State of Market: Close 12/26/25
Mixed finish as year-end rally cools: Small caps lag, gold and silver extend surge, oil slips
Holiday-thin trading keeps the major averages near records while precious metals jump again; bonds are mixed and crypto eases into the weekend
TendieTensor.com State of Market Close
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Overview
U.S. markets ended the post-Christmas session mixed in quiet, holiday-thin trading, with the large-cap benchmarks holding near highs while small caps underperformed. The S&P 500 proxy SPY closed essentially flat-to-lower at 690.26 versus a previous close of 690.38, and the Nasdaq-100 tracker QQQ finished fractionally below its prior mark at 623.84 versus 623.93. The Dow proxy DIA edged up to 487.02 from 487.01, while the small-cap Russell 2000 ETF IWM lagged, closing at 251.40 versus 252.71. Beneath the surface, sector leadership was mixed: technology and health care posted modest gains, financials and energy faded slightly.
A persistent theme into year-end has been a seasonal “Santa Claus rally.” Market commentary highlighted that this year’s period is off to a solid start after two straight misses, with history suggesting a favorable bias through the first two sessions of the new year. At the same time, several pieces flagged that investor sentiment gauges remain subdued—with the VIX on track to finish the year near lows—implying some complacency that could leave markets sensitive to surprises.
Macro backdrop: rates, inflation, and expectations
Treasury yields remain anchored within recent ranges as the calendar winds down. As of December 22, the 2-year yield stood at 3.44%, the 5-year at 3.71%, the 10-year at 4.17%, and the 30-year at 4.84. The curve shape continues to convey a balance between disinflation progress and resilient growth. November’s inflation data show the headline CPI index level at 325.031 and core CPI at 331.068. Forward inflation expectations, based on December model estimates, continue to cluster around the Federal Reserve’s target zone beyond the near term: 1-year at 3.20%, 5-year at 2.42%, 10-year at 2.34%, and 30-year at 2.44%. Taken together, the inflation and expectations mix supports the case for rates to stabilize unless growth or commodity impulses shift materially.
Labor-market tone also supports the soft-landing narrative, with jobless claims recently trending lower than a year ago. Lower claims reinforce the “no recession now” backdrop that has underpinned equity resilience into year-end, and a decline in bond-market volatility has been cited as an additional green light for stocks. Still, multiple commentaries caution that subdued volatility and robust seasonal patterns do not eliminate risk—especially as positioning and liquidity often dominate the final trading days of the calendar year.
Equities and sectors
- SPY finished just a touch below its prior close (690.26 vs. 690.38), consolidating near record territory.
- QQQ also ended marginally lower at 623.84 vs. 623.93, consistent with a quiet session for mega-cap growth after a strong run.
- DIA ticked up to 487.02 from 487.01, essentially unchanged.
- IWM fell to 251.40 from 252.71, underperforming large caps and reflecting some year-end rebalancing and tax considerations often seen in smaller, more volatile names.
At the sector level, moves were narrow:
- XLK (technology) rose to 146.51 from 146.30, reflecting ongoing investor preference for AI-adjacent plays and software, even as some semis consolidate recent gains. Several articles noted fresh AI-related corporate developments, including Nvidia’s non-exclusive licensing deal with Groq and leadership additions, as well as expectations for further product cycles and data-center buildouts in 2026.
- XLV (health care) gained to 156.04 from 155.80, with interest sustained by pipeline and obesity-drug narratives; commentary highlighted Novo Nordisk’s progress with an oral weight-loss treatment and a relief rally for the stock.
- XLF (financials) eased to 55.61 from 55.73. With the 2-year and 10-year yields steady, financials have been range-bound; balance-sheet sensitivity to long rates and credit remains a consideration heading into 2026.
- XLE (energy) slipped modestly to 42.785 from 42.810, tracking the decline in oil prices on the day.
Individual company storylines remained active:
- Tesla drew attention on two fronts: its stock finishing the year on a strong note amid investor focus on robotaxi potential, and a separate report on fresh regulatory scrutiny regarding Model 3 doors. The net signaling is mixed—ongoing enthusiasm for autonomy offset by regulatory headline risk.
