State of Market: Close 01/01/26
Stocks and commodities slip into year-end close as yields hold firm; metals cool after a record run
At the latest close, broad U.S. equity ETFs, most sectors, Treasurys, and commodities finished lower, while the dollar edged mixed against the euro and major cryptocurrencies firmed modestly. Fed minutes pointing to a divided committee and inflation expectations anchored near the mid-2% range framed the macro tone.
TendieTensor.com State of Market Close
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Overview
At the most recent close, U.S. markets reflected a cautious tone across risk assets. All four major U.S. equity proxies—SPY, QQQ, DIA, and IWM—finished below their prior closes. Sector proxies that were quoted also ended softer. Treasurys were weaker across the curve on the day (prices down), consistent with a yield backdrop that remains elevated at the long end. Precious metals cooled after a standout year, and broader commodity benchmarks slipped alongside crude oil and natural gas ETFs. In currencies, EURUSD was little changed to slightly softer intraday versus its open, while crypto majors Bitcoin (BTCUSD) and Ether (ETHUSD) posted modest intraday gains.
Macro backdrop: yields, inflation, and expectations
Treasury yields continue to present a curve with a notable positive slope from the front end to the long end. The latest available readings show the 2-year at 3.45%, 5-year at 3.68%, 10-year at 4.14%, and 30-year at 4.81%. The combination of a 10-year yield north of 4% and a still-higher 30-year suggests financial conditions remain sensitive to long-duration risk, helping explain why duration proxies such as IEF and TLT finished below prior closes on the day.
On inflation, the November headline CPI index level stands at 325.031 (index level), with the core CPI index at 331.068. While index levels do not, by themselves, convey month-over-month or year-over-year changes, they set the stage for the broader discussion of inflation progress. Expectations derived from model-based measures as of December indicate 1-year inflation expectations at 3.20%, stepping down to 2.42% for 5-year and 2.34% for 10-year horizons. This term structure of expectations is consistent with longer-run inflation anticipated near the mid-2% range, even as the nearer-term outlook remains somewhat higher.
Policy commentary over the past 24–48 hours reinforces a picture of uncertainty. Bloomberg reported that the Federal Reserve’s minutes show a deep split over the path of interest-rate cuts, with a 9–3 vote to lower the policy rate by 25 basis points to a 3.5%–3.75% range and dissent spanning both larger cuts and no change. MarketWatch likewise highlighted that rates could be on hold “for some time” as the Committee assesses the effect of this year’s cumulative easing steps. Against that backdrop, jobless claims data referenced by MarketWatch showed a third straight weekly decline, falling below 200,000 and surprising relative to forecasts near 220,000—evidence that labor conditions remain comparatively steady. Together, these inputs square with a rates market that is reluctant to price aggressive additional easing when demand and employment do not signal pronounced weakness and when long-run inflation expectations are reasonably anchored.
Equities: broad indices softer into the close
Across the major index proxies, the tone at the latest close was weaker:
- SPY last traded at 681.84, below its previous close of 687.01.
- QQQ finished at 614.28 versus a prior 619.43.
- DIA ended at 480.61 against 483.59 previously.
- IWM closed at 246.19 compared to 248.03 the day before.
The uniform dip across large-cap, Dow-linked, Nasdaq-100, and small-cap ETFs indicates broad selling pressure rather than a narrowly concentrated move. Articles capturing the end of the year’s trading noted a slump into the final session of 2025, and separate commentary from MarketWatch suggested that 2026 is beginning with echoes of prior cycles where style and size leadership shifts could matter. Macro sensitivity remains a plausible driver: long-end yields near 4.8% on the 30-year and above 4.1% on the 10-year typically compress equity multiples, particularly for longer-duration growth exposures.
Sector color: tech, financials, health care, and a 40s-handle sector ETF all lower
Among the sector proxies quoted, each ended below its previous close:
- XLK last traded at 143.96 (prior 145.41).
- XLF closed at 54.7693 (prior 55.18).
- XLV ended at 154.81 (prior 155.68).
- The sector ETF quoted with a 42.695 last price (prior 42.96) also finished lower.
