State of Market: Close 01/14/26
Small caps and defensives buck tech-led selloff; bonds and precious metals bid into the close
SPY -0.5%, QQQ -1.1%, DIA -0.1%, IWM +0.7%. TLT, GLD, and SLV advance as long-end yields hold near 4.2% on the 10-year. Oil and natural gas slip.
TendieTensor.com State of Market Close
•
U.S. equities faded into the close on Wednesday with a distinct rotation beneath the surface. The S&P 500 proxy SPY finished at 690.44 versus a prior close of 693.77 (down about 0.5%), while the tech-heavy QQQ ended at 619.60 versus 626.24 (down roughly 1.1%). The Dow proxy DIA was nearly unchanged at 491.64 versus 491.94 (down about 0.1%). In contrast, small caps outperformed: the IWM closed at 263.21 versus 261.35 (up about 0.7%).
The macro backdrop remained a central driver. Treasury yields stayed elevated on the long end, but Treasuries still found buyers, and duration was bid: TLT rose to 88.33 from 87.82 (up roughly 0.6%), with IEF at 96.49 versus 96.30 (up 0.2%) and SHY fractionally higher. Precious metals extended their leadership—gold and especially silver—while energy commodities lagged, with oil and natural gas lower on the day.
Macro: inflation, expectations, and policy signals
Treasury yields continued to reflect a moderately higher-for-longer landscape on the long end. As of the latest available readings (01/12), the 10-year stood at 4.19% and the 30-year at 4.83%, while the 2-year was 3.54% and the 5-year 3.77%. The curve remains upward sloping from 2 to 10 years, a shape consistent with an economy that has cooled from 2025’s extremes but where term premia and policy uncertainty are still priced.
Inflation data for December showed headline CPI at 326.03 (index level) and core CPI at 331.86. While index levels do not map directly to a monthly rate in this snapshot, they underscore that price levels remain elevated. The latest inflation expectations models point to anchoring near the Fed’s longer-run goals: model-based 1-year at about 2.60%, 5-year near 2.33%, and 10-year roughly 2.32%. That anchoring contrasts with anecdotal signs of pass-through pressures. The Fed’s Beige Book noted that many U.S. businesses have begun passing tariff-related costs to consumers, with only two of the twelve districts reporting slight price growth and the remainder seeing higher costs. Separately, a report on wholesale costs during the government shutdown period suggested persistent inflation in the pipeline.
Policy risk remains a front-and-center theme. Global central bankers publicly defended Fed Chair Jerome Powell, while other commentary warned that political pressure on the Fed could raise inflation risks if it undermines confidence in the central bank’s independence. Tariff policy is another live wire; market coverage highlighted that a Supreme Court ruling on tariffs is being closely watched, and that delays could themselves be a signal. More broadly, market pieces examined how the administration’s “affordability” push intersects with tariff design, leaving investors to parse the net demand versus inflation effect in the months ahead.
Equities: tech stumbles, defensives and small caps shine
Index performance masked rotation. The QQQ’s 619.60 finish versus 626.24 (down about 1.1%) signals notable pressure in megacap tech, consistent with sector tape. The SPY closed at 690.44 versus 693.77 (down 0.5%), while the IWM’s 263.21 versus 261.35 (up 0.7%) highlights continued pockets of strength in domestically focused and more rate-sensitive small caps. The DIA was little changed at 491.64 compared with 491.94.
Sector-wise, the Technology Select Sector SPDR (XLK) fell to 144.70 from 146.48 (down about 1.2%), under pressure from ongoing debates about AI monetization and competitive dynamics. Articles flagged that Microsoft is viewed by some as underpriced given corporate demand for its AI offerings, yet its shares have not behaved like a clear AI winner lately. Other coverage underscored renewed AI-related investor skepticism toward software names, with Adobe at a multiyear low and Salesforce moving lower as investors reassessed business model exposure and AI’s profit path. In parallel, Google introduced a “Personal Intelligence” feature within its Gemini app, pointing to ongoing platform competition that may be pressuring incumbents’ multiples.
