State of Market: Midday 12/12/25
Midday markets dip as post-Fed rotation cools; tech underperforms while financials and health care show relative resilience
Long-end Treasury yields remain elevated versus the front end, pressuring duration and growth proxies. AI-related headlines keep mega-cap tech in focus, while gold firms and crypto trades lower.
TendieTensor.com State of Market Midday
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Equities are taking a breather at mid-session Friday, with major U.S. benchmarks easing after a strong, rate-cut-fueled run to records earlier in the week. The tone is risk-aware rather than panicked: breadth is mixed and sector leadership remains rotational, with technology lagging while financials and health care show relative strength. The macro backdrop features a still-elevated 10-year Treasury yield versus the front end, reinforcing a modest duration headwind that is being reflected in long-bond ETFs today. Commodities are mixed, with gold firmer and broad commodities softer; crypto is lower despite Wednesday’s policy easing.
At 1:30 p.m. ET, the broad indices are off their prior closes. SPY last trades near 683.81 versus a previous close of 689.17, QQQ is at 616.70 compared with 625.58 Thursday, the price-weighted DIA is modestly lower at 486.42 versus 487.87, and small caps via IWM are at 255.445 versus 257.80. The modest pullback is consistent with consolidation after Wednesday’s rate cut and Thursday’s rotation-driven records, as described in coverage noting the Dow and S&P 500 finishing at or near records on improved economic sentiment beyond AI-driven leadership.
Macro and rates
Treasury yields as of December 10 remain anchored with a modestly upward-sloping curve in the intermediates and a higher long end: 2-year at 3.54%, 5-year at 3.72%, 10-year at 4.13%, and 30-year at 4.78%. The configuration helps explain today’s duration weakness on the long end. Inflation data available through September show headline CPI at 324.368 (index level) and core CPI at 330.542, while market-based inflation expectations remain contained: roughly 2.35% for the 5-year and 2.27% for the 10-year, with a 5y5y forward near 2.18%. That profile suggests medium-term inflation credibility remains intact.
Policy signaling added nuance today. Chicago Fed President Austan Goolsbee, one of two dissenters to the latest rate cut, reiterated that inflation “remains too high” and argued the Committee could have waited for additional data before easing. Separate market commentary highlights that the bond rally off the Fed’s cut could be tested into January, a risk consistent with today’s pressure on duration-heavy ETFs. The backdrop also drew comparisons to 1995 in some strategist notes earlier in the week, underscoring how policy and the 2-year have been converging. For now, market-based inflation expectations do not signal a de-anchoring, but the long end’s relative stickiness keeps financial conditions sensitive to growth and supply dynamics.
Equities and sectors
Within sectors, the tape reflects a continuation of the rotation theme: financials are firm and technology lags. XLF trades at 54.979, slightly above its 54.87 prior close, while XLK is lower at 144.89 from 147.97 yesterday. Health care is a relative winner: XLV last trades at 153.73 versus 153.58 prior, modestly higher. The energy/defensive proxy shown in today’s sector list trades lower at 42.93 versus 43.04 prior. The pattern is consistent with the narrative that investors have been rotating out of expensive growth into value and cyclicals as the Fed transitions policy, as noted in media commentary about capital moving beyond the AI complex into broader market exposure.
Company and thematic highlights
AI remains the market’s central theme—and a source of intraday volatility. Oracle’s mixed results and financing concerns weighed on AI sentiment Thursday, with coverage emphasizing that Oracle’s decline dragged Nvidia and other AI leaders. Today, that cautious tone is still evident in tech’s underperformance. By contrast, Broadcom’s earnings were framed positively, with commentary noting that AI semiconductor revenue could accelerate further, supporting the stock, even as some investors express uncertainty around disclosure of a new AI customer. The net read-through for the group remains mixed: robust demand for custom AI silicon, balanced against periodic worries about the pace and financing of hyperscale spending.
Outside semis, the AI halo continues to influence narratives across large platforms. Analysts cited Alphabet and Amazon as well-positioned AI beneficiaries next year, while a separate note framed Meta as an overlooked AI winner despite recent pressure—a “buy the dip” argument. Those views fit with the recent dynamic of tech leadership facing valuation and spending scrutiny while still owning key secular tailwinds. Additionally, Disney’s $1 billion investment in OpenAI and the licensing of characters for Sora underscore how media incumbents are moving to embed generative AI into content workflows and consumer experiences.
Autos and EVs also intersect with AI today. Rivian held its Autonomy and AI Day to outline its roadmap, but coverage highlighted that shares fell into the event as investors looked for more concrete timelines and monetization paths. The contrast with Tesla’s AI narrative remains a talking point, with investors still assigning a premium to platforms seen as closer to scalable autonomy.
