State of Market: Open 01/20/26
Risk-off open as tariff fears hit equities; dollar weakens and gold surges while bonds slip
Stocks fall 1.4%–1.7% at the bell, GLD jumps about 3.6% and UNG spikes near 20% amid ‘Sell America’ headlines and a cold-weather energy shock. Treasury prices soften as the long end remains above 4.7%.
TendieTensor.com State of Market Open
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Markets opened decisively risk-off on Tuesday as escalating U.S.–Europe trade tensions and a renewed flight to hard assets set the tone. Broad U.S. equity ETFs are lower out of the gate, led by growth and small caps, while gold, silver, oil, and especially natural gas trade higher. Treasuries are softer, the dollar is weaker against the euro, and crypto is easing, reinforcing a morning marked by defensive positioning and macro uncertainty.
A cluster of overnight and early-morning headlines framed the move. Coverage characterized a global “Sell America” impulse, with the U.S. dollar and Treasury prices under pressure and gold spiking as investors reassessed U.S.–Europe trade risks and policy uncertainty. Concurrently, reports that the European Union is preparing potential retaliation against proposed U.S. tariffs added to the cross-Atlantic tension. On the micro side, deal activity and sector news were plentiful—Netflix sweetened its proposed transaction for Warner Bros. Discovery to all cash, GSK announced a $2.2 billion deal targeting a food allergy therapy, and Amazon’s CEO flagged that tariff costs are creeping into consumer prices. Each of these items intersect with today’s macro: protectionist trade dynamics, policy-sensitive inflation, and investors’ apparent preference for tangible assets over long-duration growth claims.
Macro backdrop: yields, inflation, and expectations
Treasury yields coming into the session (latest available: Jan 15) show a still-elevated long end: 2-year at 3.56%, 5-year at 3.77%, 10-year at 4.17%, and 30-year at 4.79%. The curve remains upward sloping beyond the 5-year point, with a notable premium at the 30-year, consistent with term-risk and fiscal/inflation uncertainty still embedded at the long end. Early trading in bond ETFs indicates additional price pressure this morning, in line with reporting that Treasury prices are falling.
On inflation, the most recent CPI index levels (Dec 2025) stand at 326.03 for headline and 331.86 for core. While index levels alone don’t indicate the current pace, market-based and model-based expectations offer clearer guidance: January inflation expectations are clustered near the low- to mid-2% range across horizons—about 2.60% at the 1-year, 2.33% at 5-year, 2.32% at 10-year, and 2.45% at 30-year. That anchoring contrasts with corporate commentary pointing to incremental price pressures from tariffs and supply channels. Amazon’s Andy Jassy noted tariff effects are beginning to “creep” into prices as pre-bought inventory runs down—a reminder that trade policy can transmit to consumer inflation with lags. Market narratives this morning also emphasize concern that new tariffs and geopolitical frictions could complicate the Fed’s disinflation path, even as medium-term expectations remain broadly anchored.
Equities and sectors: broad selloff at the open
- SPY last traded near 681.97 versus a previous close of 691.66, down about 1.40% at the open.
- QQQ last 610.81 versus 621.26 prior close, down roughly 1.68%, underperforming as investors trim long-duration tech exposure.
- DIA last 486.55 versus 493.42 prior close, down about 1.39%.
- IWM last 261.25 versus 265.76 prior close, down around 1.70%, pointing to more acute pressure on economically sensitive small caps.
The leadership profile is consistent with a risk-off tape tied to external shocks: small caps and growth heavier, defensives holding up relatively better but still down. Sector proxies confirm the pattern:
- XLK (technology) last 143.27 versus 145.62, down approximately 1.62%.
- XLF (financials) last 53.59 versus 54.44, off about 1.56% as curve dynamics and macro uncertainty weigh on financials’ earnings visibility.
- XLV (health care) last 154.08 versus 155.74, down around 1.07%, outperforming broader risk but still lower.
Against this backdrop, deal and company-specific headlines are cutting through in pockets:
- Media: Netflix amended its bid for Warner Bros. Discovery to an all-cash offer, addressing concerns about stock consideration. While we do not have real-time quotes for NFLX or WBD here, the headline underscores a continued consolidation narrative in media/streaming and could be a focal point for the sector as investors evaluate leverage, debt markets, and regulatory risk in a more volatile macro environment.
- Health care: GSK’s announced $2.2 billion deal targeting a once-per-three-month food allergy drug extends a theme of drugmakers leaning into specialty pipelines. The sector’s relative resilience this morning fits with the perception of health care as a defensive growth area that can weather macro crosswinds.