Financials were soft: the XLF ended at 54.16 versus 54.23 (down about 0.1%). Earnings remained mixed. Citigroup’s stock rose despite a profit miss linked to a previously disclosed Russia-related loss. Bank of America reported better-than-expected earnings and expressed confidence in the U.S. economy. In contrast, Wells Fargo missed on revenue. Another pressure point for payments: Visa and Mastercard reportedly saw their sharpest stock drops in half a year amid concerns around potential routing mandates, a reminder of regulatory risk embedded in parts of financials.
Defensive leadership persisted. Health Care (XLV) rose to 157.86 from 156.74 (up about 0.7%), and Utilities (XLU, via the utilities-labeled quote provided) finished at 43.18 compared with 42.85 (up about 0.8%). That outperformance aligns with the bid for longer duration in the bond market and with investors’ desire for earnings resilience as policy uncertainty and pricing dynamics churn.
Outside of software, multiple industry headlines framed today’s crosscurrents. Cybersecurity stocks fell after reports that Chinese authorities asked domestic firms to stop using software from several U.S. and Israeli vendors—illustrating how geopolitics can quickly reshape demand expectations for specific subsectors. In energy, Exxon Mobil’s shares hit a new high in separate coverage, even as oil prices eased today—a reminder that company-specific drivers can diverge from the commodity tape. Delta’s shares were hit after adjusted revenue missed expectations in the wake of the shutdown, reflecting lingering demand and operational normalization challenges even as travel demand remains generally solid.
Bonds: duration bid as the long end steadies
Buying interest reemerged in Treasuries despite 10-year yields near 4.19%. The long-duration TLT closed at 88.33 versus 87.82 (up roughly 0.6%). Intermediate duration, as proxied by IEF, finished at 96.49 versus 96.30 (up 0.2%). SHY edged up to 82.88 from 82.85. The price gains, particularly at the long end, are consistent with a market that sees near-term inflation contained enough to support duration, even as policy risks keep a floor under yields. The bid for quality duration also pairs well with defensive sector leadership in equities.
Commodities: precious outperforms; energy slips
Gold continued to attract flows: GLD ended at 425.94 from 421.63 (up about 1.0%). Silver outpaced gold by a wide margin, with SLV jumping to 84.56 from 78.60 (up roughly 7.6%). Coverage noted silver’s break above $90 and that futures margin requirements have increased in recent weeks, signaling both strong momentum and the exchange’s attempt to moderate speculative excess. Some strategists cautioned against overreliance on gold as a portfolio diversifier, but today’s tape shows investors seeking hedges across precious metals.
Energy commodities lagged. Oil, via USO, slipped to 72.61 from 73.48 (down about 1.2%). Natural gas fell sharply: UNG dropped to 10.24 from 11.32 (down roughly 9.6%), underscoring the volatility that has characterized the gas complex. The broad commodities basket DBC was modestly higher at 23.41 versus 23.37 (up about 0.2%), boosted by metals despite energy’s drag.
FX and crypto: tight euro range, crypto firm
EURUSD traded in a very tight range today, with a mark near 1.1641, a session high around 1.1659 and a low near 1.1642. With such a narrow intraday band and an open near 1.1645, the pair was broadly range-bound.
Crypto assets were firmer. Bitcoin (BTCUSD) marked around 97,594 versus an open near 95,199 (up about 2.5%), while Ether (ETHUSD) traded near 3,381 versus an open around 3,337 (up roughly 1.3%). Both printed near-session highs into the close, outpacing risk assets and aligning with the bid in precious metals—a risk-hedging mix that has periodically emerged when policy headlines are front-loaded.
Company and thematic highlights from today’s coverage
- AI platforms and software monetization: Microsoft was framed as “well underpriced” by one bank given corporate enthusiasm for its AI stack, yet the shares have not traded like a decisive AI winner recently. Meanwhile, Google’s new Personal Intelligence feature in Gemini highlights intensifying competition at the platform layer. On the software side, Adobe’s multiyear low and separate commentary on Adobe and Salesforce selling pressure reflect investor debate over AI’s net revenue uplift versus margin impact.
- Cybersecurity and China exposure: Reports that Chinese authorities asked firms to stop using certain foreign cybersecurity software pressured the group, with additional coverage noting weakness among U.S. cybersecurity names. The episode reinforces geopolitical risk premia for segments of enterprise software.
