State of Market: Midday 12/04/25
Midday markets: Small caps lead while bonds soften; commodities mixed as oil firms and silver retreats
Equities are broadly steady with IWM out front, tech mixed, and health care lagging. Long-duration Treasuries slip alongside firm yield levels, gold edges up, crude advances, and crypto cools from early strength.
TendieTensor.com State of Market Midday
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Overview
At midday, U.S. risk assets are holding near recent highs with a modest cyclical tilt. The S&P 500 proxy (SPY) is edging higher, the Dow proxy (DIA) is slightly positive, and small caps (IWM) are outperforming. The Nasdaq-100 proxy (QQQ) is modestly lower, reflecting a mixed tone in large-cap tech after a series of AI- and cloud-related headlines this week. Sector leadership is uneven: financials and technology are firmer, health care lags, and energy is little changed to slightly higher. In rates, long-duration Treasuries are softer and intermediate notes are down, consistent with a firmer yield backdrop. Commodities are mixed—crude oil is advancing, gold is up slightly, and silver is pulling back. Crypto is consolidating intraday after strength earlier in the week.
Macro backdrop: yields, inflation, and expectations
Treasury yields remain elevated relative to the front end, with the most recent available levels (dated 2025-12-02) showing 2-year at 3.51%, 5-year at 3.66%, 10-year at 4.09%, and 30-year at 4.74%. The curve is positive from 2s to 10s and out to 30s, implying a more normal term structure versus the intense inversions seen in past cycles. Today’s price action in bond ETFs—weakness in TLT (long duration), IEF (intermediate), and slight softness in SHY (short duration)—is consistent with a modest drift higher in yields through the morning session.
On inflation, the latest headline CPI index level (September 2025) stands at 324.368 and core CPI at 330.542 (index levels; not annualized rates). Market-based inflation expectations for November 2025 point to 5-year breakevens around 2.35%, 10-year around 2.27%, and 5y5y forward near 2.18%. Taken together, inflation pricing remains close to the Federal Reserve’s longer-run objective range, even as nominal yields are somewhat above those expectations—a combination that leaves a positive real-rate backdrop.
Recent economic news flow underscores a cross-current for the Fed. ADP data indicated private-sector job losses in November for the third time in four months, signaling a softening labor market that “the Fed will weigh” in its rate decision, according to reporting. At the same time, weekly jobless claims fell to a three-year low around the Thanksgiving period, reinforcing that layoffs remain limited even as hiring cools—what one report characterized as a “no-hire, no-fire” economy. The ISM services gauge pointed to ongoing expansion in November and easing inflation pressures, though “tariff uncertainty” reportedly weighed on sales and hiring plans. Equity traders, per one account, leaned into the “dovish” side of weaker private payrolls, using the data to firm up expectations for a quarter-point rate cut as soon as next week. While the policy outcome is for the Fed to decide, the day’s balanced market tone—steady equities and slightly softer long bonds—fits a narrative of slowing but still-growing activity and inflation near target.
Equities and sectors
- Broad indices: SPY last traded at 684.6585 versus a previous close of 683.89, up about 0.1% at midday. DIA is at 479.925 against a previous close of 479.41, also up roughly 0.1%. QQQ is slightly lower at 622.74 versus 623.52 previously, down about 0.1%. The standout is IWM, at 252.515 compared with 249.63, up roughly 1.2%, signaling small-cap strength.
- Sector dynamics: Among sector ETFs with quotes, XLF (financials) is up to 53.775 from 53.55 (about +0.4%), XLK (technology) is at 291.09 from 289.99 (+0.4%), XLE (energy) is essentially flat-to-slightly higher at 87.615 vs. 87.60, and XLV (health care) is underperforming at 154.185 vs. 155.08 (about -0.6%). The pattern—financials and tech firm, health care lagging, and energy near unchanged—is consistent with a cyclical tilt and a modest risk-on bias in smaller caps.
