State of Market: Midday 01/02/26
Midday market: Stocks mixed to start 2026 as yields hold higher and precious metals firm
Dow and small caps edge up while S&P 500 and Nasdaq ease; energy leads sectors, tech soft; gold and silver tick higher as oil and gas dip; crypto broad-based gains
TendieTensor.com State of Market Midday
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Markets are starting the first trading session of 2026 on a mixed footing at midday. The Dow Jones Industrial Average proxy (DIA) is modestly higher, and small caps (IWM) are also in the green, while the S&P 500 (SPY) and Nasdaq 100 (QQQ) are trading slightly lower. Sector leadership is rotating toward energy, with technology a touch softer. In the macro backdrop, Treasury yields remain elevated across the curve relative to short tenors, inflation expectations beyond one year are anchored near the mid‑2% range, and investors are digesting recent indications from Federal Reserve minutes that officials are divided on the pace and path of additional rate cuts. Precious metals are edging up, oil and natural gas are softer, and major cryptocurrencies are broadly bid.
Macro and rates: a higher, steeper curve into 2026
The latest available Treasury data show a curve that is upward sloping from the 2‑year out through the 30‑year. The 2‑year sits at 3.45%, the 5‑year at 3.68%, the 10‑year at 4.14%, and the 30‑year at 4.81%. Short benchmarks (1‑month and 3‑month) are 3.65%, and the 1‑year is 3.47%. This configuration reflects a steeper curve versus the front end, with term premiums consistent with a market that sees inflation normalizing over the medium term and a policy rate that is likely nearer a plateau than at the start of an easing cycle.
On inflation, the November CPI level stands at 325.031 with the core CPI level at 331.068. Without a contemporaneous month‑over‑month or year‑over‑year rate in this dataset, we refrain from extrapolating pace; however, model‑based inflation expectations provide useful context. One‑year expectations are at 3.20%, while 5‑, 10‑, and 30‑year measures cluster between roughly 2.34% and 2.44%. This term structure—elevated short‑term expectations and anchored longer‑run expectations—aligns with a market view that residual price pressure persists near term but converges toward the Federal Reserve’s target range over time.
Policy remains a focal point. Recent reporting on Federal Reserve minutes highlighted a deep split over the cadence of additional cuts, with some members favoring a pause to assess prior easing effects. Separate coverage suggested rates could be on hold “for some time.” For risk assets, a higher long‑end yield alongside a patient Fed can support financials via a steeper curve while applying a mild headwind to the longer‑duration parts of the equity complex, notably megacap technology.
Equities: a mixed start with rotation hints
• S&P 500 (SPY) is fractionally below its prior close at 680.99 versus 681.92, indicating a slight pullback.
• Nasdaq 100 (QQQ) is also softer at 611.71 compared with 614.31 previously.
• Dow (DIA) is a relative outperformer, trading 481.32 versus a 480.57 prior close.
• Small caps (IWM) are firmer at 247.20 versus 246.16, suggesting improved breadth beneath the largest benchmarks.
The pattern of Dow and small‑cap resilience against modest softness in the S&P and Nasdaq is consistent with the yield backdrop and with a budding rotation narrative. Recent commentary has questioned whether technology will continue to lead in 2026, and the current session’s modest dip in tech contrasts with gains in cyclical areas like energy (see sectors below). News flow around specific companies also frames investor positioning: Tesla’s weaker sales updates and cautious forecast headlines weighed on sentiment for parts of megacap growth at the margin, while other stories—like insider buying at Nike and a technical “golden cross” for Berkshire Hathaway—support pockets of value and quality.
Sectors: energy leads, tech lags; defensives mixed
Among the sector ETFs in focus:
• Energy (XLE) is up intraday, with its last trade above the prior close (43.215 vs. 42.69). The outperformance comes despite softer crude benchmarks today (see commodities), suggesting investors may be leaning into energy equities as a potential cyclical/value expression alongside a steeper curve and improved global growth hopes tied to recent China activity data and consumer support measures reported earlier in the week.
• Technology (XLK) is a touch lower at 143.79 vs. 143.97. This lines up with the slight underperformance in the Nasdaq complex and an ongoing debate about whether tech leadership broadens or rotates in 2026. Headlines featuring both bullish and more cautious takes on AI beneficiaries underscore a more selective phase for the group.