- Industrials: 3M’s latest report beat earnings expectations with an in-line outlook, but early commentary notes the stock slipping anyway, overshadowed by the broader selloff. That dynamic—good news failing to lift cyclicals in risk-off conditions—is emblematic of today’s open.
Bonds: prices slip, long end still elevated
Treasury proxies are under pressure:
- TLT last 86.62 versus 87.80 prior close, down roughly 1.35%.
- IEF last 95.60 versus 95.93, down about 0.35%.
- SHY last 82.81 versus 82.79, essentially flat to slightly higher (+0.02%).
The weakness in TLT and IEF corroborates reporting that Treasury prices are falling as investors digest tariff risks and the potential for stickier inflation. With the 10-year near 4.17% and the 30-year around 4.79% (latest published levels), the long end’s premium continues to pressure duration-heavy exposures. Short-duration (SHY) remains broadly stable, reflecting a more anchored view of near-term policy rates versus term risk further out the curve.
Commodities: metals bid, energy surges—especially natural gas
Inflation-hedge and scarcity themes are prominent at the open:
- GLD last 436.52 versus 421.29 prior close, up about 3.62%.
- SLV last 86.08 versus 81.02, up roughly 6.25%.
Gold’s surge aligns with this morning’s “Sell America” framing and headlines calling out fresh highs in the metal. Sentiment toward precious metals is also reflected in commentary from market strategists re-allocating from crypto to gold due to perceived technology risks, adding to the momentum.
Energy is firm:
- USO last 72.84 versus 71.65, up about 1.66%.
- UNG last 12.34 versus 10.33, up approximately 19.46%.
The outsized move in UNG tracks closely with early reports that natural gas futures are jumping around 20% on a bitter cold stretch expected in the Northeastern U.S. That weather-driven shock tightens the near-term balance and, together with the metals rally, feeds the morning’s broader inflation narrative. Broad commodities (DBC) have not printed a new trade yet today relative to Friday’s last, so we refrain from characterizing today’s move in that basket.
FX and crypto: softer dollar, crypto edges lower
FX: EURUSD marks near 1.1724. While we lack a direct day-over-day comparison in the quotes, the pair’s level is consistent with coverage noting U.S. dollar weakness tied to tariff headlines and a shift toward non-dollar stores of value.
Crypto: Bitcoin (BTCUSD) and Ethereum (ETHUSD) are modestly lower versus their quoted opens.
- BTCUSD marks around 90,925 versus an open near 92,005, off roughly 1.2% on this feed, within an intraday range that includes a high near 92,018 and a low around 90,542.
- ETHUSD marks around 3,070 versus an open near 3,171, down about 3.2%, range roughly 3,053–3,173.
Notably, recent commentary highlighted a rotation by a long-standing bitcoin bull into gold, citing technology risks to crypto. While single-voice shifts don’t set trend by themselves, today’s tape—metals strong, crypto softer—rhymes with that narrative.
Policy and geopolitics: tariffs front and center
The session’s dominant macro input remains trade policy. Reports indicate the EU is weighing tariffs on roughly €93 billion of U.S. goods should the U.S. follow through with a proposed 10% levy targeting European countries tied to the Greenland dispute. U.S. futures were already lower over the holiday weekend on this risk, and the cash open reflects a continuation of that trend.
Inflation policy signaling is in the mix as well. Fed Chair Jerome Powell’s attendance at a Supreme Court hearing concerning Governor Lisa Cook’s firing emphasizes internal Fed cohesion in a period when central bank independence has become a market point of discussion. Meanwhile, investor commentary suggests growing “whispers” about upside inflation risks in 2026—driven by geopolitics, metals price strength, and policy uncertainty—even as model-based inflation expectations remain anchored near the mid-2s across horizons.
Corporate and sector developments to watch
- E-commerce/retail: Amazon’s CEO Andy Jassy said tariff-related costs are starting to seep into prices as earlier stockpiles run down. That’s a concrete channel by which trade policy can impact consumer inflation and discretionary demand.
- Media/streaming: Netflix’s decision to make its bid for Warner Bros. Discovery all cash addresses one of the prior objections to its offer. Attention will turn to financing mix, regulatory review, and earnings outlooks as investors gauge the strategic logic and capital intensity.
- Health care: GSK’s $2.2 billion acquisition targeting a food allergy drug highlights continued deal-making in defensible, innovation-driven niches. Given XLV’s relative resilience this morning, health care remains a candidate for defensive allocation if macro volatility persists.
