State of Market: Midday 12/03/25
Midday market: Small caps and banks lead while energy lags; bonds firmer, crypto mixed
IWM outperforms as XLF extends strength; gold and silver ease, oil and gas bounce; yields steady with the 10-year near 4.10% as services hold up and manufacturing stays soft amid tariff uncertainty.
TendieTensor.com State of Market Midday
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At the New York midday mark, risk appetite is constructive with broad U.S. equities mostly higher, led by small caps and cyclicals, while defensive commodities like gold and silver ease and energy shares lag. Bond prices are firmer across the curve, consistent with a steadier rates backdrop and ongoing debate over growth and inflation momentum into year-end. Headlines today center on labor softness, resilient services activity, tariff uncertainty, and company-specific developments in industrials, technology, and travel.
Major index ETFs are green across the board. The S&P 500 proxy, SPY, trades at 684.02, up from a previous close of 681.53. The tech-heavy QQQ sits at 622.92, a modest lift from 622.00. Blue chips are firmer as DIA advances to 479.07 from 475.26, and small caps meaningfully outperform with IWM at 248.89 versus 245.17 previously. The pattern favors domestic cyclicality, consistent with improved breadth and a tilt toward financials and industrial beneficiaries.
On the macro front, the Treasury curve is steady to slightly lower in yield compared with the prior day’s closes, with the 2-year at 3.54%, the 5-year at 3.67%, the 10-year at 4.09%, and the 30-year at 4.74%. These levels are consistent with a market that is balancing softer labor signals against still-expanding services activity. CPI level data as of September showed headline at 324.368 and core at 330.542 (index levels; latest year-over-year rates not provided), while market-based inflation expectations remain anchored: roughly 2.35% over five years and 2.27% over ten years, with the five-years-forward inflation rate around 2.18% (expectations data as of November). The combination points to disinflation credibility that allows rates to stabilize, even as growth data flash a mixed signal.
Fresh labor signals were soft. According to MarketWatch, ADP reported that private payrolls fell in November for the third time in four months, highlighting a weakening jobs trend that the Federal Reserve will weigh in its next rate-cut deliberations. That weakness contrasts with the services side of the economy. Separate coverage noted the ISM services index showed expansion in November for a sixth consecutive month, though respondents cited hiring restraint and investment caution amid tariff uncertainty. Manufacturing remained the weak link, with ISM manufacturing pointing to a ninth consecutive month of contraction and explicit references to tariffs pressuring sales and keeping a lid on hiring. The tariff backdrop remains in focus ahead of a looming Supreme Court ruling on Trump-era tariffs; administration officials signaled confidence in maintaining levies by other avenues if needed, according to MarketWatch.
The rates and policy narrative is not limited to Washington. Global central-bank dynamics also matter at the margin: MarketWatch highlighted that comments from the Bank of Japan’s Ueda raised the prospect of a rate hike this month, a potential shift that could pull some capital away from U.S. bonds and equities if sustained. In U.S. short-term funding markets, MarketWatch also noted signs of tightening conditions that may require Fed attention, a reminder that liquidity plumbing can influence risk sentiment even absent changes to policy rates.
Equities and sectors: leadership and laggards
Within U.S. sectors, financials are setting the tone. XLF trades at 53.49, up from 52.84, continuing a relative strength run that coincides with firming economic breadth and constructive capital-markets tone. CNBC reported that financials were among the top-performing groups today, with investors opportunistically taking profits in select bank shares near record levels even as they remain constructive on the group’s fundamental outlook. The big takeaway: better net interest margin visibility alongside credit normalization and capital return remain underlying supports for the sector.
Technology is comparatively subdued but positive at the margin. XLK sits at 289.44, a hair above 289.30 previously. Investors are processing multiple AI-related headlines. Marvell unveiled an acquisition of Celestial AI for up to $5.5 billion and delivered an upbeat forecast that lifted the stock, though analysts flagged questions on competitive positioning and integration. Amazon announced new AI chips and deeper Nvidia ties this week, emphasizing that cloud capacity remains the critical gating factor for AI adoption. Meanwhile, commentary across several outlets emphasized the rising capital intensity of Big Tech as AI scales—Bloomberg noted that Microsoft’s capex has tripled as a share of revenue over a decade. That capital cycle may temper multiple expansion for some names but also underwrites secular growth, which helps explain XLK’s steadiness midday.