While tech (XLK) and health care (XLV) are often less directly helped by steeper curves, financials (XLF) typically benefit when net interest margins expand. However, with the 2s–10s configuration showing the 10-year above the 2-year but the policy path still uncertain per the Fed minutes, sector positioning remains sensitive to how quickly and in what configuration the curve evolves. A MarketWatch piece suggested that regional-bank equities could find a friendlier backdrop in 2026 if the curve steepens, regulation eases, and M&A picks up—factors to watch if rate policy remains on hold and growth stabilizes.
Bonds: duration slips as long-end yields stay elevated
Treasury ETF proxies declined at the close:
- TLT last traded at 87.17 versus a prior close of 87.86.
- IEF finished at 96.16 (prior 96.48).
- SHY ended near 82.83 (prior 82.85).
The pattern—more pressure on intermediate and long duration than on the front end—is consistent with the level and shape of the curve. With the Fed’s minutes underscoring internal debate and market commentary pointing to a potential pause to evaluate the effect of prior cuts, the long end may continue to bear the brunt of term-premium and fiscal supply concerns. In this environment, equities and duration-sensitive assets can remain inversely correlated on a day-to-day basis, as seen in the latest session.
Commodities: precious metals ease; energy and a broad basket dip
The precious-metals complex cooled at the close:
- GLD ended at 396.30 (prior 398.89).
- SLV finished at 64.4399 (prior 68.98), giving back part of a powerful rally.
Several reports captured the context: Bloomberg noted that gold and silver slipped into the end of a record-setting year for the metals, citing profit-taking. MarketWatch highlighted that silver, gold, and copper “trounced” stocks over the year and discussed a key chart level into 2026, while other MarketWatch coverage weighed whether silver’s surge signaled bubble dynamics or durable structural support. These narratives help frame the day’s pullback not necessarily as a trend break, but as a consolidation after outsized moves.
Energy and broader commodities also eased:
- USO last traded at 69.15 (prior 69.74).
- UNG closed at 12.245 (prior 13.12).
- DBC ended at 22.37 (prior 22.64).
Energy’s softer tone dovetails with global headlines. Bloomberg reported that Russian crude flows to India have fluctuated under evolving sanction dynamics, while separate coverage chronicled shifting demand and subsidies in China. More immediately, the broad basket’s decline (DBC) underscores a modest de-risking across commodity exposures in the session.
FX and crypto: euro little changed; Bitcoin and Ether firm
EURUSD marked 1.17354 late in the day, slightly below its indicated session open around 1.17526, reflecting a marginal softening of the euro versus the dollar intraday. Given the U.S. rates picture—long-end yields elevated and policy makers signaling patience—such day-to-day currency adjustments are consistent with a dollar that can find episodic support.
In digital assets, crypto benchmarks edged higher intraday:
- BTCUSD marked 88,161.28 versus an open of 87,431.89.
- ETHUSD marked 2,985.90 versus an open of 2,970.31.
This modest firming comes amid mixed corporate engagement with the asset class. MarketWatch reported that a Beckham-backed health company reversed course on its earlier plan to hold bitcoin as a treasury asset, and a separate MarketWatch piece described how one company’s additional share issuance to fund bitcoin purchases coincided with new lows in that stock. Those micro headlines show that corporate balance-sheet adoption of bitcoin remains uneven, even as spot prices themselves held a bid in the latest session.
Notable company and policy headlines
- Housing-related tariffs: MarketWatch reported that the administration will spare homeowners from higher tariffs on cabinets and certain furniture in 2026. This follows a 2025 period where tariff concerns weighed on home-furnishing stocks. Any policy clarity that limits pass-through costs into housing-related goods could relieve a pocket of the consumer complex in 2026.
- Labor and wages: CNBC highlighted that minimum wages increased in 19 states, affecting more than 8.3 million workers. This development can support household income and consumption, albeit with potential implications for labor costs and margins in labor-intensive industries.
- Macro risks into 2026: A MarketWatch piece stressed that inflation progress has stalled and the labor market looks shaky—tempering the otherwise steady claims data. The same outlet flagged a renewed risk of a government shutdown as Congress returns with a new deadline; such fiscal uncertainty can influence near-term market sentiment and term premia.