- Industrials: 3M’s solid report not lifting the stock underscores that macro currents can supersede micro beats during risk-off phases.
State of play
At the open, the cross-asset message is clear: (1) equities are de-risking, with growth and small caps leading to the downside; (2) long-duration Treasuries are under pressure; (3) gold and silver are bid as inflation hedges and alternative stores of value; (4) energy is firm, with natural gas spiking on weather; (5) the dollar is softer, and crypto is mildly weaker. The proximate catalysts—tariff threats and prospective EU retaliation—compound existing concerns about policy uncertainty and inflation stickiness, even as baseline inflation expectations remain anchored. In this environment, investors appear to be prioritizing liquidity and real assets over duration and cyclicality.
Outlook: what to watch next
- U.S.–EU tariff trajectory: Any concrete steps toward or away from a Feb. 1 implementation of new U.S. tariffs—and the EU’s response—will set the tone for risk assets.
- Earnings calendar: Focus on bellwethers flagged for this week—including Netflix, Intel, Capital One, and McCormick—for read-throughs on consumer demand, AI/data-center spending, credit quality, and pricing power.
- Energy/weather: The magnitude and duration of the Northeastern cold snap will matter for the sustainability of today’s natural gas spike and potential downstream effects on power prices.
- Fed optics and policy communication: Chair Powell’s visibility around institutional developments could influence perceptions of central bank independence. Markets will parse any remarks for implications on the reaction function.
- Metals and the dollar: Whether today’s gold and silver strength persists—and how EURUSD trades—will be a useful barometer of ongoing “Sell America” positioning.
Risks
- Escalation of the U.S.–EU trade dispute triggering a tit-for-tat tariff cycle that undermines growth and complicates the inflation outlook.
- Energy-price shocks from severe weather that filter into broader inflation and squeeze margins, especially for energy-intensive industries.
- Higher-for-longer long-end yields if fiscal and term premia remain elevated, pressuring duration-sensitive equities and credit.
- Policy and regulatory uncertainty—across trade, tech, and central bank governance—dampening risk appetite and capex.
- Liquidity strains or volatility spikes in crypto that bleed into broader risk sentiment.
Bottom line: The opening tape reflects a classic risk-off reaction to trade-policy risk and inflation-hedge buying. With equities lower, long-duration bonds softer, precious metals and energy firmer, and the dollar weaker, investors are hedging against policy shocks and potential inflation persistence. Earnings and policy headlines over the next several sessions will determine whether today’s moves mark a transient shock or the start of a broader de-risking phase.
Markets opened decisively risk-off on Tuesday as escalating U.S.–Europe trade tensions and a renewed flight to hard assets set the tone. Broad U.S. equity ETFs are lower out of the gate, led by growth and small caps, while gold, silver, oil, and especially natural gas trade higher. Treasuries are softer, the dollar is weaker against the euro, and crypto is easing, reinforcing a morning marked by defensive positioning and macro uncertainty.
A cluster of overnight and early-morning headlines framed the move. Coverage characterized a global “Sell America” impulse, with the U.S. dollar and Treasury prices under pressure and gold spiking as investors reassessed U.S.–Europe trade risks and policy uncertainty. Concurrently, reports that the European Union is preparing potential retaliation against proposed U.S. tariffs added to the cross-Atlantic tension. On the micro side, deal activity and sector news were plentiful—Netflix sweetened its proposed transaction for Warner Bros. Discovery to all cash, GSK announced a $2.2 billion deal targeting a food allergy therapy, and Amazon’s CEO flagged that tariff costs are creeping into consumer prices. Each of these items intersect with today’s macro: protectionist trade dynamics, policy-sensitive inflation, and investors’ apparent preference for tangible assets over long-duration growth claims.
Macro backdrop: yields, inflation, and expectations
Treasury yields coming into the session (latest available: Jan 15) show a still-elevated long end: 2-year at 3.56%, 5-year at 3.77%, 10-year at 4.17%, and 30-year at 4.79%. The curve remains upward sloping beyond the 5-year point, with a notable premium at the 30-year, consistent with term-risk and fiscal/inflation uncertainty still embedded at the long end. Early trading in bond ETFs indicates additional price pressure this morning, in line with reporting that Treasury prices are falling.