Energy is the primary laggard among the sectors shown. The energy ETF, XLE, is at 87.30 versus 87.88 previously. The decline tracks with a year-to-date narrative of oversupply anxiety. MarketWatch reported that OPEC+ unwound cuts faster than expected, adding to a supply glut even as prices sagged this year. Despite that structural headwind, crude is bouncing today: the oil proxy USO is at 70.87, up from 70.20. Natural gas is firmer as well, with UNG at 15.45 versus 14.96.
Health care is participating on the upside. XLV prints 155.34, up from 154.36. The group remains a barbell of growth franchises and defensives; CNBC highlighted a recent price move in obesity drugs with investor implications, though today’s sector lift looks broad-based rather than idiosyncratic.
Bonds: firmer prices as yields stabilize
Treasury ETFs reflect a mild bid across durations. TLT trades at 88.98 versus 88.81, IEF at 96.93 versus 96.77, and SHY at 82.84 versus 82.81. These moves align with the 10-year holding near 4.09% and with inflation expectations hovering close to the Fed’s target range over medium-term horizons. The juxtaposition of softening private payrolls and still-expanding services supports duration, while manufacturing’s persistent contraction adds another cyclical headwind that typically caps yields. That said, tariff and funding-market uncertainties could inject episodic rate volatility.
Commodities: precious metals ease; energy and broad basket firmer
Gold and silver are modestly lower at midday after a strong run. GLD trades at 386.60, down from 387.24, and SLV at 52.82 versus 53.13. MarketWatch noted that gold, silver, and copper have been reaching record highs together for the first time in 45 years—a historically rare alignment driven by a cocktail of macro and structural factors. Today’s pullback looks tactical rather than thematic, occurring alongside a modest risk-on bias in equities and a firmer tone in energy.
Oil and gas are rebounding. USO’s 70.87 compares to 70.20 previously, and UNG is higher at 15.45 versus 14.96. The broad commodity basket, DBC, is up to 23.14 from 23.02, reflecting the same energy-led bid. The tension between OPEC+ supply dynamics and demand resilience remains central. With services activity expanding and travel demand described as healthy by Delta—despite a shutdown-related hit—near-term consumption looks supported even as inventories and supply policy complicate the price path.
FX and crypto: euro steady, crypto mixed
In foreign exchange, EURUSD is quoted around 1.16696; directional context is not provided versus prior levels. The euro’s path will remain sensitive to relative growth and expected policy-rate differentials, including any shifts from the BOJ that reverberate via global rates and risk positioning.
Crypto is mixed. Bitcoin’s mark is 93,144.59, slightly below an open price of 93,385.74; intraday ranges span a high of 94,013.75 and a low of 91,710.96. Ethereum is firmer, marked at 3,134.93 versus an open of 3,057.91, with an intraday high of 3,146.66 and a low of 3,030.80. Flows and access remain in focus: MarketWatch reported Vanguard has begun allowing clients to buy third-party crypto ETFs for the first time, a step that could incrementally broaden the buyer base. Separate commentary suggested that bitcoin’s geopolitical optionality remains a differentiator, even amid bouts of volatility.
Company and thematic highlights from today’s news flow
- Industrials: Boeing is leading the market higher on improving cash flow visibility and expectations for increased 737 and 787 deliveries next year, per CNBC and MarketWatch. This is consistent with today’s cyclical leadership in the Dow and small caps.
- Technology and AI: Marvell’s acquisition of Celestial AI and upbeat guidance have buoyed sentiment, though analysts continue to probe competitive dynamics and deal execution. Amazon’s AWS highlighted new AI chips and closer Nvidia integration, reinforcing the view that cloud capacity is a key bottleneck—and opportunity—in AI adoption. Broader commentary underscored rising capex intensity across Big Tech as AI scales.
- Financials: Sector strength corresponds with CNBC’s note that financials are among the day’s top performers. Profit-taking in select bank shares near highs does not negate the constructive setup that investors cite.
- Airlines and travel: Delta reduced its Q4 profit forecast due to government shutdown-driven cancellations but emphasized that demand remains healthy into 2026, per CNBC and MarketWatch. The market read was broadly relieved that the cost impact was manageable.