- Nvidia featured prominently in analyst and deal-flow coverage, including the Groq licensing agreement and expectations around 2026 catalysts tied to next-generation models and continued data-center buildouts. Strategists also pointed to Nvidia’s leadership as a bellwether for broader tech momentum.
- Nike continued to attract interest as Apple’s Tim Cook purchased additional shares following a selloff, while some houses reiterated positive medium-term views. That mixture of insider buying and cautious sentiment suggests potential for a base-building phase.
- Target reportedly received a lift after news of a significant investment from Toms Capital, a reminder that bottom-up catalysts can still matter in a tape dominated by macro narratives.
- ServiceNow expanded into cybersecurity for AI with an agreement to acquire Armis for $7.75 billion, aligning with a broader “AI control tower” vision; the strategic fit is clear, though near-term stock reactions to large deals can be mixed.
- AMC remained under pressure, with shares sliding to another record low amid financing updates and tepid box-office signals from a recent major release.
Bonds
The Treasury ETF complex was mixed. Long duration lagged, with TLT closing at 87.75 versus 88.03 previously, while the intermediate IEF edged up to 96.43 from 96.35 and the short-end SHY ticked higher to 82.81 from 82.73. The pattern is consistent with a curve that remains relatively stable at the front and intermediate segments, while long-end price action remains more sensitive to term-premium and supply considerations. With 10-year yields around 4.17% and 30-year near 4.84% (as of December 22), bonds remain a key cross-asset driver into early 2026.
Commodities
Precious metals extended their pre-holiday momentum:
- GLD advanced to 416.68 from 411.93, and SLV surged to 71.12 from 65.22. Commentary ranged from constructive medium-term calls to warnings that the pace of recent gains has become “unhinged,” suggesting near-term froth. Another piece highlighted that year-end tax dynamics can create a seller’s market for appreciated assets like gold and silver—an additional reminder to expect volatility into the final sessions of 2025.
Energy commodities diverged:
- USO fell to 68.47 from 70.20, while UNG rose to 12.80 from 12.39. Geopolitical headlines—such as reported drone strikes on Russia’s largest gas processing facility—underscore the potential for supply-side shocks. Even so, today’s price action reflected softer oil and firmer gas, a combination that contributed to a modest dip in energy equities.
Broad commodities, as captured by DBC, firmed to 22.70 from 22.63, in line with strength in metals despite weaker crude.
FX and crypto
In foreign exchange, EURUSD was little changed, trading near 1.1772 with an intraday range between roughly 1.1760 and 1.1787 and close to its opening level. Separate technical commentary suggested the U.S. dollar may be carving out a base into early 2026, but today’s session did not deliver a decisive move.
Crypto softened into the close. Bitcoin marked around 87,549 versus an open near 88,901, and Ethereum traded near 2,930 versus an open around 2,969. The day’s drift lower aligns with broader year-end consolidation noted in coverage, despite a 2025 that delivered key regulatory and product milestones for the industry.
Sentiment, seasonals, and positioning
Market color emphasized that the Santa Claus window has started on a constructive footing and that breadth remains adequate, though narrower than earlier in the quarter. A decline in bond-market volatility was flagged as supportive, while a persistently low VIX points to investor confidence that could flip into fragility if surprises emerge. Meanwhile, stronger-than-expected Q3 GDP growth reported earlier this week served as a reminder that the real economy retains forward momentum—even if growth is expected to moderate in the current quarter.
Notable company and theme highlights from the news flow
- AI and chips: Nvidia’s licensing arrangement with Groq and leadership hires, plus analyst previews for 2026, reinforced the secular AI demand story. Coverage suggested Nvidia’s stock leadership remains a broader market tell.
- Autonomy and EVs: Tesla remains a lightning rod, with a tug-of-war between robotaxi optimism and regulatory scrutiny.
- Consumer: Target reportedly attracted a significant investment; Nike saw insider buying by Tim Cook following a slump. Both stories speak to selective value hunting in consumer-discretionary names.
- Cyber for AI: ServiceNow’s $7.75 billion Armis deal ties security more tightly to enterprise AI workflows.