- Banks, payments, and regulation: Mixed big-bank results (Citigroup up despite a miss tied to Russia-related charges; Bank of America topping expectations; Wells Fargo missing on revenue) came alongside payments pressure as Visa and Mastercard fell on concerns about routing mandates. The combination likely contributed to XLF’s slight decline today.
- Energy divergence: Despite oil’s downtick, Exxon Mobil’s stock hit a new high in separate reporting, a reminder that idiosyncratic capital allocation and geopolitical positioning can overshadow the commodity move on a given day.
- Airlines: Delta’s stock was hit after adjusted revenue missed expectations following the shutdown, illustrating uneven post-disruption recovery dynamics across travel.
- Policy and the Fed: Central bankers publicly defended Fed Chair Powell amid a criminal probe, while commentators warned that political interference risks fueling inflation if it erodes Fed independence. Together with the Beige Book’s observations about tariff pass-through, these signals kept policy uncertainty prominent in risk pricing.
Outlook
The near-term tape looks set to remain sensitive to policy and earnings. With the 10-year around 4.19% and duration bid, defensives and small caps could continue to find support if investors maintain a barbell between resilience and domestic cyclicality. Precious metals’ outsized performance—and especially silver’s surge—warrants monitoring for volatility spillovers if positioning becomes crowded. On the policy front, tariff developments and any further headlines around the Fed’s independence will be market-relevant, especially for sectors most exposed to consumer prices and financial conditions. Within equities, the focus remains on whether AI leaders can translate product momentum into revenue durability—an issue that weighed on parts of software today—and on the evolving regulatory framework for payments and cybersecurity.
What to watch next
- Tariff headlines and the timing of any Supreme Court decision; implications for consumer prices and corporate margins, per Beige Book findings on pass-through.
- Earnings from banks and large-cap tech for confirmation (or refutation) of today’s rotation.
- Long-end yields around 4.2% on the 10-year as a pivot for duration appetite and equity leadership.
- Metals momentum, notably silver after a sharp advance amid higher margin requirements and record-level commentary.
- Regulatory developments affecting payments routing and credit costs; watch knock-on effects to financials.
- Geopolitical restrictions on cybersecurity software and any additional export or usage curbs that could broaden to other tech segments.
U.S. equities faded into the close on Wednesday with a distinct rotation beneath the surface. The S&P 500 proxy SPY finished at 690.44 versus a prior close of 693.77 (down about 0.5%), while the tech-heavy QQQ ended at 619.60 versus 626.24 (down roughly 1.1%). The Dow proxy DIA was nearly unchanged at 491.64 versus 491.94 (down about 0.1%). In contrast, small caps outperformed: the IWM closed at 263.21 versus 261.35 (up about 0.7%).
The macro backdrop remained a central driver. Treasury yields stayed elevated on the long end, but Treasuries still found buyers, and duration was bid: TLT rose to 88.33 from 87.82 (up roughly 0.6%), with IEF at 96.49 versus 96.30 (up 0.2%) and SHY fractionally higher. Precious metals extended their leadership—gold and especially silver—while energy commodities lagged, with oil and natural gas lower on the day.
Macro: inflation, expectations, and policy signals
Treasury yields continued to reflect a moderately higher-for-longer landscape on the long end. As of the latest available readings (01/12), the 10-year stood at 4.19% and the 30-year at 4.83%, while the 2-year was 3.54% and the 5-year 3.77%. The curve remains upward sloping from 2 to 10 years, a shape consistent with an economy that has cooled from 2025’s extremes but where term premia and policy uncertainty are still priced.
Inflation data for December showed headline CPI at 326.03 (index level) and core CPI at 331.86. While index levels do not map directly to a monthly rate in this snapshot, they underscore that price levels remain elevated. The latest inflation expectations models point to anchoring near the Fed’s longer-run goals: model-based 1-year at about 2.60%, 5-year near 2.33%, and 10-year roughly 2.32%. That anchoring contrasts with anecdotal signs of pass-through pressures. The Fed’s Beige Book noted that many U.S. businesses have begun passing tariff-related costs to consumers, with only two of the twelve districts reporting slight price growth and the remainder seeing higher costs. Separately, a report on wholesale costs during the government shutdown period suggested persistent inflation in the pipeline.
