State of Market: Midday 01/13/26
Midday market: Small-caps firm as mega-cap benchmarks ease; bonds bid, commodities advance
Financials lag on policy headlines, tech is softer, while silver and oil extend gains; focus stays on Fed independence drama, bank earnings, and upcoming inflation data
TendieTensor.com State of Market Midday
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Equities are mixed at midday on Tuesday, with small-caps bucking a modest pullback in the mega-cap benchmarks while bonds catch a bid and commodity-linked exposures extend their recent strength. The policy and macro context remains front-and-center: developments around Federal Reserve Chair Jerome Powell and the Justice Department probe continue to draw bipartisan and global responses, while debates over credit-card regulation and tariffs add to sector-level dispersion. Early bank earnings and upcoming inflation data keep investors cautious about near-term positioning.
At 1:30 p.m. ET, SPY is trading near 692.91, down roughly 0.3% from Monday’s 695.16 close. QQQ sits around 625.43, off about 0.3% from 627.17. The Dow proxy DIA is softer at 492.35, down close to 0.7% versus 495.90, while small-cap IWM is edging higher—last at 262.02, up about 0.2% from 261.50. The style divergence—small-caps modestly green against softer large-caps—comes as energy and industrial themes remain active in headlines and as investors weigh policy risk and earnings guidance into the back half of January.
Macro backdrop: yields, inflation, expectations
Treasury yields remain elevated across the curve versus mid-2025 levels, though the latest available prints (Jan. 9) show the 10-year at 4.18%, five-year at 3.75%, two-year at 3.54%, and 30-year at 4.82%. The shape implies a still-shallow inversion in the front end with relatively higher term premia, consistent with an economy that has absorbed higher rates without a sharp demand shock. On inflation, the most recent CPI data available (November) show headline CPI at 325.03 (index level) and core CPI at 331.07. Market- and model-based inflation expectations as of December point to 1-year inflation near 3.20% (model), five-year around 2.42% and 10-year near 2.34% (model), with market-implied five- and ten-year breakevens around 2.28% and 2.24%, respectively. Overall, medium-term expectations appear anchored near or a little above 2%.
The policy overlay remains critical. A series of pieces today and yesterday highlight that global central bankers and former Fed officials have publicly defended Powell amid the DOJ probe, emphasizing the importance of Fed independence. Political dynamics could also affect Fed appointments; one senator has vowed to block nominees until the probe is resolved. Separately, discussion of credit-card reforms—from a proposed 10% cap on APRs to network routing changes—has implications for consumer finance, interchange economics, and card issuer profitability.
Equities and sectors
Benchmarks:
- SPY (S&P 500) at 692.91 vs. 695.16 prior close (down ~0.3%).
- QQQ (Nasdaq-100) at 625.43 vs. 627.17 (down ~0.3%).
- DIA (Dow) at 492.35 vs. 495.90 (down ~0.7%).
- IWM (Russell 2000) at 262.02 vs. 261.50 (up ~0.2%).
The dispersion aligns with a few crosscurrents in today’s news flow:
- Financials are under pressure: XLF trades near 54.36 vs. 55.29 yesterday (down about 1.7%). Headlines cite investor jitters over potential requirements for a lower-cost alternative for credit-card routing and new proposals to cap APRs, while JPMorgan’s results marked a constructive start to big-bank earnings, with CEO commentary noting a resilient U.S. economy. The competitive/regulatory overhang seems to be the dominant intraday driver for the group.
- Technology is modestly softer: XLK is around 146.39 vs. 146.79 (down about 0.3%). The tape is digesting a flurry of analyst calls across semis and software—positive notes on AMD and Intel, and thematic support for Microsoft, Oracle, and ServiceNow around AI monetization. Even with constructive micro headlines, the broad tech sleeve is slightly risk-off at midday.
- Health Care is lagging: XLV at 155.98 vs. 157.38 (down ~0.9%). Stock-specific dynamics include ongoing obesity and pharma narratives and a non-index airline print that weighed separately on transport sentiment; healthcare’s move today appears more tape-driven than catalyst-driven within the sector ETFs we track.