- Entertainment and theaters: AMC extended losses amid financing actions and softer-than-hoped box-office signals.
- Health care/obesity drugs: Novo Nordisk’s oral weight-loss therapy headlines contributed to a firmer tone in health care.
- Macro/geopolitics: Reports of drone strikes on a major Russian gas facility highlight ongoing energy-security risks that can quickly shift commodity pricing.
Outlook
With just a handful of trading days left in 2025, attention turns to:
- Whether the Santa Claus rally persists through the first two sessions of 2026; breadth and participation will be key.
- Bond-market stability. With the 10-year around 4.17% and inflation expectations anchored near 2.3%–2.4% beyond the short term, a steady rates backdrop would be supportive for equities—especially duration-sensitive growth.
- Metals momentum. The powerful run in gold and silver invites two-way volatility into year-end; watch for tax-related selling, profit-taking, and liquidity effects.
- Energy and geopolitics. Oil’s slide today contrasted with gas strength; supply headlines can still jolt prices and the energy-equity complex.
- Crypto tone. Post-holiday flows may test support levels; regulatory and policy discussions are expected to remain central in 2026, even after a milestone-filled 2025.
Risks
- Liquidity and positioning. Thin year-end conditions can amplify moves; low VIX and compressed bond volatility may mask underlying fragility.
- Policy and regulation. Ongoing scrutiny of autonomous driving, AI spending priorities, and digital-asset frameworks could alter sentiment for key leadership groups.
- Geopolitical shocks. Energy infrastructure and transport disruptions can feed quickly into commodities and inflation expectations.
- Valuation and concentration. Leadership remains narrow in places; any disappointment in AI or mega-cap earnings could have outsized index impacts.
- Tax and technical flows. Late-December/early-January rebalancing, tax-gain harvesting, and fund distribution dynamics can create short-term dislocations.
Bottom line
Stocks ended mixed, with major indexes holding near highs, small caps trailing, and metals extending a notable run. Bonds were steady to mixed, FX was largely unchanged, and crypto eased. The macro signals—contained yields, stable inflation expectations, and low volatility—remain supportive into the final stretch of the year. But tight liquidity, frothy areas in metals, and policy/geopolitical headlines argue for disciplined risk management as the calendar turns to 2026.
Overview
U.S. markets ended the post-Christmas session mixed in quiet, holiday-thin trading, with the large-cap benchmarks holding near highs while small caps underperformed. The S&P 500 proxy SPY closed essentially flat-to-lower at 690.26 versus a previous close of 690.38, and the Nasdaq-100 tracker QQQ finished fractionally below its prior mark at 623.84 versus 623.93. The Dow proxy DIA edged up to 487.02 from 487.01, while the small-cap Russell 2000 ETF IWM lagged, closing at 251.40 versus 252.71. Beneath the surface, sector leadership was mixed: technology and health care posted modest gains, financials and energy faded slightly.
A persistent theme into year-end has been a seasonal “Santa Claus rally.” Market commentary highlighted that this year’s period is off to a solid start after two straight misses, with history suggesting a favorable bias through the first two sessions of the new year. At the same time, several pieces flagged that investor sentiment gauges remain subdued—with the VIX on track to finish the year near lows—implying some complacency that could leave markets sensitive to surprises.
Macro backdrop: rates, inflation, and expectations
Treasury yields remain anchored within recent ranges as the calendar winds down. As of December 22, the 2-year yield stood at 3.44%, the 5-year at 3.71%, the 10-year at 4.17%, and the 30-year at 4.84. The curve shape continues to convey a balance between disinflation progress and resilient growth. November’s inflation data show the headline CPI index level at 325.031 and core CPI at 331.068. Forward inflation expectations, based on December model estimates, continue to cluster around the Federal Reserve’s target zone beyond the near term: 1-year at 3.20%, 5-year at 2.42%, 10-year at 2.34%, and 30-year at 2.44%. Taken together, the inflation and expectations mix supports the case for rates to stabilize unless growth or commodity impulses shift materially.