- Fed policy signaling: Bloomberg’s minutes recap and MarketWatch’s take on a potential pause “for some time” frame the policy debate heading into early 2026. Additionally, MarketWatch reported the White House may announce a replacement for the Fed Chair in January; personnel uncertainty at the central bank can add to rate-volatility risk.
- Autos and consumer discretionary: MarketWatch noted Tesla’s pessimistic fourth-quarter sales outlook, implying 2025 deliveries of 1.64 million vehicles—below 2024 and 2023 totals—adding a cautious note around EV demand. Separately, both MarketWatch and CNBC reported on significant insider purchases at Nike, which supported the stock late in the year.
- AI and deal activity: MarketWatch chronicled a late-year burst of AI-related M&A at megacap tech, underscoring that balance-sheet strength continues to support strategic investment even as public-market valuations reset day to day. Looking ahead, MarketWatch also spotlighted a potential 2026 IPO pipeline that includes SpaceX and Anthropic, echoing broader commentary that AI-linked issuance could shape equity supply and factor leadership in the new year.
- Thematic ETFs and politics: MarketWatch reported on the launch of five “Made in America” ETFs by Trump Media, a novel test of political branding as an investable theme.
Context on the trading calendar
A MarketWatch calendar explainer noted holiday closures around New Year’s. With markets transitioning from year-end settlement into the first sessions of 2026, liquidity patterns can be uneven, and price action around the latest close should be interpreted in that light.
State of play, by sleeve
- Equities: Index ETFs finished below prior closes across large-cap, Nasdaq-100, Dow, and small-cap proxies. Elevated long-end yields and policy uncertainty kept multiples constrained into the year-end.
- Sectors: The tech (XLK), financials (XLF), health care (XLV), and an additional sector ETF quoted in the low 40s all ended below prior closes. Curve evolution and regulatory expectations are key watchpoints—particularly for financials in early 2026, per recent commentary.
- Bonds: Duration sold off modestly (TLT, IEF), with the front end little changed (SHY). That aligns with a curve anchored by a 10-year around 4.14% and a 30-year near 4.81%.
- Commodities: Metals retreated (GLD, SLV) amid profit-taking after a record-setting year, while crude (USO), natural gas (UNG), and a broad commodities basket (DBC) also slipped.
- FX and crypto: EURUSD was marginally softer versus its session open. BTCUSD and ETHUSD posted modest intraday gains even as corporate adoption headlines remained mixed.
What to watch next
- Policy signals: With the Fed minutes revealing internal debate and outside commentary suggesting a near-term pause, incoming labor and inflation data will shape the path of cuts. Market sensitivity to any change in long-run inflation expectations remains high.
- Fiscal developments: Watch for headlines around budget negotiations and the potential for a government shutdown as flagged by MarketWatch. Term premia can respond quickly to fiscal uncertainty.
- Metals volatility: After a standout year, gold and silver are consolidating. MarketWatch and Bloomberg coverage suggests positioning and margin dynamics can amplify swings; key levels bear monitoring.
- Sector leadership: If the curve steepens in early 2026, financials could benefit. Conversely, if long-end yields remain sticky, growth-heavy tech may continue to trade with duration sensitivity.
- IPO and AI pipeline: Potential marquee listings (MarketWatch cited SpaceX and Anthropic) and ongoing AI deal flow could influence factor leadership and liquidity conditions.
- Consumer conditions: Minimum-wage increases and tariff policy developments (cabinets/furniture) may affect discretionary demand and margins in select industries.
Bottom line
The latest close painted a uniform picture of risk-off across equities, sectors, bonds, and commodities, set against a macro mix of elevated long-end yields, steady labor signals, and a Fed that remains divided on the pace of easing. Metals consolidated after a historic year, the euro was essentially flat to slightly softer versus the dollar, and crypto benchmarks ticked higher intraday. With policy and fiscal headlines prominent and liquidity normalizing after the holiday turn, the first weeks of 2026 will be about parsing whether rates, growth, and earnings can align to support multiple expansion—or whether elevated real yields continue to cap rallies until clearer disinflation progress appears.