Company and theme highlights from the past 24 hours
- Software and AI: Salesforce touted “a powerful pipeline of future revenue,” and reporting described shares as zooming higher on AI momentum. A separate piece framed why investor sentiment toward the stock could improve if adoption and monetization of AI agents continue to progress. Snowflake posted an earnings beat but commentary flagged slowing product revenue growth and a high bar following meaningful year-to-date outperformance, explaining why shares struggled to lift post-print. Oracle sentiment has “quickly deteriorated” ahead of earnings, with some on the Street looking for clarity on financing needs. Microsoft drew divergent headlines—one account saw the OpenAI partnership as a strategic “safety net,” while another flagged pressure tied to AI sales execution and a resulting stock dip. Meta’s reported plan to cut metaverse spending by as much as 30% was characterized as easing investor concerns around AI spending and underpinning a rally.
- Semiconductors and infrastructure: Marvell rallied on what was described as an upbeat forecast and an acquisition announcement (a deal for Celestial AI) aimed at strengthening its positioning in AI-related networking. Another analyst note cited Applied Materials as a top pick to benefit from concurrent upcycles in DRAM and leading-edge foundry.
- Industrials and aerospace: Boeing shares surged by double digits in prior trading on CFO guidance that improved next year’s cash flow outlook, with follow-on commentary highlighting how that helped lead the broader market higher.
- Consumer and retail: Costco’s stock turned negative for the year following decelerating U.S. sales trends. Discount retailers showed bifurcation: Dollar General’s traffic gains and better-than-expected sales drew a positive market reaction; Dollar Tree also beat sales expectations as consumers sought bargains. Macy’s delivered a surprise profit and positive sales metric but saw the stock pull back as recent gains were digested.
- Media and deals: Netflix and Paramount were cited as favored bidders for Warner Bros. Discovery in a new round; reporting said investors “don’t like it,” with both stocks down more than 5% on the headlines. A separate piece noted that bids for WBD assets are in, and examined how various suitors might deploy them strategically.
- Airlines and travel: Delta estimated a $200 million hit from the government shutdown but guided to healthy travel demand into 2026, with one report noting that Wall Street seemed relieved by the magnitude of the impact.
Fixed income
Bond ETFs point to softer prices midday. TLT last traded at 88.655, below its prior close of 89.06 (down about 0.5%). IEF is 96.68 versus 96.97 (down roughly 0.3%). SHY is 82.805 from 82.86 (down about 0.1%). The move aligns with firm nominal yield levels, with the 10-year at 4.09% and the 30-year at 4.74% as of the latest available data. Against inflation expectations near 2.3%–2.4%, that implies positive real yields, a setup that often caps duration rallies unless growth fears intensify.
Commodities
- Precious metals: GLD is marginally higher at 387.365 versus 386.88 previously (about +0.1%). Silver is weaker, with SLV at 51.735 compared with 53.07 (-about 2.5%). Notably, reporting earlier highlighted silver reaching a record high on tight supply and rate-cut hopes, making today’s pullback a consolidation within a still-elevated backdrop.
- Energy: USO is firmer at 71.61 versus 70.66 (about +1.3%), while UNG is 15.54 versus 15.47 (about +0.5%). A separate analysis noted that OPEC+ increased quotas faster than expected this year despite lower crude prices, adding to global supply—a dynamic to watch if demand softens or if inventories build. Broad commodities via DBC are modestly higher at 23.21 versus 23.13 (about +0.3%).
FX and crypto
- FX: EURUSD quotes show the pair near 1.1656 at midday. With limited intraday context provided, directional conclusions are withheld; however, a firm U.S. real-rate profile remains a medium-term pillar for the dollar overall.
- Crypto: Bitcoin (BTCUSD) is near 92,448 on the mark price, down from an open of 93,381, with a session high of 93,681 and low of 91,787. Ether (ETHUSD) is around 3,159 versus a 3,193 open, with a 3,228 high and 3,137 low. Earlier coverage flagged Bitcoin reaching a two-week high even as market sentiment stayed fragile, and a separate strategy note posited potential upside if investors were to value Bitcoin similarly to gold. Today’s intraday cooling fits a consolidation narrative following that strength.
Context and positioning
Flows and leadership suggest investors are leaning into cyclical exposure (small caps, financials, and select tech) while trimming some defensives (health care). The rates picture—a modest bear bias at the long end—aligns with an economy that remains in expansion per services data, even as private hiring shows signs of fatigue. Equity traders appear focused on the prospect that a softer labor print could accelerate policy support, while credit and duration markets wait for clearer confirmation from incoming data and the Fed.