On inflation, the most recent CPI index levels (Dec 2025) stand at 326.03 for headline and 331.86 for core. While index levels alone don’t indicate the current pace, market-based and model-based expectations offer clearer guidance: January inflation expectations are clustered near the low- to mid-2% range across horizons—about 2.60% at the 1-year, 2.33% at 5-year, 2.32% at 10-year, and 2.45% at 30-year. That anchoring contrasts with corporate commentary pointing to incremental price pressures from tariffs and supply channels. Amazon’s Andy Jassy noted tariff effects are beginning to “creep” into prices as pre-bought inventory runs down—a reminder that trade policy can transmit to consumer inflation with lags. Market narratives this morning also emphasize concern that new tariffs and geopolitical frictions could complicate the Fed’s disinflation path, even as medium-term expectations remain broadly anchored.
Equities and sectors: broad selloff at the open
- SPY last traded near 681.97 versus a previous close of 691.66, down about 1.40% at the open.
- QQQ last 610.81 versus 621.26 prior close, down roughly 1.68%, underperforming as investors trim long-duration tech exposure.
- DIA last 486.55 versus 493.42 prior close, down about 1.39%.
- IWM last 261.25 versus 265.76 prior close, down around 1.70%, pointing to more acute pressure on economically sensitive small caps.
The leadership profile is consistent with a risk-off tape tied to external shocks: small caps and growth heavier, defensives holding up relatively better but still down. Sector proxies confirm the pattern:
- XLK (technology) last 143.27 versus 145.62, down approximately 1.62%.
- XLF (financials) last 53.59 versus 54.44, off about 1.56% as curve dynamics and macro uncertainty weigh on financials’ earnings visibility.
- XLV (health care) last 154.08 versus 155.74, down around 1.07%, outperforming broader risk but still lower.
Against this backdrop, deal and company-specific headlines are cutting through in pockets:
- Media: Netflix amended its bid for Warner Bros. Discovery to an all-cash offer, addressing concerns about stock consideration. While we do not have real-time quotes for NFLX or WBD here, the headline underscores a continued consolidation narrative in media/streaming and could be a focal point for the sector as investors evaluate leverage, debt markets, and regulatory risk in a more volatile macro environment.
- Health care: GSK’s announced $2.2 billion deal targeting a once-per-three-month food allergy drug extends a theme of drugmakers leaning into specialty pipelines. The sector’s relative resilience this morning fits with the perception of health care as a defensive growth area that can weather macro crosswinds.
- Industrials: 3M’s latest report beat earnings expectations with an in-line outlook, but early commentary notes the stock slipping anyway, overshadowed by the broader selloff. That dynamic—good news failing to lift cyclicals in risk-off conditions—is emblematic of today’s open.
Bonds: prices slip, long end still elevated
Treasury proxies are under pressure:
- TLT last 86.62 versus 87.80 prior close, down roughly 1.35%.
- IEF last 95.60 versus 95.93, down about 0.35%.
- SHY last 82.81 versus 82.79, essentially flat to slightly higher (+0.02%).
The weakness in TLT and IEF corroborates reporting that Treasury prices are falling as investors digest tariff risks and the potential for stickier inflation. With the 10-year near 4.17% and the 30-year around 4.79% (latest published levels), the long end’s premium continues to pressure duration-heavy exposures. Short-duration (SHY) remains broadly stable, reflecting a more anchored view of near-term policy rates versus term risk further out the curve.
Commodities: metals bid, energy surges—especially natural gas
Inflation-hedge and scarcity themes are prominent at the open:
- GLD last 436.52 versus 421.29 prior close, up about 3.62%.
- SLV last 86.08 versus 81.02, up roughly 6.25%.
Gold’s surge aligns with this morning’s “Sell America” framing and headlines calling out fresh highs in the metal. Sentiment toward precious metals is also reflected in commentary from market strategists re-allocating from crypto to gold due to perceived technology risks, adding to the momentum.
Energy is firm:
- USO last 72.84 versus 71.65, up about 1.66%.
- UNG last 12.34 versus 10.33, up approximately 19.46%.
The outsized move in UNG tracks closely with early reports that natural gas futures are jumping around 20% on a bitter cold stretch expected in the Northeastern U.S. That weather-driven shock tightens the near-term balance and, together with the metals rally, feeds the morning’s broader inflation narrative. Broad commodities (DBC) have not printed a new trade yet today relative to Friday’s last, so we refrain from characterizing today’s move in that basket.
FX and crypto: softer dollar, crypto edges lower
FX: EURUSD marks near 1.1724. While we lack a direct day-over-day comparison in the quotes, the pair’s level is consistent with coverage noting U.S. dollar weakness tied to tariff headlines and a shift toward non-dollar stores of value.
Crypto: Bitcoin (BTCUSD) and Ethereum (ETHUSD) are modestly lower versus their quoted opens.