Consumer and retail stories are mixed. Costco exceeded sales and revenue expectations, supporting the view that scale players with membership models continue to execute, though a separate piece characterized the financial snapshot as mixed. Lululemon’s CEO departure adds governance and execution questions amid a challenging year for the brand. Visa, meanwhile, was cited as a Dow leader Thursday after the Fed cut, with some on Wall Street arguing it remains a high-quality business at an attractive relative valuation; that dovetails with today’s financials resilience.
Cannabis stocks are a notable outlier on the upside. Reports that the administration will significantly ease federal restrictions on marijuana lifted the group, with Tilray flagged up sharply in earlier trading. The scope and timing of policy changes remain to be seen, but the direction of travel supports improved access to capital and banking services if follow-through materializes.
Bonds
The ETF tape reflects the rate backdrop. TLT last trades at 87.3355 versus 88.19 prior, and IEF is at 96.215 from 96.45—both lower on the day—while the front-end SHY is essentially flat-to-slightly higher at 82.875 versus 82.86. That’s consistent with mild bear-steepening pressure, aligning with the longer tenors’ higher yields relative to the front end. With market-based inflation expectations contained, the impulse looks more growth- and supply-driven than inflationary, but dissenting Fed commentary and strategist warnings about January make the path for duration into year-end a key watch item.
Commodities
Gold is firmer: GLD trades at 395.21 versus 393.24 yesterday, consistent with a blend of lower policy rates, residual macro uncertainty, and ongoing geopolitical noise. Silver diverges, with SLV at 56.145 versus 57.62 prior. Energy is softer: USO is at 69.01 versus 69.25 yesterday and broad commodities via DBC are at 22.9507 versus 23.11 prior. Natural gas (UNG) is also weaker at 12.855 versus 13.08. The mix points to a day of precious-metals resilience against softer industrials and energy, consistent with a cautious growth tape and still-firm real yields.
FX and crypto
EURUSD marks near 1.1744 at midday. Without a prior close in the dataset, directionality can’t be inferred, but the level is consistent with a softer dollar versus the euro than earlier in the year. Crypto trades lower intraday despite Wednesday’s rate cut. BTCUSD marks near 90,582 with an intraday range of about 89,466 to 92,772 and an open of roughly 92,422. ETHUSD marks near 3,088 with an intraday range of about 3,044 to 3,267 and an open near 3,248. That softness aligns with prior commentary that bitcoin did not react positively to the Fed’s cut, suggesting policy easing alone is not the current driver for digital asset flows.
Context and positioning
The broader market narrative remains one of diffusion beyond AI leaders to a wider set of beneficiaries from lower policy rates and fading recession risk. Thursday’s record closes for the Dow and S&P 500 were tied to that broadening. Today’s giveback—especially in long-duration tech—appears to be an orderly retracement rather than a trend reversal. Sector dispersion is meaningful: financials and health care are green at the margin, technology is red, energy/defensive entries are a touch softer, and small caps are consolidating after an outsized multi-week run.
What to watch next
- Long-end yields: With TLT and IEF lower today and 10-year yields still above 4%, further back-up in the long end could continue to pressure growth proxies and duration-heavy assets.
- AI spending cadence: Oracle’s post-earnings reaction and Broadcom’s upbeat AI revenue outlook highlight the push-pull in the theme. Watch for incremental datapoints from hyperscalers and suppliers.
- Consumer signal: Costco’s solid quarter argues for resilience among scale retailers; ongoing updates on holiday traffic and promotional intensity remain important for margins into Q1.
- Policy developments: Follow-through on potential cannabis reclassification (sector financing/access), tariff adjustments aimed at consumer prices, and health policy (ACA subsidy path) could alter sector views.
- Crypto into year-end: With bitcoin and ether softer despite easing, monitor whether liquidity and risk appetite re-emerge or if consolidation continues.
Risks
- Rates re-pricing: A January rise in yields, as some warn, could tighten financial conditions and re-rate equities, especially high-duration names.
- AI capex sustainability: Financing structures and payback timelines for hyperscale AI spending remain under scrutiny; any pullback could drag a wide supplier ecosystem.
- Policy and geopolitics: Trade/tariff shifts, cannabis scheduling changes, and geopolitical developments (including energy-related headlines) can drive cross-asset volatility.
- Consumer fatigue: Mixed consumer indicators and company-specific execution risks (e.g., apparel, discretionary) could challenge earnings breadth.
- Liquidity: Year-end liquidity can exacerbate moves; crypto’s intraday swings underscore this dynamic.
Bottom line
Midway through Friday’s session, equities are consolidating after a powerful, policy-supported rally. The mix of firmer gold, softer long-duration bonds, and tech underperformance is consistent with an environment where long-end yields remain the swing factor. Rotations toward financials and health care suggest investors are still looking to broaden exposure beyond the AI complex, even as that theme remains central to market leadership. Into the afternoon and next week, the interplay between yields and AI-related headlines looks set to guide the tape.