What to watch next
- Labor data and the Fed: With mixed signals from ADP and claims, attention will stay on the official labor report and the Fed’s upcoming meeting, given reporting that investors now lean toward a quarter-point cut as soon as next week.
- Yields vs. growth: If long-end yields continue to firm and real rates remain positive, high-duration assets (long Treasuries, long-duration growth equities) could face headwinds, even if headline inflation expectations are anchored.
- AI spending vs. monetization: Multiple headlines this week (Salesforce, Microsoft/OpenAI, Meta’s budget shift, Marvell’s acquisition) underscore the debate over capex intensity versus revenue realization. Stock-level dispersion inside tech may persist.
- Energy balances: With crude firming today and reports of rising OPEC+ supply quotas, subsequent inventory data and demand indicators will be critical for energy equities and broader commodity indices.
- Consumer demand mix: Discount retailer beats and traffic gains juxtaposed with decelerating trends at Costco point to an increasingly value-focused consumer—an ongoing theme into holiday and early 2026.
Risks
- Policy path uncertainty: A divergence between softening hiring and still-low layoffs complicates the policy outlook. A surprise from the Fed relative to market-implied odds could jolt duration and equities.
- Earnings execution in AI and software: High expectations leave little room for error; disappointments on AI monetization, cloud capacity, or salesforce productivity can spark rapid multiple compression.
- Geopolitics and trade: Headlines around tariffs, global supply, and geopolitical negotiations may affect services sentiment, capex, and commodity volatility.
- Liquidity and market plumbing: Reporting highlighted potential tightness in short-term funding markets; any stress could require policy response and may increase rate and credit volatility.
Bottom line
Midday trading shows a balanced risk stance: small caps lead, tech is mixed, and health care lags, while long-duration bonds soften and commodities diverge with oil up and silver down. Inflation expectations remain anchored near 2.2%–2.4%, nominal yields stay firm, and investors are weighing softer private hiring against resilient services activity and low layoffs. Into the afternoon, watch whether small-cap leadership persists, if tech breadth improves, and how long-end rates behave—key signals for whether the cyclical, higher-beta tilt into year-end can extend.
Overview
At midday, U.S. risk assets are holding near recent highs with a modest cyclical tilt. The S&P 500 proxy (SPY) is edging higher, the Dow proxy (DIA) is slightly positive, and small caps (IWM) are outperforming. The Nasdaq-100 proxy (QQQ) is modestly lower, reflecting a mixed tone in large-cap tech after a series of AI- and cloud-related headlines this week. Sector leadership is uneven: financials and technology are firmer, health care lags, and energy is little changed to slightly higher. In rates, long-duration Treasuries are softer and intermediate notes are down, consistent with a firmer yield backdrop. Commodities are mixed—crude oil is advancing, gold is up slightly, and silver is pulling back. Crypto is consolidating intraday after strength earlier in the week.
Macro backdrop: yields, inflation, and expectations
Treasury yields remain elevated relative to the front end, with the most recent available levels (dated 2025-12-02) showing 2-year at 3.51%, 5-year at 3.66%, 10-year at 4.09%, and 30-year at 4.74%. The curve is positive from 2s to 10s and out to 30s, implying a more normal term structure versus the intense inversions seen in past cycles. Today’s price action in bond ETFs—weakness in TLT (long duration), IEF (intermediate), and slight softness in SHY (short duration)—is consistent with a modest drift higher in yields through the morning session.
On inflation, the latest headline CPI index level (September 2025) stands at 324.368 and core CPI at 330.542 (index levels; not annualized rates). Market-based inflation expectations for November 2025 point to 5-year breakevens around 2.35%, 10-year around 2.27%, and 5y5y forward near 2.18%. Taken together, inflation pricing remains close to the Federal Reserve’s longer-run objective range, even as nominal yields are somewhat above those expectations—a combination that leaves a positive real-rate backdrop.