• Financials (XLF) are slightly below their prior close at 54.61 vs. 54.77, a nuanced move considering the curve. A steeper curve historically benefits net interest margins for regional lenders, and separate analysis has flagged potential tailwinds for regionals in 2026. Today’s modest dip likely reflects index‑level consolidation rather than a change in the medium‑term thesis.
• Health Care (XLV) is marginally lower at 154.70 vs. 154.80. The sector’s defensiveness may temper downside if broader risk volatility emerges, but it is not leading in today’s session.
Bonds: long duration steady to softer; front end firm
Treasury ETFs show a mixed picture consistent with the yield snapshot:
• Long duration (TLT) is essentially flat to slightly lower at 87.14 vs. 87.16. That aligns with a 30‑year yield near 4.81% and a 10‑year near 4.14%.
• Intermediates (IEF) are just below the prior close at 96.13 vs. 96.16.
• Front end (SHY) is modestly higher at 82.85 vs. 82.82, consistent with stability in short rates.
The combination suggests the market is settling into the new year with yields holding recent ranges, while duration‑sensitive assets consolidate gains from late‑2025 rallies.
Commodities: precious metals bid; oil and gas softer
• Gold (GLD) is slightly higher at 397.06 vs. 396.31. Multiple year‑end pieces noted record performances for precious metals in 2025, followed by some profit‑taking; today’s modest bid fits a consolidation narrative amid anchored longer‑run inflation expectations and lingering geopolitical risk premia.
• Silver (SLV) is up at 64.97 vs. 64.42. Silver’s outsized 2025 volatility—and debates about whether it is in bubble territory—remain a theme; for now, the metal is rebounding as the year begins.
• Crude oil (USO) is lower at 68.60 vs. 69.16. Recent headlines around Russian supply to India and policy dynamics have been a factor in crude flows, but today’s price action points to a softer demand or positioning tone on day one of 2026.
• Natural gas (UNG) trades down at 12.10 vs. 12.26, maintaining pressure after a challenging late‑year stretch for gas benchmarks.
• Broad commodities (DBC) are marginally lower at 22.345 vs. 22.36, reflecting the mixed complex—metals steadier, energy weaker.
FX and crypto: dollar vs. euro softer; crypto rallies
• EURUSD is marked at 1.1721. With the session’s open shown above today’s mark in the dataset, the dollar appears a touch softer vs. the euro compared with the open; however, a fuller directional view would require prior closing context not provided here.
• Bitcoin (BTCUSD) is higher intraday with a mark near 90,294 versus the session open around 88,526, with an intraday range spanning roughly 88,371 to 90,987 in the provided data.
• Ether (ETHUSD) is also firmer with a mark near 3,122 versus an open around 3,008, and an intraday range of roughly 3,005 to 3,153.
Crypto’s tone is constructive to start the year, with both majors trading above their indicated opens.
Notable company and thematic headlines
• Tesla (TSLA): Multiple reports flagged weaker EV sales relative to expectations and a pessimistic fourth‑quarter forecast, extending a rough stretch and ceding global EV leadership to China’s BYD in 2025. While we do not have intraday pricing for TSLA here, the news skew is negative and reinforces a more selective stance toward megacap growth.
• Netflix (NFLX): A report highlighted a strong box office result from the theatrical screening of the “Stranger Things” finale, providing a lift to cinema owners over the holiday period. The story underscores the company’s experimentation with distribution windows and ancillary revenue opportunities.
• Berkshire Hathaway (BRK.B): Technical commentary noted a “golden cross” for shares soon after the leadership transition, historically a constructive signal. Warren Buffett’s final interview as CEO emphasized Berkshire’s longevity, providing a quality‑and‑durability counterpoint to growth‑centric narratives.
• RH (RH) and Wayfair (W): Furniture names rose following a delay in tariffs on certain furnishings and cabinets. The policy reprieve provides a near‑term tailwind to discretionary retailers exposed to home goods.
• Apple (AAPL) and Nike (NKE): Apple appeared in mixed coverage concerning its participation in Nasdaq leadership and component cost dynamics, while Nike shares were supported earlier this week by open‑market insider buying (CEO and a director). The juxtaposition reflects more idiosyncratic drivers inside megacap consumer and tech.
• Meta Platforms (META) and AI: Deal activity to close 2025 highlighted ongoing investment in AI capabilities among megacaps, while other pieces debated which AI beneficiaries might lead in 2026. That split perspective aligns with today’s mild tech underperformance within an otherwise constructive broader market backdrop.