Overview
At the most recent close, U.S. markets reflected a cautious tone across risk assets. All four major U.S. equity proxies—SPY, QQQ, DIA, and IWM—finished below their prior closes. Sector proxies that were quoted also ended softer. Treasurys were weaker across the curve on the day (prices down), consistent with a yield backdrop that remains elevated at the long end. Precious metals cooled after a standout year, and broader commodity benchmarks slipped alongside crude oil and natural gas ETFs. In currencies, EURUSD was little changed to slightly softer intraday versus its open, while crypto majors Bitcoin (BTCUSD) and Ether (ETHUSD) posted modest intraday gains.
Macro backdrop: yields, inflation, and expectations
Treasury yields continue to present a curve with a notable positive slope from the front end to the long end. The latest available readings show the 2-year at 3.45%, 5-year at 3.68%, 10-year at 4.14%, and 30-year at 4.81%. The combination of a 10-year yield north of 4% and a still-higher 30-year suggests financial conditions remain sensitive to long-duration risk, helping explain why duration proxies such as IEF and TLT finished below prior closes on the day.
On inflation, the November headline CPI index level stands at 325.031 (index level), with the core CPI index at 331.068. While index levels do not, by themselves, convey month-over-month or year-over-year changes, they set the stage for the broader discussion of inflation progress. Expectations derived from model-based measures as of December indicate 1-year inflation expectations at 3.20%, stepping down to 2.42% for 5-year and 2.34% for 10-year horizons. This term structure of expectations is consistent with longer-run inflation anticipated near the mid-2% range, even as the nearer-term outlook remains somewhat higher.
Policy commentary over the past 24–48 hours reinforces a picture of uncertainty. Bloomberg reported that the Federal Reserve’s minutes show a deep split over the path of interest-rate cuts, with a 9–3 vote to lower the policy rate by 25 basis points to a 3.5%–3.75% range and dissent spanning both larger cuts and no change. MarketWatch likewise highlighted that rates could be on hold “for some time” as the Committee assesses the effect of this year’s cumulative easing steps. Against that backdrop, jobless claims data referenced by MarketWatch showed a third straight weekly decline, falling below 200,000 and surprising relative to forecasts near 220,000—evidence that labor conditions remain comparatively steady. Together, these inputs square with a rates market that is reluctant to price aggressive additional easing when demand and employment do not signal pronounced weakness and when long-run inflation expectations are reasonably anchored.
Equities: broad indices softer into the close
Across the major index proxies, the tone at the latest close was weaker:
- SPY last traded at 681.84, below its previous close of 687.01.
- QQQ finished at 614.28 versus a prior 619.43.
- DIA ended at 480.61 against 483.59 previously.
- IWM closed at 246.19 compared to 248.03 the day before.
The uniform dip across large-cap, Dow-linked, Nasdaq-100, and small-cap ETFs indicates broad selling pressure rather than a narrowly concentrated move. Articles capturing the end of the year’s trading noted a slump into the final session of 2025, and separate commentary from MarketWatch suggested that 2026 is beginning with echoes of prior cycles where style and size leadership shifts could matter. Macro sensitivity remains a plausible driver: long-end yields near 4.8% on the 30-year and above 4.1% on the 10-year typically compress equity multiples, particularly for longer-duration growth exposures.
Sector color: tech, financials, health care, and a 40s-handle sector ETF all lower
Among the sector proxies quoted, each ended below its previous close:
- XLK last traded at 143.96 (prior 145.41).
- XLF closed at 54.7693 (prior 55.18).
- XLV ended at 154.81 (prior 155.68).
- The sector ETF quoted with a 42.695 last price (prior 42.96) also finished lower.
While tech (XLK) and health care (XLV) are often less directly helped by steeper curves, financials (XLF) typically benefit when net interest margins expand. However, with the 2s–10s configuration showing the 10-year above the 2-year but the policy path still uncertain per the Fed minutes, sector positioning remains sensitive to how quickly and in what configuration the curve evolves. A MarketWatch piece suggested that regional-bank equities could find a friendlier backdrop in 2026 if the curve steepens, regulation eases, and M&A picks up—factors to watch if rate policy remains on hold and growth stabilizes.