Recent economic news flow underscores a cross-current for the Fed. ADP data indicated private-sector job losses in November for the third time in four months, signaling a softening labor market that “the Fed will weigh” in its rate decision, according to reporting. At the same time, weekly jobless claims fell to a three-year low around the Thanksgiving period, reinforcing that layoffs remain limited even as hiring cools—what one report characterized as a “no-hire, no-fire” economy. The ISM services gauge pointed to ongoing expansion in November and easing inflation pressures, though “tariff uncertainty” reportedly weighed on sales and hiring plans. Equity traders, per one account, leaned into the “dovish” side of weaker private payrolls, using the data to firm up expectations for a quarter-point rate cut as soon as next week. While the policy outcome is for the Fed to decide, the day’s balanced market tone—steady equities and slightly softer long bonds—fits a narrative of slowing but still-growing activity and inflation near target.
Equities and sectors
- Broad indices: SPY last traded at 684.6585 versus a previous close of 683.89, up about 0.1% at midday. DIA is at 479.925 against a previous close of 479.41, also up roughly 0.1%. QQQ is slightly lower at 622.74 versus 623.52 previously, down about 0.1%. The standout is IWM, at 252.515 compared with 249.63, up roughly 1.2%, signaling small-cap strength.
- Sector dynamics: Among sector ETFs with quotes, XLF (financials) is up to 53.775 from 53.55 (about +0.4%), XLK (technology) is at 291.09 from 289.99 (+0.4%), XLE (energy) is essentially flat-to-slightly higher at 87.615 vs. 87.60, and XLV (health care) is underperforming at 154.185 vs. 155.08 (about -0.6%). The pattern—financials and tech firm, health care lagging, and energy near unchanged—is consistent with a cyclical tilt and a modest risk-on bias in smaller caps.
Company and theme highlights from the past 24 hours
- Software and AI: Salesforce touted “a powerful pipeline of future revenue,” and reporting described shares as zooming higher on AI momentum. A separate piece framed why investor sentiment toward the stock could improve if adoption and monetization of AI agents continue to progress. Snowflake posted an earnings beat but commentary flagged slowing product revenue growth and a high bar following meaningful year-to-date outperformance, explaining why shares struggled to lift post-print. Oracle sentiment has “quickly deteriorated” ahead of earnings, with some on the Street looking for clarity on financing needs. Microsoft drew divergent headlines—one account saw the OpenAI partnership as a strategic “safety net,” while another flagged pressure tied to AI sales execution and a resulting stock dip. Meta’s reported plan to cut metaverse spending by as much as 30% was characterized as easing investor concerns around AI spending and underpinning a rally.
- Semiconductors and infrastructure: Marvell rallied on what was described as an upbeat forecast and an acquisition announcement (a deal for Celestial AI) aimed at strengthening its positioning in AI-related networking. Another analyst note cited Applied Materials as a top pick to benefit from concurrent upcycles in DRAM and leading-edge foundry.
- Industrials and aerospace: Boeing shares surged by double digits in prior trading on CFO guidance that improved next year’s cash flow outlook, with follow-on commentary highlighting how that helped lead the broader market higher.
- Consumer and retail: Costco’s stock turned negative for the year following decelerating U.S. sales trends. Discount retailers showed bifurcation: Dollar General’s traffic gains and better-than-expected sales drew a positive market reaction; Dollar Tree also beat sales expectations as consumers sought bargains. Macy’s delivered a surprise profit and positive sales metric but saw the stock pull back as recent gains were digested.
- Media and deals: Netflix and Paramount were cited as favored bidders for Warner Bros. Discovery in a new round; reporting said investors “don’t like it,” with both stocks down more than 5% on the headlines. A separate piece noted that bids for WBD assets are in, and examined how various suitors might deploy them strategically.
- Airlines and travel: Delta estimated a $200 million hit from the government shutdown but guided to healthy travel demand into 2026, with one report noting that Wall Street seemed relieved by the magnitude of the impact.
Fixed income
Bond ETFs point to softer prices midday. TLT last traded at 88.655, below its prior close of 89.06 (down about 0.5%). IEF is 96.68 versus 96.97 (down roughly 0.3%). SHY is 82.805 from 82.86 (down about 0.1%). The move aligns with firm nominal yield levels, with the 10-year at 4.09% and the 30-year at 4.74% as of the latest available data. Against inflation expectations near 2.3%–2.4%, that implies positive real yields, a setup that often caps duration rallies unless growth fears intensify.