- Retail and consumers: Dollar Tree beat sales expectations as value-seeking consumers trade down, according to MarketWatch. Macy’s surprised with sales growth and a profit but saw shares pull back after a big run in recent weeks. The overall holiday shopping kickoff looked solid, challenging a “weak consumer” narrative, per CNBC.
- Macro policy and markets: ADP’s soft November employment data and ISM readings (services expansion, manufacturing contraction) capture a two-speed economy complicated by tariff uncertainty. MarketWatch also highlighted potential stress brewing in short-term funding markets that might necessitate Fed action.
Outlook
Into the afternoon and the days ahead, the market’s path will likely hinge on the interplay between labor softening and services resilience, tariff developments, and funding-market conditions. For equities, breadth improvement—evident in IWM’s outperformance—will be key to sustaining gains beyond mega-cap tech, particularly as AI-related capex rises and investors scrutinize return-on-investment timelines. Financials’ leadership can continue if the curve stabilizes and credit metrics remain contained. Technology should remain headline-driven as cloud capacity, chip pipelines, and M&A shape positioning.
Rates are positioned to be data- and liquidity-sensitive. The 10-year near 4.10% provides some room for bonds to absorb growth disappointments, but any tariff-related inflation impulse or funding-market stress could reprice term premia. Precious metals may consolidate after a strong run, while energy’s near-term direction will pivot on OPEC+ signals versus evidence of demand follow-through. In crypto, broader access via traditional platforms could provide incremental support, even as volatility remains elevated and macro beta persists.
Risks
Key near-term risks include: (1) a weaker labor market than expected that undercuts earnings and risk appetite; (2) tariff outcomes that lift input costs and pressure margins; (3) emergent stress in short-term funding markets that tightens financial conditions; (4) a policy surprise from the BOJ that ripples through global rates; (5) energy market imbalances that whipsaw inflation expectations; and (6) continued concentration risk in mega-cap tech as AI capex ramps, potentially narrowing leadership if returns lag expectations.
Bottom line
Midday action shows constructive breadth with small caps and financials leading, energy lagging, bonds firmer, and crypto mixed. Macro signals remain two-speed—soft labor indicators alongside resilient services—against a backdrop of contained medium-term inflation expectations and stable long rates. Company news is skewing positive for industrial and AI-linked stories, while retailers reflect a nuanced consumer that trades down in some categories but still spends where value is clear. The next leg likely depends on how policy and liquidity narratives evolve, and whether cyclical breadth can continue to improve into year-end.
At the New York midday mark, risk appetite is constructive with broad U.S. equities mostly higher, led by small caps and cyclicals, while defensive commodities like gold and silver ease and energy shares lag. Bond prices are firmer across the curve, consistent with a steadier rates backdrop and ongoing debate over growth and inflation momentum into year-end. Headlines today center on labor softness, resilient services activity, tariff uncertainty, and company-specific developments in industrials, technology, and travel.
Major index ETFs are green across the board. The S&P 500 proxy, SPY, trades at 684.02, up from a previous close of 681.53. The tech-heavy QQQ sits at 622.92, a modest lift from 622.00. Blue chips are firmer as DIA advances to 479.07 from 475.26, and small caps meaningfully outperform with IWM at 248.89 versus 245.17 previously. The pattern favors domestic cyclicality, consistent with improved breadth and a tilt toward financials and industrial beneficiaries.
On the macro front, the Treasury curve is steady to slightly lower in yield compared with the prior day’s closes, with the 2-year at 3.54%, the 5-year at 3.67%, the 10-year at 4.09%, and the 30-year at 4.74%. These levels are consistent with a market that is balancing softer labor signals against still-expanding services activity. CPI level data as of September showed headline at 324.368 and core at 330.542 (index levels; latest year-over-year rates not provided), while market-based inflation expectations remain anchored: roughly 2.35% over five years and 2.27% over ten years, with the five-years-forward inflation rate around 2.18% (expectations data as of November). The combination points to disinflation credibility that allows rates to stabilize, even as growth data flash a mixed signal.
Fresh labor signals were soft. According to MarketWatch, ADP reported that private payrolls fell in November for the third time in four months, highlighting a weakening jobs trend that the Federal Reserve will weigh in its next rate-cut deliberations. That weakness contrasts with the services side of the economy. Separate coverage noted the ISM services index showed expansion in November for a sixth consecutive month, though respondents cited hiring restraint and investment caution amid tariff uncertainty. Manufacturing remained the weak link, with ISM manufacturing pointing to a ninth consecutive month of contraction and explicit references to tariffs pressuring sales and keeping a lid on hiring. The tariff backdrop remains in focus ahead of a looming Supreme Court ruling on Trump-era tariffs; administration officials signaled confidence in maintaining levies by other avenues if needed, according to MarketWatch.