Policy risk remains a front-and-center theme. Global central bankers publicly defended Fed Chair Jerome Powell, while other commentary warned that political pressure on the Fed could raise inflation risks if it undermines confidence in the central bank’s independence. Tariff policy is another live wire; market coverage highlighted that a Supreme Court ruling on tariffs is being closely watched, and that delays could themselves be a signal. More broadly, market pieces examined how the administration’s “affordability” push intersects with tariff design, leaving investors to parse the net demand versus inflation effect in the months ahead.
Equities: tech stumbles, defensives and small caps shine
Index performance masked rotation. The QQQ’s 619.60 finish versus 626.24 (down about 1.1%) signals notable pressure in megacap tech, consistent with sector tape. The SPY closed at 690.44 versus 693.77 (down 0.5%), while the IWM’s 263.21 versus 261.35 (up 0.7%) highlights continued pockets of strength in domestically focused and more rate-sensitive small caps. The DIA was little changed at 491.64 compared with 491.94.
Sector-wise, the Technology Select Sector SPDR (XLK) fell to 144.70 from 146.48 (down about 1.2%), under pressure from ongoing debates about AI monetization and competitive dynamics. Articles flagged that Microsoft is viewed by some as underpriced given corporate demand for its AI offerings, yet its shares have not behaved like a clear AI winner lately. Other coverage underscored renewed AI-related investor skepticism toward software names, with Adobe at a multiyear low and Salesforce moving lower as investors reassessed business model exposure and AI’s profit path. In parallel, Google introduced a “Personal Intelligence” feature within its Gemini app, pointing to ongoing platform competition that may be pressuring incumbents’ multiples.
Financials were soft: the XLF ended at 54.16 versus 54.23 (down about 0.1%). Earnings remained mixed. Citigroup’s stock rose despite a profit miss linked to a previously disclosed Russia-related loss. Bank of America reported better-than-expected earnings and expressed confidence in the U.S. economy. In contrast, Wells Fargo missed on revenue. Another pressure point for payments: Visa and Mastercard reportedly saw their sharpest stock drops in half a year amid concerns around potential routing mandates, a reminder of regulatory risk embedded in parts of financials.
Defensive leadership persisted. Health Care (XLV) rose to 157.86 from 156.74 (up about 0.7%), and Utilities (XLU, via the utilities-labeled quote provided) finished at 43.18 compared with 42.85 (up about 0.8%). That outperformance aligns with the bid for longer duration in the bond market and with investors’ desire for earnings resilience as policy uncertainty and pricing dynamics churn.
Outside of software, multiple industry headlines framed today’s crosscurrents. Cybersecurity stocks fell after reports that Chinese authorities asked domestic firms to stop using software from several U.S. and Israeli vendors—illustrating how geopolitics can quickly reshape demand expectations for specific subsectors. In energy, Exxon Mobil’s shares hit a new high in separate coverage, even as oil prices eased today—a reminder that company-specific drivers can diverge from the commodity tape. Delta’s shares were hit after adjusted revenue missed expectations in the wake of the shutdown, reflecting lingering demand and operational normalization challenges even as travel demand remains generally solid.
Bonds: duration bid as the long end steadies
Buying interest reemerged in Treasuries despite 10-year yields near 4.19%. The long-duration TLT closed at 88.33 versus 87.82 (up roughly 0.6%). Intermediate duration, as proxied by IEF, finished at 96.49 versus 96.30 (up 0.2%). SHY edged up to 82.88 from 82.85. The price gains, particularly at the long end, are consistent with a market that sees near-term inflation contained enough to support duration, even as policy risks keep a floor under yields. The bid for quality duration also pairs well with defensive sector leadership in equities.
Commodities: precious outperforms; energy slips
Gold continued to attract flows: GLD ended at 425.94 from 421.63 (up about 1.0%). Silver outpaced gold by a wide margin, with SLV jumping to 84.56 from 78.60 (up roughly 7.6%). Coverage noted silver’s break above $90 and that futures margin requirements have increased in recent weeks, signaling both strong momentum and the exchange’s attempt to moderate speculative excess. Some strategists cautioned against overreliance on gold as a portfolio diversifier, but today’s tape shows investors seeking hedges across precious metals.
