 6.84% from 72.38. This aligns with MarketWatch’s observation that precious metals respond to heightened sensitivity around the Fed–White House clash, and with Bloomberg reporting that large asset managers remain constructive on gold even after 2025’s record rally.
Energy is also firmer. USO at 71.23 is up roughly 0.64% from 70.78, echoed by DBC at 23.12 (+0.94%), while UNG at 11.18 surges about 7.5%. The news docket remains active: MarketWatch notes crude’s recent weekly rise was not solely about Venezuela, pointing to developments in Iran; another MarketWatch piece describes a potential exclusion of Exxon Mobil from Venezuelan deals after a reported lack of enthusiasm at a White House meeting. These headlines contribute to geopolitical risk premia that can sustain a bid under oil, even as the fundamental demand picture evolves. Broader commodity perspectives also include the possibility of a new “supercycle” (MarketWatch), although today’s moves simply show a firm tone rather than a regime shift.
FX and crypto
FX data provided are limited, with EURUSD marked near 1.16697 at the time of this note (change context not provided). In digital assets, Bitcoin (BTCUSD) is near 91,864, slightly below today’s provided open of 92,050, and within a day range of roughly 89,981 to 92,296. Ether (ETHUSD) is marked around 3,116, modestly below its open of 3,155 and within a range of about 3,061 to 3,164. The tone is consolidative rather than directional, in contrast to the decisive bid under precious metals.
Notable movers and themes from headlines
- Apple (reported Gemini integration with Google) — MarketWatch frames this as a potential AI catalyst; another piece argues bearishness may be overdone. Without live pricing for AAPL today in the provided data, the takeaway is thematic: investors continue to seek concrete AI product roadmaps from mega-cap platforms.
- Paramount, Warner Bros. Discovery, Netflix — Litigation and board-level contestation around the WBD takeover effort (MarketWatch; CNBC) add governance risk to the media complex. Outcomes are uncertain, but M&A signaling is front and center.
- AI infrastructure breadth — MarketWatch calls out Amazon and Oracle as underappreciated AI infrastructure plays; another article highlights Lumentum alongside Nvidia and Broadcom as top chip picks. CNBC and Bloomberg coverage broadens the lens to autonomy and industrial AI exposure.
- Retail and consumer — Walmart’s AI push and index inclusion (MarketWatch) contrasts with pressure at Abercrombie & Fitch after an outlook tweak (MarketWatch), underscoring the market’s current dispersion within consumer equities.
- Energy geopolitics — Multiple MarketWatch pieces outline policy and geopolitical drivers around oil, including potential Venezuelan developments and Iran-related factors; these help contextualize today’s firmer USO and DBC.
Outlook
Near-term market direction likely hinges on three intersecting factors. First, big-bank earnings will test sentiment in a sector that materially underperforms today (XLF -1.10%). Watch net interest income, credit quality, trading/IB activity, and expense discipline—MarketWatch emphasizes these as key lenses. Second, the political trajectory around the Fed and monetary-policy independence remains a live risk factor; precious metals’ surge today highlights the market’s sensitivity to this narrative. Third, the durability of the AI investment cycle will continue to shape leadership within technology and adjacent industrials and infrastructure, with investors rewarding firms that translate capex into monetizable products and services.
With the 10-year around 4.19% and long-run inflation expectations near 2.2%–2.4%, the macro signal remains one of normalized inflation and a term-structure driven by supply and policy risk rather than a renewed inflation scare. That should, in principle, support equities so long as earnings deliver—and it likely keeps a bid under balance-sheet assets (gold) as a hedge to episodic policy shocks.
Risks
Key risks include:
- Policy and governance uncertainty around the Federal Reserve that could impact rate expectations or raise volatility across rates-sensitive sectors;
- Regulatory, legal, and governance developments in media M&A (Paramount/WBD/Netflix) that could unsettle the affected cohort;
- Tariff and trade policy frictions that may weigh on supply chains and corporate hiring (CNBC survey coverage referenced);
- Geopolitical risks in energy markets (Venezuela, Iran) that could amplify commodity volatility;
- A potential cooling in the AI investment cycle or delayed monetization, which could pressure elevated tech valuations.
What to watch next
- Bank earnings: guidance on credit costs, capital returns, and NII trajectory; read-throughs for XLF.
- Policy headlines around the Fed and any updates on the DOJ probe’s process; potential knock-on effects in rates and precious metals.
- AI catalysts and corporate disclosures, including any incremental detail on Apple’s AI strategy and ongoing cloud/semiconductor demand signals.
- Energy flow: developments tied to Venezuela and the Middle East and their influence on USO/DBC.
- Small-cap follow-through: IWM’s leadership today is constructive; breadth confirmation would bolster the case for a broader advance.