The rates and policy narrative is not limited to Washington. Global central-bank dynamics also matter at the margin: MarketWatch highlighted that comments from the Bank of Japan’s Ueda raised the prospect of a rate hike this month, a potential shift that could pull some capital away from U.S. bonds and equities if sustained. In U.S. short-term funding markets, MarketWatch also noted signs of tightening conditions that may require Fed attention, a reminder that liquidity plumbing can influence risk sentiment even absent changes to policy rates.
Equities and sectors: leadership and laggards
Within U.S. sectors, financials are setting the tone. XLF trades at 53.49, up from 52.84, continuing a relative strength run that coincides with firming economic breadth and constructive capital-markets tone. CNBC reported that financials were among the top-performing groups today, with investors opportunistically taking profits in select bank shares near record levels even as they remain constructive on the group’s fundamental outlook. The big takeaway: better net interest margin visibility alongside credit normalization and capital return remain underlying supports for the sector.
Technology is comparatively subdued but positive at the margin. XLK sits at 289.44, a hair above 289.30 previously. Investors are processing multiple AI-related headlines. Marvell unveiled an acquisition of Celestial AI for up to $5.5 billion and delivered an upbeat forecast that lifted the stock, though analysts flagged questions on competitive positioning and integration. Amazon announced new AI chips and deeper Nvidia ties this week, emphasizing that cloud capacity remains the critical gating factor for AI adoption. Meanwhile, commentary across several outlets emphasized the rising capital intensity of Big Tech as AI scales—Bloomberg noted that Microsoft’s capex has tripled as a share of revenue over a decade. That capital cycle may temper multiple expansion for some names but also underwrites secular growth, which helps explain XLK’s steadiness midday.
Energy is the primary laggard among the sectors shown. The energy ETF, XLE, is at 87.30 versus 87.88 previously. The decline tracks with a year-to-date narrative of oversupply anxiety. MarketWatch reported that OPEC+ unwound cuts faster than expected, adding to a supply glut even as prices sagged this year. Despite that structural headwind, crude is bouncing today: the oil proxy USO is at 70.87, up from 70.20. Natural gas is firmer as well, with UNG at 15.45 versus 14.96.
Health care is participating on the upside. XLV prints 155.34, up from 154.36. The group remains a barbell of growth franchises and defensives; CNBC highlighted a recent price move in obesity drugs with investor implications, though today’s sector lift looks broad-based rather than idiosyncratic.
Bonds: firmer prices as yields stabilize
Treasury ETFs reflect a mild bid across durations. TLT trades at 88.98 versus 88.81, IEF at 96.93 versus 96.77, and SHY at 82.84 versus 82.81. These moves align with the 10-year holding near 4.09% and with inflation expectations hovering close to the Fed’s target range over medium-term horizons. The juxtaposition of softening private payrolls and still-expanding services supports duration, while manufacturing’s persistent contraction adds another cyclical headwind that typically caps yields. That said, tariff and funding-market uncertainties could inject episodic rate volatility.
Commodities: precious metals ease; energy and broad basket firmer
Gold and silver are modestly lower at midday after a strong run. GLD trades at 386.60, down from 387.24, and SLV at 52.82 versus 53.13. MarketWatch noted that gold, silver, and copper have been reaching record highs together for the first time in 45 years—a historically rare alignment driven by a cocktail of macro and structural factors. Today’s pullback looks tactical rather than thematic, occurring alongside a modest risk-on bias in equities and a firmer tone in energy.
Oil and gas are rebounding. USO’s 70.87 compares to 70.20 previously, and UNG is higher at 15.45 versus 14.96. The broad commodity basket, DBC, is up to 23.14 from 23.02, reflecting the same energy-led bid. The tension between OPEC+ supply dynamics and demand resilience remains central. With services activity expanding and travel demand described as healthy by Delta—despite a shutdown-related hit—near-term consumption looks supported even as inventories and supply policy complicate the price path.