- A defensive utility-linked ETF included in the payload (symbol shows XLU) is a relative winner: last 42.72 vs. 42.58 (up ~0.3%). That small gain fits the day’s defensive tone and the mild bid into duration-sensitive exposures.
Single-name highlights from coverage:
- Energy: Exxon Mobil has hit a new high despite political noise around Venezuelan oil deals. Separately, a piece on U.S.–Iran tensions highlights upside risk to crude via the Strait of Hormuz. These threads align with the strength we see in oil-linked ETFs at midday (see Commodities).
- Airlines/Aerospace: Boeing’s order momentum and 2025 delivery cadence remain in focus with multiple features today; one article notes it outsold Airbus last year for the first time since 2018 and has deliveries at a seven-year high. Delta Air Lines reported Q4 profit above expectations but saw the stock pressured on softer adjusted revenue.
- Payments: Visa and Mastercard are cited as experiencing their sharpest drops in months amid routing reform headlines; this mirrors XLF’s underperformance.
- Semiconductors/AI: Analysts turned more constructive on AMD and Intel, citing server CPU momentum and AI demand.
Bonds
Treasury ETFs are bid across the curve, consistent with a modest intraday drop in yields. TLT trades at 87.85 vs. 87.67 (up ~0.2%), IEF at 96.34 vs. 96.18 (up ~0.2%), and SHY at 82.87 vs. 82.83 (flat-to-up). The move fits with an environment where medium-term inflation expectations appear contained and where policy noise is prompting some duration demand midday.
Commodities
The commodity complex is firm. GLD is essentially unchanged at 422.20 vs. 422.23, but silver is outperforming again: SLV at 78.70 vs. 77.23 (up ~1.9%). Broader commodity exposure DBC is up around 0.8% to 23.38, and crude proxy USO is stronger at 73.68 vs. 71.65 (up roughly 2.8%). UNG, a natural-gas proxy, is up near 0.9% at 11.28 vs. 11.18.
The day’s commodity moves line up with recent narratives highlighted in the coverage. Several pieces tie the surge in precious metals to a mix of macro uncertainty, policy friction, and geopolitical risk, with some arguing the commodity “supercycle” case is intact. Another article underlines the risk that U.S.–Iran tensions could lift oil via Hormuz chokepoint disruptions—consistent with USO’s outperformance today.
FX and crypto
FX data in the payload show EURUSD marked around 1.165 in midday trading. Prior-day comparisons aren’t provided, but the level itself suggests a modestly weaker U.S. dollar versus the euro compared with mid-2023/2024 averages; with no change data here, we simply note the cross is mid-range into the afternoon session.
Crypto is bid: BTCUSD marks near 93,561, up about 2.3% from today’s open, after trading between roughly 91,364 and 93,787 so far. ETHUSD is near 3,193, up about 2.4% from an open around 3,119. The move aligns with broader risk-on undercurrents in more speculative corners of the market, even as large-cap equities are more mixed.
Policy and headline context shaping the tape
- Fed independence: There is broad-based institutional support for Powell from current and former central bankers, with several articles outlining the risks to credibility and inflation expectations if political pressure escalates. One piece cautions that undermining the Fed could be inflationary by lifting long-run inflation expectations. Another notes internal political resistance to near-term Fed leadership changes.
- Credit cards and payments: Multiple stories point to investor anxiety over proposed caps on credit-card APRs and routing reforms, with banks signaling potential pushback. The tone here helps explain XLF’s relative weakness.
- Earnings and guidance: JPMorgan’s beat and constructive CEO commentary set an early tone for big-bank reporting. Upcoming results will test whether corporate leaders echo the market’s optimism or strike a more cautious note on 2026 margin trajectories.
- Trade policy: A potential Supreme Court decision on tariffs could come as soon as Wednesday, but it may also be deferred; industry surveys highlight layoffs and reduced investment in supply chains tied to tariff uncertainty.
- Energy: Articles on Venezuela and Middle East risks, as well as ongoing wind project developments, keep energy transition and supply themes in focus.