Equities are taking a breather at mid-session Friday, with major U.S. benchmarks easing after a strong, rate-cut-fueled run to records earlier in the week. The tone is risk-aware rather than panicked: breadth is mixed and sector leadership remains rotational, with technology lagging while financials and health care show relative strength. The macro backdrop features a still-elevated 10-year Treasury yield versus the front end, reinforcing a modest duration headwind that is being reflected in long-bond ETFs today. Commodities are mixed, with gold firmer and broad commodities softer; crypto is lower despite Wednesday’s policy easing.
At 1:30 p.m. ET, the broad indices are off their prior closes. SPY last trades near 683.81 versus a previous close of 689.17, QQQ is at 616.70 compared with 625.58 Thursday, the price-weighted DIA is modestly lower at 486.42 versus 487.87, and small caps via IWM are at 255.445 versus 257.80. The modest pullback is consistent with consolidation after Wednesday’s rate cut and Thursday’s rotation-driven records, as described in coverage noting the Dow and S&P 500 finishing at or near records on improved economic sentiment beyond AI-driven leadership.
Macro and rates
Treasury yields as of December 10 remain anchored with a modestly upward-sloping curve in the intermediates and a higher long end: 2-year at 3.54%, 5-year at 3.72%, 10-year at 4.13%, and 30-year at 4.78%. The configuration helps explain today’s duration weakness on the long end. Inflation data available through September show headline CPI at 324.368 (index level) and core CPI at 330.542, while market-based inflation expectations remain contained: roughly 2.35% for the 5-year and 2.27% for the 10-year, with a 5y5y forward near 2.18%. That profile suggests medium-term inflation credibility remains intact.
Policy signaling added nuance today. Chicago Fed President Austan Goolsbee, one of two dissenters to the latest rate cut, reiterated that inflation “remains too high” and argued the Committee could have waited for additional data before easing. Separate market commentary highlights that the bond rally off the Fed’s cut could be tested into January, a risk consistent with today’s pressure on duration-heavy ETFs. The backdrop also drew comparisons to 1995 in some strategist notes earlier in the week, underscoring how policy and the 2-year have been converging. For now, market-based inflation expectations do not signal a de-anchoring, but the long end’s relative stickiness keeps financial conditions sensitive to growth and supply dynamics.
Equities and sectors
Within sectors, the tape reflects a continuation of the rotation theme: financials are firm and technology lags. XLF trades at 54.979, slightly above its 54.87 prior close, while XLK is lower at 144.89 from 147.97 yesterday. Health care is a relative winner: XLV last trades at 153.73 versus 153.58 prior, modestly higher. The energy/defensive proxy shown in today’s sector list trades lower at 42.93 versus 43.04 prior. The pattern is consistent with the narrative that investors have been rotating out of expensive growth into value and cyclicals as the Fed transitions policy, as noted in media commentary about capital moving beyond the AI complex into broader market exposure.
Company and thematic highlights
AI remains the market’s central theme—and a source of intraday volatility. Oracle’s mixed results and financing concerns weighed on AI sentiment Thursday, with coverage emphasizing that Oracle’s decline dragged Nvidia and other AI leaders. Today, that cautious tone is still evident in tech’s underperformance. By contrast, Broadcom’s earnings were framed positively, with commentary noting that AI semiconductor revenue could accelerate further, supporting the stock, even as some investors express uncertainty around disclosure of a new AI customer. The net read-through for the group remains mixed: robust demand for custom AI silicon, balanced against periodic worries about the pace and financing of hyperscale spending.
Outside semis, the AI halo continues to influence narratives across large platforms. Analysts cited Alphabet and Amazon as well-positioned AI beneficiaries next year, while a separate note framed Meta as an overlooked AI winner despite recent pressure—a “buy the dip” argument. Those views fit with the recent dynamic of tech leadership facing valuation and spending scrutiny while still owning key secular tailwinds. Additionally, Disney’s $1 billion investment in OpenAI and the licensing of characters for Sora underscore how media incumbents are moving to embed generative AI into content workflows and consumer experiences.
Autos and EVs also intersect with AI today. Rivian held its Autonomy and AI Day to outline its roadmap, but coverage highlighted that shares fell into the event as investors looked for more concrete timelines and monetization paths. The contrast with Tesla’s AI narrative remains a talking point, with investors still assigning a premium to platforms seen as closer to scalable autonomy.