- BTCUSD marks around 90,925 versus an open near 92,005, off roughly 1.2% on this feed, within an intraday range that includes a high near 92,018 and a low around 90,542.
- ETHUSD marks around 3,070 versus an open near 3,171, down about 3.2%, range roughly 3,053–3,173.
Notably, recent commentary highlighted a rotation by a long-standing bitcoin bull into gold, citing technology risks to crypto. While single-voice shifts don’t set trend by themselves, today’s tape—metals strong, crypto softer—rhymes with that narrative.
Policy and geopolitics: tariffs front and center
The session’s dominant macro input remains trade policy. Reports indicate the EU is weighing tariffs on roughly €93 billion of U.S. goods should the U.S. follow through with a proposed 10% levy targeting European countries tied to the Greenland dispute. U.S. futures were already lower over the holiday weekend on this risk, and the cash open reflects a continuation of that trend.
Inflation policy signaling is in the mix as well. Fed Chair Jerome Powell’s attendance at a Supreme Court hearing concerning Governor Lisa Cook’s firing emphasizes internal Fed cohesion in a period when central bank independence has become a market point of discussion. Meanwhile, investor commentary suggests growing “whispers” about upside inflation risks in 2026—driven by geopolitics, metals price strength, and policy uncertainty—even as model-based inflation expectations remain anchored near the mid-2s across horizons.
Corporate and sector developments to watch
- E-commerce/retail: Amazon’s CEO Andy Jassy said tariff-related costs are starting to seep into prices as earlier stockpiles run down. That’s a concrete channel by which trade policy can impact consumer inflation and discretionary demand.
- Media/streaming: Netflix’s decision to make its bid for Warner Bros. Discovery all cash addresses one of the prior objections to its offer. Attention will turn to financing mix, regulatory review, and earnings outlooks as investors gauge the strategic logic and capital intensity.
- Health care: GSK’s $2.2 billion acquisition targeting a food allergy drug highlights continued deal-making in defensible, innovation-driven niches. Given XLV’s relative resilience this morning, health care remains a candidate for defensive allocation if macro volatility persists.
- Industrials: 3M’s solid report not lifting the stock underscores that macro currents can supersede micro beats during risk-off phases.
State of play
At the open, the cross-asset message is clear: (1) equities are de-risking, with growth and small caps leading to the downside; (2) long-duration Treasuries are under pressure; (3) gold and silver are bid as inflation hedges and alternative stores of value; (4) energy is firm, with natural gas spiking on weather; (5) the dollar is softer, and crypto is mildly weaker. The proximate catalysts—tariff threats and prospective EU retaliation—compound existing concerns about policy uncertainty and inflation stickiness, even as baseline inflation expectations remain anchored. In this environment, investors appear to be prioritizing liquidity and real assets over duration and cyclicality.
Outlook: what to watch next
- U.S.–EU tariff trajectory: Any concrete steps toward or away from a Feb. 1 implementation of new U.S. tariffs—and the EU’s response—will set the tone for risk assets.
- Earnings calendar: Focus on bellwethers flagged for this week—including Netflix, Intel, Capital One, and McCormick—for read-throughs on consumer demand, AI/data-center spending, credit quality, and pricing power.
- Energy/weather: The magnitude and duration of the Northeastern cold snap will matter for the sustainability of today’s natural gas spike and potential downstream effects on power prices.
- Fed optics and policy communication: Chair Powell’s visibility around institutional developments could influence perceptions of central bank independence. Markets will parse any remarks for implications on the reaction function.
- Metals and the dollar: Whether today’s gold and silver strength persists—and how EURUSD trades—will be a useful barometer of ongoing “Sell America” positioning.
Risks
- Escalation of the U.S.–EU trade dispute triggering a tit-for-tat tariff cycle that undermines growth and complicates the inflation outlook.
- Energy-price shocks from severe weather that filter into broader inflation and squeeze margins, especially for energy-intensive industries.
- Higher-for-longer long-end yields if fiscal and term premia remain elevated, pressuring duration-sensitive equities and credit.
- Policy and regulatory uncertainty—across trade, tech, and central bank governance—dampening risk appetite and capex.
- Liquidity strains or volatility spikes in crypto that bleed into broader risk sentiment.
Bottom line: The opening tape reflects a classic risk-off reaction to trade-policy risk and inflation-hedge buying. With equities lower, long-duration bonds softer, precious metals and energy firmer, and the dollar weaker, investors are hedging against policy shocks and potential inflation persistence. Earnings and policy headlines over the next several sessions will determine whether today’s moves mark a transient shock or the start of a broader de-risking phase.