• Policy and macro: Fed minutes coverage pointed to a divided committee and the possibility of a longer pause, while jobless claims late last week declined for a third straight week—an indicator of steady labor conditions. These data points collectively help explain the firmness in yields and the mixed equity tape today.
Outlook: what to watch next
Investors should monitor:
• The tenor of the Treasury market: With the 10‑year near 4.14% and a steeper curve, leadership may continue to favor cyclicals and value over longer‑duration growth until yields decisively move lower.
• Sector rotation breadth: Small‑cap outperformance and energy leadership today argue for further breadth expansion. Confirmation would be a sustained IWM advance and stabilization in financials.
• Corporate updates: Early pre‑announcements and the start of Q4 earnings season will test narratives around 2026 guidance, particularly in tech hardware, software tied to AI spend, and consumer discretionary exposed to housing.
• Commodities: If gold and silver retain bids while oil stays soft, the cross‑asset read would be benign financial conditions plus lingering hedging demand; a coordinated upswing across commodities would more clearly signal a reflationary bias.
• Crypto flows: A strong first week for BTC and ETH can feed momentum, but volatility remains elevated; watch for any policy headlines that could alter sentiment.
Risks
• Policy uncertainty: A prolonged Fed pause that keeps real rates restrictive could weigh on duration assets and growth equities.
• Earnings risk: If top‑line growth or margins guide lower for Q4 or 2026, high‑multiple segments could de‑rate.
• Global growth and trade: Tariff policy shifts, supply‑chain adjustments, and China demand trends can affect cyclicals and commodities.
• Market structure in metals: Silver’s volatile 2025 suggests elevated two‑way risk even amid constructive longer‑run narratives.
• Geopolitical and regulatory: Ongoing geopolitical tensions and evolving AI and market structure regulation can impact risk premia across assets.
Bottom line
At midday, the first session of 2026 reflects a balanced tape: the Dow and small caps are firmer, the S&P 500 and Nasdaq are modestly softer, energy leads, and tech gives back a little. Yields are steady to higher across the curve, inflation expectations beyond one year remain anchored, and precious metals firm while oil and gas ease. Near term, leadership may depend on the path of long yields and early corporate guidance, with rotation breadth and earnings quality likely to set the tone for January performance.
Markets are starting the first trading session of 2026 on a mixed footing at midday. The Dow Jones Industrial Average proxy (DIA) is modestly higher, and small caps (IWM) are also in the green, while the S&P 500 (SPY) and Nasdaq 100 (QQQ) are trading slightly lower. Sector leadership is rotating toward energy, with technology a touch softer. In the macro backdrop, Treasury yields remain elevated across the curve relative to short tenors, inflation expectations beyond one year are anchored near the mid‑2% range, and investors are digesting recent indications from Federal Reserve minutes that officials are divided on the pace and path of additional rate cuts. Precious metals are edging up, oil and natural gas are softer, and major cryptocurrencies are broadly bid.
Macro and rates: a higher, steeper curve into 2026
The latest available Treasury data show a curve that is upward sloping from the 2‑year out through the 30‑year. The 2‑year sits at 3.45%, the 5‑year at 3.68%, the 10‑year at 4.14%, and the 30‑year at 4.81%. Short benchmarks (1‑month and 3‑month) are 3.65%, and the 1‑year is 3.47%. This configuration reflects a steeper curve versus the front end, with term premiums consistent with a market that sees inflation normalizing over the medium term and a policy rate that is likely nearer a plateau than at the start of an easing cycle.
On inflation, the November CPI level stands at 325.031 with the core CPI level at 331.068. Without a contemporaneous month‑over‑month or year‑over‑year rate in this dataset, we refrain from extrapolating pace; however, model‑based inflation expectations provide useful context. One‑year expectations are at 3.20%, while 5‑, 10‑, and 30‑year measures cluster between roughly 2.34% and 2.44%. This term structure—elevated short‑term expectations and anchored longer‑run expectations—aligns with a market view that residual price pressure persists near term but converges toward the Federal Reserve’s target range over time.
Policy remains a focal point. Recent reporting on Federal Reserve minutes highlighted a deep split over the cadence of additional cuts, with some members favoring a pause to assess prior easing effects. Separate coverage suggested rates could be on hold “for some time.” For risk assets, a higher long‑end yield alongside a patient Fed can support financials via a steeper curve while applying a mild headwind to the longer‑duration parts of the equity complex, notably megacap technology.