Consumer and retail stories are mixed. Costco exceeded sales and revenue expectations, supporting the view that scale players with membership models continue to execute, though a separate piece characterized the financial snapshot as mixed. Lululemon’s CEO departure adds governance and execution questions amid a challenging year for the brand. Visa, meanwhile, was cited as a Dow leader Thursday after the Fed cut, with some on Wall Street arguing it remains a high-quality business at an attractive relative valuation; that dovetails with today’s financials resilience.
Cannabis stocks are a notable outlier on the upside. Reports that the administration will significantly ease federal restrictions on marijuana lifted the group, with Tilray flagged up sharply in earlier trading. The scope and timing of policy changes remain to be seen, but the direction of travel supports improved access to capital and banking services if follow-through materializes.
Bonds
The ETF tape reflects the rate backdrop. TLT last trades at 87.3355 versus 88.19 prior, and IEF is at 96.215 from 96.45—both lower on the day—while the front-end SHY is essentially flat-to-slightly higher at 82.875 versus 82.86. That’s consistent with mild bear-steepening pressure, aligning with the longer tenors’ higher yields relative to the front end. With market-based inflation expectations contained, the impulse looks more growth- and supply-driven than inflationary, but dissenting Fed commentary and strategist warnings about January make the path for duration into year-end a key watch item.
Commodities
Gold is firmer: GLD trades at 395.21 versus 393.24 yesterday, consistent with a blend of lower policy rates, residual macro uncertainty, and ongoing geopolitical noise. Silver diverges, with SLV at 56.145 versus 57.62 prior. Energy is softer: USO is at 69.01 versus 69.25 yesterday and broad commodities via DBC are at 22.9507 versus 23.11 prior. Natural gas (UNG) is also weaker at 12.855 versus 13.08. The mix points to a day of precious-metals resilience against softer industrials and energy, consistent with a cautious growth tape and still-firm real yields.
FX and crypto
EURUSD marks near 1.1744 at midday. Without a prior close in the dataset, directionality can’t be inferred, but the level is consistent with a softer dollar versus the euro than earlier in the year. Crypto trades lower intraday despite Wednesday’s rate cut. BTCUSD marks near 90,582 with an intraday range of about 89,466 to 92,772 and an open of roughly 92,422. ETHUSD marks near 3,088 with an intraday range of about 3,044 to 3,267 and an open near 3,248. That softness aligns with prior commentary that bitcoin did not react positively to the Fed’s cut, suggesting policy easing alone is not the current driver for digital asset flows.
Context and positioning
The broader market narrative remains one of diffusion beyond AI leaders to a wider set of beneficiaries from lower policy rates and fading recession risk. Thursday’s record closes for the Dow and S&P 500 were tied to that broadening. Today’s giveback—especially in long-duration tech—appears to be an orderly retracement rather than a trend reversal. Sector dispersion is meaningful: financials and health care are green at the margin, technology is red, energy/defensive entries are a touch softer, and small caps are consolidating after an outsized multi-week run.
What to watch next
- Long-end yields: With TLT and IEF lower today and 10-year yields still above 4%, further back-up in the long end could continue to pressure growth proxies and duration-heavy assets.
- AI spending cadence: Oracle’s post-earnings reaction and Broadcom’s upbeat AI revenue outlook highlight the push-pull in the theme. Watch for incremental datapoints from hyperscalers and suppliers.
- Consumer signal: Costco’s solid quarter argues for resilience among scale retailers; ongoing updates on holiday traffic and promotional intensity remain important for margins into Q1.
- Policy developments: Follow-through on potential cannabis reclassification (sector financing/access), tariff adjustments aimed at consumer prices, and health policy (ACA subsidy path) could alter sector views.
- Crypto into year-end: With bitcoin and ether softer despite easing, monitor whether liquidity and risk appetite re-emerge or if consolidation continues.
Risks
- Rates re-pricing: A January rise in yields, as some warn, could tighten financial conditions and re-rate equities, especially high-duration names.
- AI capex sustainability: Financing structures and payback timelines for hyperscale AI spending remain under scrutiny; any pullback could drag a wide supplier ecosystem.
- Policy and geopolitics: Trade/tariff shifts, cannabis scheduling changes, and geopolitical developments (including energy-related headlines) can drive cross-asset volatility.
- Consumer fatigue: Mixed consumer indicators and company-specific execution risks (e.g., apparel, discretionary) could challenge earnings breadth.
- Liquidity: Year-end liquidity can exacerbate moves; crypto’s intraday swings underscore this dynamic.
Bottom line
Midway through Friday’s session, equities are consolidating after a powerful, policy-supported rally. The mix of firmer gold, softer long-duration bonds, and tech underperformance is consistent with an environment where long-end yields remain the swing factor. Rotations toward financials and health care suggest investors are still looking to broaden exposure beyond the AI complex, even as that theme remains central to market leadership. Into the afternoon and next week, the interplay between yields and AI-related headlines looks set to guide the tape.