Outlook: what to watch next
- Inflation data: With November CPI the latest in hand in this payload and multiple reports suggesting persistence in some categories, the next CPI release will be key for the policy path and term premia. Market- and model-based expectations remain near 2%–2.5% over 5–10 years, but a surprise could shift the front-end quickly.
- Earnings season ramp-up: After JPMorgan’s results, look for guidance on credit quality, deposit betas, and capital return at the banks; in tech, monitor commentary on AI-related spend conversion to revenue and margins; and in cyclicals, watch order books and pricing discipline.
- Tariff ruling: Any Supreme Court movement on tariff-related cases could alter sector leadership (industrial importers/exporters, retailers) and near-term inflation dynamics.
- Policy headlines: Developments around the Fed probe and credit-card rulemaking may keep financials volatile. Watch for incremental statements from policymakers and industry groups.
- Commodities and geopolitics: Oil’s sensitivity to Middle East events remains a tail risk; gold/silver strength has been an important barometer of risk hedging—watch whether that bid fades or broadens.
Risks
- Policy uncertainty: Fed independence concerns and leadership appointment delays could lift risk premia and inflation expectations if headlines intensify.
- Regulatory overhang in financials: Credit-card APR and routing proposals—while uncertain—could pressure earnings multiples in payments and card-heavy banks.
- Tariff and trade volatility: A prolonged or uncertain tariff backdrop can weigh on capex, hiring, and margins across supply chain-sensitive sectors.
- Inflation persistence: If upcoming CPI data show stickiness, rate-cut expectations could be repriced, pressuring duration-sensitive equities.
- Commodity spikes: A sharper oil move on geopolitical events could tighten financial conditions and weigh on global growth expectations.
- Guidance resets: Earnings season may reveal uneven demand and margin compression in select industries, challenging index-level valuations.
Bottom line
Midway through Tuesday’s session, the market is balancing policy risk and earnings uncertainty against resilient macro signals. Small-caps are holding up better than the mega-cap indices, financials are under pressure, and defensives and duration are catching a modest bid. Commodities—particularly oil and silver—are firm, and crypto risk appetite is improving. Into the afternoon and the rest of the week, inflation data, tariff headlines, and earnings guidance are likely to dictate whether today’s mixed tone resolves toward defensiveness or re-engages the broad-based rally seen to start the year.
Equities are mixed at midday on Tuesday, with small-caps bucking a modest pullback in the mega-cap benchmarks while bonds catch a bid and commodity-linked exposures extend their recent strength. The policy and macro context remains front-and-center: developments around Federal Reserve Chair Jerome Powell and the Justice Department probe continue to draw bipartisan and global responses, while debates over credit-card regulation and tariffs add to sector-level dispersion. Early bank earnings and upcoming inflation data keep investors cautious about near-term positioning.
At 1:30 p.m. ET, SPY is trading near 692.91, down roughly 0.3% from Monday’s 695.16 close. QQQ sits around 625.43, off about 0.3% from 627.17. The Dow proxy DIA is softer at 492.35, down close to 0.7% versus 495.90, while small-cap IWM is edging higher—last at 262.02, up about 0.2% from 261.50. The style divergence—small-caps modestly green against softer large-caps—comes as energy and industrial themes remain active in headlines and as investors weigh policy risk and earnings guidance into the back half of January.
Macro backdrop: yields, inflation, expectations
Treasury yields remain elevated across the curve versus mid-2025 levels, though the latest available prints (Jan. 9) show the 10-year at 4.18%, five-year at 3.75%, two-year at 3.54%, and 30-year at 4.82%. The shape implies a still-shallow inversion in the front end with relatively higher term premia, consistent with an economy that has absorbed higher rates without a sharp demand shock. On inflation, the most recent CPI data available (November) show headline CPI at 325.03 (index level) and core CPI at 331.07. Market- and model-based inflation expectations as of December point to 1-year inflation near 3.20% (model), five-year around 2.42% and 10-year near 2.34% (model), with market-implied five- and ten-year breakevens around 2.28% and 2.24%, respectively. Overall, medium-term expectations appear anchored near or a little above 2%.