Labor-market tone also supports the soft-landing narrative, with jobless claims recently trending lower than a year ago. Lower claims reinforce the “no recession now” backdrop that has underpinned equity resilience into year-end, and a decline in bond-market volatility has been cited as an additional green light for stocks. Still, multiple commentaries caution that subdued volatility and robust seasonal patterns do not eliminate risk—especially as positioning and liquidity often dominate the final trading days of the calendar year.
Equities and sectors
- SPY finished just a touch below its prior close (690.26 vs. 690.38), consolidating near record territory.
- QQQ also ended marginally lower at 623.84 vs. 623.93, consistent with a quiet session for mega-cap growth after a strong run.
- DIA ticked up to 487.02 from 487.01, essentially unchanged.
- IWM fell to 251.40 from 252.71, underperforming large caps and reflecting some year-end rebalancing and tax considerations often seen in smaller, more volatile names.
At the sector level, moves were narrow:
- XLK (technology) rose to 146.51 from 146.30, reflecting ongoing investor preference for AI-adjacent plays and software, even as some semis consolidate recent gains. Several articles noted fresh AI-related corporate developments, including Nvidia’s non-exclusive licensing deal with Groq and leadership additions, as well as expectations for further product cycles and data-center buildouts in 2026.
- XLV (health care) gained to 156.04 from 155.80, with interest sustained by pipeline and obesity-drug narratives; commentary highlighted Novo Nordisk’s progress with an oral weight-loss treatment and a relief rally for the stock.
- XLF (financials) eased to 55.61 from 55.73. With the 2-year and 10-year yields steady, financials have been range-bound; balance-sheet sensitivity to long rates and credit remains a consideration heading into 2026.
- XLE (energy) slipped modestly to 42.785 from 42.810, tracking the decline in oil prices on the day.
Individual company storylines remained active:
- Tesla drew attention on two fronts: its stock finishing the year on a strong note amid investor focus on robotaxi potential, and a separate report on fresh regulatory scrutiny regarding Model 3 doors. The net signaling is mixed—ongoing enthusiasm for autonomy offset by regulatory headline risk.
- Nvidia featured prominently in analyst and deal-flow coverage, including the Groq licensing agreement and expectations around 2026 catalysts tied to next-generation models and continued data-center buildouts. Strategists also pointed to Nvidia’s leadership as a bellwether for broader tech momentum.
- Nike continued to attract interest as Apple’s Tim Cook purchased additional shares following a selloff, while some houses reiterated positive medium-term views. That mixture of insider buying and cautious sentiment suggests potential for a base-building phase.
- Target reportedly received a lift after news of a significant investment from Toms Capital, a reminder that bottom-up catalysts can still matter in a tape dominated by macro narratives.
- ServiceNow expanded into cybersecurity for AI with an agreement to acquire Armis for $7.75 billion, aligning with a broader “AI control tower” vision; the strategic fit is clear, though near-term stock reactions to large deals can be mixed.
- AMC remained under pressure, with shares sliding to another record low amid financing updates and tepid box-office signals from a recent major release.
Bonds
The Treasury ETF complex was mixed. Long duration lagged, with TLT closing at 87.75 versus 88.03 previously, while the intermediate IEF edged up to 96.43 from 96.35 and the short-end SHY ticked higher to 82.81 from 82.73. The pattern is consistent with a curve that remains relatively stable at the front and intermediate segments, while long-end price action remains more sensitive to term-premium and supply considerations. With 10-year yields around 4.17% and 30-year near 4.84% (as of December 22), bonds remain a key cross-asset driver into early 2026.
Commodities
Precious metals extended their pre-holiday momentum:
- GLD advanced to 416.68 from 411.93, and SLV surged to 71.12 from 65.22. Commentary ranged from constructive medium-term calls to warnings that the pace of recent gains has become “unhinged,” suggesting near-term froth. Another piece highlighted that year-end tax dynamics can create a seller’s market for appreciated assets like gold and silver—an additional reminder to expect volatility into the final sessions of 2025.
Energy commodities diverged:
- USO fell to 68.47 from 70.20, while UNG rose to 12.80 from 12.39. Geopolitical headlines—such as reported drone strikes on Russia’s largest gas processing facility—underscore the potential for supply-side shocks. Even so, today’s price action reflected softer oil and firmer gas, a combination that contributed to a modest dip in energy equities.