Commodities
- Precious metals: GLD is marginally higher at 387.365 versus 386.88 previously (about +0.1%). Silver is weaker, with SLV at 51.735 compared with 53.07 (-about 2.5%). Notably, reporting earlier highlighted silver reaching a record high on tight supply and rate-cut hopes, making today’s pullback a consolidation within a still-elevated backdrop.
- Energy: USO is firmer at 71.61 versus 70.66 (about +1.3%), while UNG is 15.54 versus 15.47 (about +0.5%). A separate analysis noted that OPEC+ increased quotas faster than expected this year despite lower crude prices, adding to global supply—a dynamic to watch if demand softens or if inventories build. Broad commodities via DBC are modestly higher at 23.21 versus 23.13 (about +0.3%).
FX and crypto
- FX: EURUSD quotes show the pair near 1.1656 at midday. With limited intraday context provided, directional conclusions are withheld; however, a firm U.S. real-rate profile remains a medium-term pillar for the dollar overall.
- Crypto: Bitcoin (BTCUSD) is near 92,448 on the mark price, down from an open of 93,381, with a session high of 93,681 and low of 91,787. Ether (ETHUSD) is around 3,159 versus a 3,193 open, with a 3,228 high and 3,137 low. Earlier coverage flagged Bitcoin reaching a two-week high even as market sentiment stayed fragile, and a separate strategy note posited potential upside if investors were to value Bitcoin similarly to gold. Today’s intraday cooling fits a consolidation narrative following that strength.
Context and positioning
Flows and leadership suggest investors are leaning into cyclical exposure (small caps, financials, and select tech) while trimming some defensives (health care). The rates picture—a modest bear bias at the long end—aligns with an economy that remains in expansion per services data, even as private hiring shows signs of fatigue. Equity traders appear focused on the prospect that a softer labor print could accelerate policy support, while credit and duration markets wait for clearer confirmation from incoming data and the Fed.
What to watch next
- Labor data and the Fed: With mixed signals from ADP and claims, attention will stay on the official labor report and the Fed’s upcoming meeting, given reporting that investors now lean toward a quarter-point cut as soon as next week.
- Yields vs. growth: If long-end yields continue to firm and real rates remain positive, high-duration assets (long Treasuries, long-duration growth equities) could face headwinds, even if headline inflation expectations are anchored.
- AI spending vs. monetization: Multiple headlines this week (Salesforce, Microsoft/OpenAI, Meta’s budget shift, Marvell’s acquisition) underscore the debate over capex intensity versus revenue realization. Stock-level dispersion inside tech may persist.
- Energy balances: With crude firming today and reports of rising OPEC+ supply quotas, subsequent inventory data and demand indicators will be critical for energy equities and broader commodity indices.
- Consumer demand mix: Discount retailer beats and traffic gains juxtaposed with decelerating trends at Costco point to an increasingly value-focused consumer—an ongoing theme into holiday and early 2026.
Risks
- Policy path uncertainty: A divergence between softening hiring and still-low layoffs complicates the policy outlook. A surprise from the Fed relative to market-implied odds could jolt duration and equities.
- Earnings execution in AI and software: High expectations leave little room for error; disappointments on AI monetization, cloud capacity, or salesforce productivity can spark rapid multiple compression.
- Geopolitics and trade: Headlines around tariffs, global supply, and geopolitical negotiations may affect services sentiment, capex, and commodity volatility.
- Liquidity and market plumbing: Reporting highlighted potential tightness in short-term funding markets; any stress could require policy response and may increase rate and credit volatility.
Bottom line
Midday trading shows a balanced risk stance: small caps lead, tech is mixed, and health care lags, while long-duration bonds soften and commodities diverge with oil up and silver down. Inflation expectations remain anchored near 2.2%–2.4%, nominal yields stay firm, and investors are weighing softer private hiring against resilient services activity and low layoffs. Into the afternoon, watch whether small-cap leadership persists, if tech breadth improves, and how long-end rates behave—key signals for whether the cyclical, higher-beta tilt into year-end can extend.