The policy overlay remains critical. A series of pieces today and yesterday highlight that global central bankers and former Fed officials have publicly defended Powell amid the DOJ probe, emphasizing the importance of Fed independence. Political dynamics could also affect Fed appointments; one senator has vowed to block nominees until the probe is resolved. Separately, discussion of credit-card reforms—from a proposed 10% cap on APRs to network routing changes—has implications for consumer finance, interchange economics, and card issuer profitability.
Equities and sectors
Benchmarks:
- SPY (S&P 500) at 692.91 vs. 695.16 prior close (down ~0.3%).
- QQQ (Nasdaq-100) at 625.43 vs. 627.17 (down ~0.3%).
- DIA (Dow) at 492.35 vs. 495.90 (down ~0.7%).
- IWM (Russell 2000) at 262.02 vs. 261.50 (up ~0.2%).
The dispersion aligns with a few crosscurrents in today’s news flow:
- Financials are under pressure: XLF trades near 54.36 vs. 55.29 yesterday (down about 1.7%). Headlines cite investor jitters over potential requirements for a lower-cost alternative for credit-card routing and new proposals to cap APRs, while JPMorgan’s results marked a constructive start to big-bank earnings, with CEO commentary noting a resilient U.S. economy. The competitive/regulatory overhang seems to be the dominant intraday driver for the group.
- Technology is modestly softer: XLK is around 146.39 vs. 146.79 (down about 0.3%). The tape is digesting a flurry of analyst calls across semis and software—positive notes on AMD and Intel, and thematic support for Microsoft, Oracle, and ServiceNow around AI monetization. Even with constructive micro headlines, the broad tech sleeve is slightly risk-off at midday.
- Health Care is lagging: XLV at 155.98 vs. 157.38 (down ~0.9%). Stock-specific dynamics include ongoing obesity and pharma narratives and a non-index airline print that weighed separately on transport sentiment; healthcare’s move today appears more tape-driven than catalyst-driven within the sector ETFs we track.
- A defensive utility-linked ETF included in the payload (symbol shows XLU) is a relative winner: last 42.72 vs. 42.58 (up ~0.3%). That small gain fits the day’s defensive tone and the mild bid into duration-sensitive exposures.
Single-name highlights from coverage:
- Energy: Exxon Mobil has hit a new high despite political noise around Venezuelan oil deals. Separately, a piece on U.S.–Iran tensions highlights upside risk to crude via the Strait of Hormuz. These threads align with the strength we see in oil-linked ETFs at midday (see Commodities).
- Airlines/Aerospace: Boeing’s order momentum and 2025 delivery cadence remain in focus with multiple features today; one article notes it outsold Airbus last year for the first time since 2018 and has deliveries at a seven-year high. Delta Air Lines reported Q4 profit above expectations but saw the stock pressured on softer adjusted revenue.
- Payments: Visa and Mastercard are cited as experiencing their sharpest drops in months amid routing reform headlines; this mirrors XLF’s underperformance.
- Semiconductors/AI: Analysts turned more constructive on AMD and Intel, citing server CPU momentum and AI demand.
Bonds
Treasury ETFs are bid across the curve, consistent with a modest intraday drop in yields. TLT trades at 87.85 vs. 87.67 (up ~0.2%), IEF at 96.34 vs. 96.18 (up ~0.2%), and SHY at 82.87 vs. 82.83 (flat-to-up). The move fits with an environment where medium-term inflation expectations appear contained and where policy noise is prompting some duration demand midday.
Commodities
The commodity complex is firm. GLD is essentially unchanged at 422.20 vs. 422.23, but silver is outperforming again: SLV at 78.70 vs. 77.23 (up ~1.9%). Broader commodity exposure DBC is up around 0.8% to 23.38, and crude proxy USO is stronger at 73.68 vs. 71.65 (up roughly 2.8%). UNG, a natural-gas proxy, is up near 0.9% at 11.28 vs. 11.18.
The day’s commodity moves line up with recent narratives highlighted in the coverage. Several pieces tie the surge in precious metals to a mix of macro uncertainty, policy friction, and geopolitical risk, with some arguing the commodity “supercycle” case is intact. Another article underlines the risk that U.S.–Iran tensions could lift oil via Hormuz chokepoint disruptions—consistent with USO’s outperformance today.