Broad commodities, as captured by DBC, firmed to 22.70 from 22.63, in line with strength in metals despite weaker crude.
FX and crypto
In foreign exchange, EURUSD was little changed, trading near 1.1772 with an intraday range between roughly 1.1760 and 1.1787 and close to its opening level. Separate technical commentary suggested the U.S. dollar may be carving out a base into early 2026, but today’s session did not deliver a decisive move.
Crypto softened into the close. Bitcoin marked around 87,549 versus an open near 88,901, and Ethereum traded near 2,930 versus an open around 2,969. The day’s drift lower aligns with broader year-end consolidation noted in coverage, despite a 2025 that delivered key regulatory and product milestones for the industry.
Sentiment, seasonals, and positioning
Market color emphasized that the Santa Claus window has started on a constructive footing and that breadth remains adequate, though narrower than earlier in the quarter. A decline in bond-market volatility was flagged as supportive, while a persistently low VIX points to investor confidence that could flip into fragility if surprises emerge. Meanwhile, stronger-than-expected Q3 GDP growth reported earlier this week served as a reminder that the real economy retains forward momentum—even if growth is expected to moderate in the current quarter.
Notable company and theme highlights from the news flow
- AI and chips: Nvidia’s licensing arrangement with Groq and leadership hires, plus analyst previews for 2026, reinforced the secular AI demand story. Coverage suggested Nvidia’s stock leadership remains a broader market tell.
- Autonomy and EVs: Tesla remains a lightning rod, with a tug-of-war between robotaxi optimism and regulatory scrutiny.
- Consumer: Target reportedly attracted a significant investment; Nike saw insider buying by Tim Cook following a slump. Both stories speak to selective value hunting in consumer-discretionary names.
- Cyber for AI: ServiceNow’s $7.75 billion Armis deal ties security more tightly to enterprise AI workflows.
- Entertainment and theaters: AMC extended losses amid financing actions and softer-than-hoped box-office signals.
- Health care/obesity drugs: Novo Nordisk’s oral weight-loss therapy headlines contributed to a firmer tone in health care.
- Macro/geopolitics: Reports of drone strikes on a major Russian gas facility highlight ongoing energy-security risks that can quickly shift commodity pricing.
Outlook
With just a handful of trading days left in 2025, attention turns to:
- Whether the Santa Claus rally persists through the first two sessions of 2026; breadth and participation will be key.
- Bond-market stability. With the 10-year around 4.17% and inflation expectations anchored near 2.3%–2.4% beyond the short term, a steady rates backdrop would be supportive for equities—especially duration-sensitive growth.
- Metals momentum. The powerful run in gold and silver invites two-way volatility into year-end; watch for tax-related selling, profit-taking, and liquidity effects.
- Energy and geopolitics. Oil’s slide today contrasted with gas strength; supply headlines can still jolt prices and the energy-equity complex.
- Crypto tone. Post-holiday flows may test support levels; regulatory and policy discussions are expected to remain central in 2026, even after a milestone-filled 2025.
Risks
- Liquidity and positioning. Thin year-end conditions can amplify moves; low VIX and compressed bond volatility may mask underlying fragility.
- Policy and regulation. Ongoing scrutiny of autonomous driving, AI spending priorities, and digital-asset frameworks could alter sentiment for key leadership groups.
- Geopolitical shocks. Energy infrastructure and transport disruptions can feed quickly into commodities and inflation expectations.
- Valuation and concentration. Leadership remains narrow in places; any disappointment in AI or mega-cap earnings could have outsized index impacts.
- Tax and technical flows. Late-December/early-January rebalancing, tax-gain harvesting, and fund distribution dynamics can create short-term dislocations.
Bottom line
Stocks ended mixed, with major indexes holding near highs, small caps trailing, and metals extending a notable run. Bonds were steady to mixed, FX was largely unchanged, and crypto eased. The macro signals—contained yields, stable inflation expectations, and low volatility—remain supportive into the final stretch of the year. But tight liquidity, frothy areas in metals, and policy/geopolitical headlines argue for disciplined risk management as the calendar turns to 2026.