Equities: a mixed start with rotation hints
• S&P 500 (SPY) is fractionally below its prior close at 680.99 versus 681.92, indicating a slight pullback.
• Nasdaq 100 (QQQ) is also softer at 611.71 compared with 614.31 previously.
• Dow (DIA) is a relative outperformer, trading 481.32 versus a 480.57 prior close.
• Small caps (IWM) are firmer at 247.20 versus 246.16, suggesting improved breadth beneath the largest benchmarks.
The pattern of Dow and small‑cap resilience against modest softness in the S&P and Nasdaq is consistent with the yield backdrop and with a budding rotation narrative. Recent commentary has questioned whether technology will continue to lead in 2026, and the current session’s modest dip in tech contrasts with gains in cyclical areas like energy (see sectors below). News flow around specific companies also frames investor positioning: Tesla’s weaker sales updates and cautious forecast headlines weighed on sentiment for parts of megacap growth at the margin, while other stories—like insider buying at Nike and a technical “golden cross” for Berkshire Hathaway—support pockets of value and quality.
Sectors: energy leads, tech lags; defensives mixed
Among the sector ETFs in focus:
• Energy (XLE) is up intraday, with its last trade above the prior close (43.215 vs. 42.69). The outperformance comes despite softer crude benchmarks today (see commodities), suggesting investors may be leaning into energy equities as a potential cyclical/value expression alongside a steeper curve and improved global growth hopes tied to recent China activity data and consumer support measures reported earlier in the week.
• Technology (XLK) is a touch lower at 143.79 vs. 143.97. This lines up with the slight underperformance in the Nasdaq complex and an ongoing debate about whether tech leadership broadens or rotates in 2026. Headlines featuring both bullish and more cautious takes on AI beneficiaries underscore a more selective phase for the group.
• Financials (XLF) are slightly below their prior close at 54.61 vs. 54.77, a nuanced move considering the curve. A steeper curve historically benefits net interest margins for regional lenders, and separate analysis has flagged potential tailwinds for regionals in 2026. Today’s modest dip likely reflects index‑level consolidation rather than a change in the medium‑term thesis.
• Health Care (XLV) is marginally lower at 154.70 vs. 154.80. The sector’s defensiveness may temper downside if broader risk volatility emerges, but it is not leading in today’s session.
Bonds: long duration steady to softer; front end firm
Treasury ETFs show a mixed picture consistent with the yield snapshot:
• Long duration (TLT) is essentially flat to slightly lower at 87.14 vs. 87.16. That aligns with a 30‑year yield near 4.81% and a 10‑year near 4.14%.
• Intermediates (IEF) are just below the prior close at 96.13 vs. 96.16.
• Front end (SHY) is modestly higher at 82.85 vs. 82.82, consistent with stability in short rates.
The combination suggests the market is settling into the new year with yields holding recent ranges, while duration‑sensitive assets consolidate gains from late‑2025 rallies.
Commodities: precious metals bid; oil and gas softer
• Gold (GLD) is slightly higher at 397.06 vs. 396.31. Multiple year‑end pieces noted record performances for precious metals in 2025, followed by some profit‑taking; today’s modest bid fits a consolidation narrative amid anchored longer‑run inflation expectations and lingering geopolitical risk premia.
• Silver (SLV) is up at 64.97 vs. 64.42. Silver’s outsized 2025 volatility—and debates about whether it is in bubble territory—remain a theme; for now, the metal is rebounding as the year begins.
• Crude oil (USO) is lower at 68.60 vs. 69.16. Recent headlines around Russian supply to India and policy dynamics have been a factor in crude flows, but today’s price action points to a softer demand or positioning tone on day one of 2026.
• Natural gas (UNG) trades down at 12.10 vs. 12.26, maintaining pressure after a challenging late‑year stretch for gas benchmarks.
• Broad commodities (DBC) are marginally lower at 22.345 vs. 22.36, reflecting the mixed complex—metals steadier, energy weaker.
FX and crypto: dollar vs. euro softer; crypto rallies
• EURUSD is marked at 1.1721. With the session’s open shown above today’s mark in the dataset, the dollar appears a touch softer vs. the euro compared with the open; however, a fuller directional view would require prior closing context not provided here.