FX and crypto
FX data in the payload show EURUSD marked around 1.165 in midday trading. Prior-day comparisons aren’t provided, but the level itself suggests a modestly weaker U.S. dollar versus the euro compared with mid-2023/2024 averages; with no change data here, we simply note the cross is mid-range into the afternoon session.
Crypto is bid: BTCUSD marks near 93,561, up about 2.3% from today’s open, after trading between roughly 91,364 and 93,787 so far. ETHUSD is near 3,193, up about 2.4% from an open around 3,119. The move aligns with broader risk-on undercurrents in more speculative corners of the market, even as large-cap equities are more mixed.
Policy and headline context shaping the tape
- Fed independence: There is broad-based institutional support for Powell from current and former central bankers, with several articles outlining the risks to credibility and inflation expectations if political pressure escalates. One piece cautions that undermining the Fed could be inflationary by lifting long-run inflation expectations. Another notes internal political resistance to near-term Fed leadership changes.
- Credit cards and payments: Multiple stories point to investor anxiety over proposed caps on credit-card APRs and routing reforms, with banks signaling potential pushback. The tone here helps explain XLF’s relative weakness.
- Earnings and guidance: JPMorgan’s beat and constructive CEO commentary set an early tone for big-bank reporting. Upcoming results will test whether corporate leaders echo the market’s optimism or strike a more cautious note on 2026 margin trajectories.
- Trade policy: A potential Supreme Court decision on tariffs could come as soon as Wednesday, but it may also be deferred; industry surveys highlight layoffs and reduced investment in supply chains tied to tariff uncertainty.
- Energy: Articles on Venezuela and Middle East risks, as well as ongoing wind project developments, keep energy transition and supply themes in focus.
Outlook: what to watch next
- Inflation data: With November CPI the latest in hand in this payload and multiple reports suggesting persistence in some categories, the next CPI release will be key for the policy path and term premia. Market- and model-based expectations remain near 2%–2.5% over 5–10 years, but a surprise could shift the front-end quickly.
- Earnings season ramp-up: After JPMorgan’s results, look for guidance on credit quality, deposit betas, and capital return at the banks; in tech, monitor commentary on AI-related spend conversion to revenue and margins; and in cyclicals, watch order books and pricing discipline.
- Tariff ruling: Any Supreme Court movement on tariff-related cases could alter sector leadership (industrial importers/exporters, retailers) and near-term inflation dynamics.
- Policy headlines: Developments around the Fed probe and credit-card rulemaking may keep financials volatile. Watch for incremental statements from policymakers and industry groups.
- Commodities and geopolitics: Oil’s sensitivity to Middle East events remains a tail risk; gold/silver strength has been an important barometer of risk hedging—watch whether that bid fades or broadens.
Risks
- Policy uncertainty: Fed independence concerns and leadership appointment delays could lift risk premia and inflation expectations if headlines intensify.
- Regulatory overhang in financials: Credit-card APR and routing proposals—while uncertain—could pressure earnings multiples in payments and card-heavy banks.
- Tariff and trade volatility: A prolonged or uncertain tariff backdrop can weigh on capex, hiring, and margins across supply chain-sensitive sectors.
- Inflation persistence: If upcoming CPI data show stickiness, rate-cut expectations could be repriced, pressuring duration-sensitive equities.
- Commodity spikes: A sharper oil move on geopolitical events could tighten financial conditions and weigh on global growth expectations.
- Guidance resets: Earnings season may reveal uneven demand and margin compression in select industries, challenging index-level valuations.
Bottom line
Midway through Tuesday’s session, the market is balancing policy risk and earnings uncertainty against resilient macro signals. Small-caps are holding up better than the mega-cap indices, financials are under pressure, and defensives and duration are catching a modest bid. Commodities—particularly oil and silver—are firm, and crypto risk appetite is improving. Into the afternoon and the rest of the week, inflation data, tariff headlines, and earnings guidance are likely to dictate whether today’s mixed tone resolves toward defensiveness or re-engages the broad-based rally seen to start the year.