Energy commodities lagged. Oil, via USO, slipped to 72.61 from 73.48 (down about 1.2%). Natural gas fell sharply: UNG dropped to 10.24 from 11.32 (down roughly 9.6%), underscoring the volatility that has characterized the gas complex. The broad commodities basket DBC was modestly higher at 23.41 versus 23.37 (up about 0.2%), boosted by metals despite energy’s drag.
FX and crypto: tight euro range, crypto firm
EURUSD traded in a very tight range today, with a mark near 1.1641, a session high around 1.1659 and a low near 1.1642. With such a narrow intraday band and an open near 1.1645, the pair was broadly range-bound.
Crypto assets were firmer. Bitcoin (BTCUSD) marked around 97,594 versus an open near 95,199 (up about 2.5%), while Ether (ETHUSD) traded near 3,381 versus an open around 3,337 (up roughly 1.3%). Both printed near-session highs into the close, outpacing risk assets and aligning with the bid in precious metals—a risk-hedging mix that has periodically emerged when policy headlines are front-loaded.
Company and thematic highlights from today’s coverage
- AI platforms and software monetization: Microsoft was framed as “well underpriced” by one bank given corporate enthusiasm for its AI stack, yet the shares have not traded like a decisive AI winner recently. Meanwhile, Google’s new Personal Intelligence feature in Gemini highlights intensifying competition at the platform layer. On the software side, Adobe’s multiyear low and separate commentary on Adobe and Salesforce selling pressure reflect investor debate over AI’s net revenue uplift versus margin impact.
- Cybersecurity and China exposure: Reports that Chinese authorities asked firms to stop using certain foreign cybersecurity software pressured the group, with additional coverage noting weakness among U.S. cybersecurity names. The episode reinforces geopolitical risk premia for segments of enterprise software.
- Banks, payments, and regulation: Mixed big-bank results (Citigroup up despite a miss tied to Russia-related charges; Bank of America topping expectations; Wells Fargo missing on revenue) came alongside payments pressure as Visa and Mastercard fell on concerns about routing mandates. The combination likely contributed to XLF’s slight decline today.
- Energy divergence: Despite oil’s downtick, Exxon Mobil’s stock hit a new high in separate reporting, a reminder that idiosyncratic capital allocation and geopolitical positioning can overshadow the commodity move on a given day.
- Airlines: Delta’s stock was hit after adjusted revenue missed expectations following the shutdown, illustrating uneven post-disruption recovery dynamics across travel.
- Policy and the Fed: Central bankers publicly defended Fed Chair Powell amid a criminal probe, while commentators warned that political interference risks fueling inflation if it erodes Fed independence. Together with the Beige Book’s observations about tariff pass-through, these signals kept policy uncertainty prominent in risk pricing.
Outlook
The near-term tape looks set to remain sensitive to policy and earnings. With the 10-year around 4.19% and duration bid, defensives and small caps could continue to find support if investors maintain a barbell between resilience and domestic cyclicality. Precious metals’ outsized performance—and especially silver’s surge—warrants monitoring for volatility spillovers if positioning becomes crowded. On the policy front, tariff developments and any further headlines around the Fed’s independence will be market-relevant, especially for sectors most exposed to consumer prices and financial conditions. Within equities, the focus remains on whether AI leaders can translate product momentum into revenue durability—an issue that weighed on parts of software today—and on the evolving regulatory framework for payments and cybersecurity.
What to watch next
- Tariff headlines and the timing of any Supreme Court decision; implications for consumer prices and corporate margins, per Beige Book findings on pass-through.
- Earnings from banks and large-cap tech for confirmation (or refutation) of today’s rotation.
- Long-end yields around 4.2% on the 10-year as a pivot for duration appetite and equity leadership.
- Metals momentum, notably silver after a sharp advance amid higher margin requirements and record-level commentary.
- Regulatory developments affecting payments routing and credit costs; watch knock-on effects to financials.
- Geopolitical restrictions on cybersecurity software and any additional export or usage curbs that could broaden to other tech segments.