FX and crypto: euro steady, crypto mixed
In foreign exchange, EURUSD is quoted around 1.16696; directional context is not provided versus prior levels. The euro’s path will remain sensitive to relative growth and expected policy-rate differentials, including any shifts from the BOJ that reverberate via global rates and risk positioning.
Crypto is mixed. Bitcoin’s mark is 93,144.59, slightly below an open price of 93,385.74; intraday ranges span a high of 94,013.75 and a low of 91,710.96. Ethereum is firmer, marked at 3,134.93 versus an open of 3,057.91, with an intraday high of 3,146.66 and a low of 3,030.80. Flows and access remain in focus: MarketWatch reported Vanguard has begun allowing clients to buy third-party crypto ETFs for the first time, a step that could incrementally broaden the buyer base. Separate commentary suggested that bitcoin’s geopolitical optionality remains a differentiator, even amid bouts of volatility.
Company and thematic highlights from today’s news flow
- Industrials: Boeing is leading the market higher on improving cash flow visibility and expectations for increased 737 and 787 deliveries next year, per CNBC and MarketWatch. This is consistent with today’s cyclical leadership in the Dow and small caps.
- Technology and AI: Marvell’s acquisition of Celestial AI and upbeat guidance have buoyed sentiment, though analysts continue to probe competitive dynamics and deal execution. Amazon’s AWS highlighted new AI chips and closer Nvidia integration, reinforcing the view that cloud capacity is a key bottleneck—and opportunity—in AI adoption. Broader commentary underscored rising capex intensity across Big Tech as AI scales.
- Financials: Sector strength corresponds with CNBC’s note that financials are among the day’s top performers. Profit-taking in select bank shares near highs does not negate the constructive setup that investors cite.
- Airlines and travel: Delta reduced its Q4 profit forecast due to government shutdown-driven cancellations but emphasized that demand remains healthy into 2026, per CNBC and MarketWatch. The market read was broadly relieved that the cost impact was manageable.
- Retail and consumers: Dollar Tree beat sales expectations as value-seeking consumers trade down, according to MarketWatch. Macy’s surprised with sales growth and a profit but saw shares pull back after a big run in recent weeks. The overall holiday shopping kickoff looked solid, challenging a “weak consumer” narrative, per CNBC.
- Macro policy and markets: ADP’s soft November employment data and ISM readings (services expansion, manufacturing contraction) capture a two-speed economy complicated by tariff uncertainty. MarketWatch also highlighted potential stress brewing in short-term funding markets that might necessitate Fed action.
Outlook
Into the afternoon and the days ahead, the market’s path will likely hinge on the interplay between labor softening and services resilience, tariff developments, and funding-market conditions. For equities, breadth improvement—evident in IWM’s outperformance—will be key to sustaining gains beyond mega-cap tech, particularly as AI-related capex rises and investors scrutinize return-on-investment timelines. Financials’ leadership can continue if the curve stabilizes and credit metrics remain contained. Technology should remain headline-driven as cloud capacity, chip pipelines, and M&A shape positioning.
Rates are positioned to be data- and liquidity-sensitive. The 10-year near 4.10% provides some room for bonds to absorb growth disappointments, but any tariff-related inflation impulse or funding-market stress could reprice term premia. Precious metals may consolidate after a strong run, while energy’s near-term direction will pivot on OPEC+ signals versus evidence of demand follow-through. In crypto, broader access via traditional platforms could provide incremental support, even as volatility remains elevated and macro beta persists.
Risks
Key near-term risks include: (1) a weaker labor market than expected that undercuts earnings and risk appetite; (2) tariff outcomes that lift input costs and pressure margins; (3) emergent stress in short-term funding markets that tightens financial conditions; (4) a policy surprise from the BOJ that ripples through global rates; (5) energy market imbalances that whipsaw inflation expectations; and (6) continued concentration risk in mega-cap tech as AI capex ramps, potentially narrowing leadership if returns lag expectations.
Bottom line
Midday action shows constructive breadth with small caps and financials leading, energy lagging, bonds firmer, and crypto mixed. Macro signals remain two-speed—soft labor indicators alongside resilient services—against a backdrop of contained medium-term inflation expectations and stable long rates. Company news is skewing positive for industrial and AI-linked stories, while retailers reflect a nuanced consumer that trades down in some categories but still spends where value is clear. The next leg likely depends on how policy and liquidity narratives evolve, and whether cyclical breadth can continue to improve into year-end.