• Bitcoin (BTCUSD) is higher intraday with a mark near 90,294 versus the session open around 88,526, with an intraday range spanning roughly 88,371 to 90,987 in the provided data.
• Ether (ETHUSD) is also firmer with a mark near 3,122 versus an open around 3,008, and an intraday range of roughly 3,005 to 3,153.
Crypto’s tone is constructive to start the year, with both majors trading above their indicated opens.
Notable company and thematic headlines
• Tesla (TSLA): Multiple reports flagged weaker EV sales relative to expectations and a pessimistic fourth‑quarter forecast, extending a rough stretch and ceding global EV leadership to China’s BYD in 2025. While we do not have intraday pricing for TSLA here, the news skew is negative and reinforces a more selective stance toward megacap growth.
• Netflix (NFLX): A report highlighted a strong box office result from the theatrical screening of the “Stranger Things” finale, providing a lift to cinema owners over the holiday period. The story underscores the company’s experimentation with distribution windows and ancillary revenue opportunities.
• Berkshire Hathaway (BRK.B): Technical commentary noted a “golden cross” for shares soon after the leadership transition, historically a constructive signal. Warren Buffett’s final interview as CEO emphasized Berkshire’s longevity, providing a quality‑and‑durability counterpoint to growth‑centric narratives.
• RH (RH) and Wayfair (W): Furniture names rose following a delay in tariffs on certain furnishings and cabinets. The policy reprieve provides a near‑term tailwind to discretionary retailers exposed to home goods.
• Apple (AAPL) and Nike (NKE): Apple appeared in mixed coverage concerning its participation in Nasdaq leadership and component cost dynamics, while Nike shares were supported earlier this week by open‑market insider buying (CEO and a director). The juxtaposition reflects more idiosyncratic drivers inside megacap consumer and tech.
• Meta Platforms (META) and AI: Deal activity to close 2025 highlighted ongoing investment in AI capabilities among megacaps, while other pieces debated which AI beneficiaries might lead in 2026. That split perspective aligns with today’s mild tech underperformance within an otherwise constructive broader market backdrop.
• Policy and macro: Fed minutes coverage pointed to a divided committee and the possibility of a longer pause, while jobless claims late last week declined for a third straight week—an indicator of steady labor conditions. These data points collectively help explain the firmness in yields and the mixed equity tape today.
Outlook: what to watch next
Investors should monitor:
• The tenor of the Treasury market: With the 10‑year near 4.14% and a steeper curve, leadership may continue to favor cyclicals and value over longer‑duration growth until yields decisively move lower.
• Sector rotation breadth: Small‑cap outperformance and energy leadership today argue for further breadth expansion. Confirmation would be a sustained IWM advance and stabilization in financials.
• Corporate updates: Early pre‑announcements and the start of Q4 earnings season will test narratives around 2026 guidance, particularly in tech hardware, software tied to AI spend, and consumer discretionary exposed to housing.
• Commodities: If gold and silver retain bids while oil stays soft, the cross‑asset read would be benign financial conditions plus lingering hedging demand; a coordinated upswing across commodities would more clearly signal a reflationary bias.
• Crypto flows: A strong first week for BTC and ETH can feed momentum, but volatility remains elevated; watch for any policy headlines that could alter sentiment.
Risks
• Policy uncertainty: A prolonged Fed pause that keeps real rates restrictive could weigh on duration assets and growth equities.
• Earnings risk: If top‑line growth or margins guide lower for Q4 or 2026, high‑multiple segments could de‑rate.
• Global growth and trade: Tariff policy shifts, supply‑chain adjustments, and China demand trends can affect cyclicals and commodities.
• Market structure in metals: Silver’s volatile 2025 suggests elevated two‑way risk even amid constructive longer‑run narratives.
• Geopolitical and regulatory: Ongoing geopolitical tensions and evolving AI and market structure regulation can impact risk premia across assets.
Bottom line
At midday, the first session of 2026 reflects a balanced tape: the Dow and small caps are firmer, the S&P 500 and Nasdaq are modestly softer, energy leads, and tech gives back a little. Yields are steady to higher across the curve, inflation expectations beyond one year remain anchored, and precious metals firm while oil and gas ease. Near term, leadership may depend on the path of long yields and early corporate guidance, with rotation breadth and earnings quality likely to set the tone for January performance.