Bonds: duration slips as long-end yields stay elevated
Treasury ETF proxies declined at the close:
- TLT last traded at 87.17 versus a prior close of 87.86.
- IEF finished at 96.16 (prior 96.48).
- SHY ended near 82.83 (prior 82.85).
The pattern—more pressure on intermediate and long duration than on the front end—is consistent with the level and shape of the curve. With the Fed’s minutes underscoring internal debate and market commentary pointing to a potential pause to evaluate the effect of prior cuts, the long end may continue to bear the brunt of term-premium and fiscal supply concerns. In this environment, equities and duration-sensitive assets can remain inversely correlated on a day-to-day basis, as seen in the latest session.
Commodities: precious metals ease; energy and a broad basket dip
The precious-metals complex cooled at the close:
- GLD ended at 396.30 (prior 398.89).
- SLV finished at 64.4399 (prior 68.98), giving back part of a powerful rally.
Several reports captured the context: Bloomberg noted that gold and silver slipped into the end of a record-setting year for the metals, citing profit-taking. MarketWatch highlighted that silver, gold, and copper “trounced” stocks over the year and discussed a key chart level into 2026, while other MarketWatch coverage weighed whether silver’s surge signaled bubble dynamics or durable structural support. These narratives help frame the day’s pullback not necessarily as a trend break, but as a consolidation after outsized moves.
Energy and broader commodities also eased:
- USO last traded at 69.15 (prior 69.74).
- UNG closed at 12.245 (prior 13.12).
- DBC ended at 22.37 (prior 22.64).
Energy’s softer tone dovetails with global headlines. Bloomberg reported that Russian crude flows to India have fluctuated under evolving sanction dynamics, while separate coverage chronicled shifting demand and subsidies in China. More immediately, the broad basket’s decline (DBC) underscores a modest de-risking across commodity exposures in the session.
FX and crypto: euro little changed; Bitcoin and Ether firm
EURUSD marked 1.17354 late in the day, slightly below its indicated session open around 1.17526, reflecting a marginal softening of the euro versus the dollar intraday. Given the U.S. rates picture—long-end yields elevated and policy makers signaling patience—such day-to-day currency adjustments are consistent with a dollar that can find episodic support.
In digital assets, crypto benchmarks edged higher intraday:
- BTCUSD marked 88,161.28 versus an open of 87,431.89.
- ETHUSD marked 2,985.90 versus an open of 2,970.31.
This modest firming comes amid mixed corporate engagement with the asset class. MarketWatch reported that a Beckham-backed health company reversed course on its earlier plan to hold bitcoin as a treasury asset, and a separate MarketWatch piece described how one company’s additional share issuance to fund bitcoin purchases coincided with new lows in that stock. Those micro headlines show that corporate balance-sheet adoption of bitcoin remains uneven, even as spot prices themselves held a bid in the latest session.
Notable company and policy headlines
- Housing-related tariffs: MarketWatch reported that the administration will spare homeowners from higher tariffs on cabinets and certain furniture in 2026. This follows a 2025 period where tariff concerns weighed on home-furnishing stocks. Any policy clarity that limits pass-through costs into housing-related goods could relieve a pocket of the consumer complex in 2026.
- Labor and wages: CNBC highlighted that minimum wages increased in 19 states, affecting more than 8.3 million workers. This development can support household income and consumption, albeit with potential implications for labor costs and margins in labor-intensive industries.
- Macro risks into 2026: A MarketWatch piece stressed that inflation progress has stalled and the labor market looks shaky—tempering the otherwise steady claims data. The same outlet flagged a renewed risk of a government shutdown as Congress returns with a new deadline; such fiscal uncertainty can influence near-term market sentiment and term premia.
- Fed policy signaling: Bloomberg’s minutes recap and MarketWatch’s take on a potential pause “for some time” frame the policy debate heading into early 2026. Additionally, MarketWatch reported the White House may announce a replacement for the Fed Chair in January; personnel uncertainty at the central bank can add to rate-volatility risk.
- Autos and consumer discretionary: MarketWatch noted Tesla’s pessimistic fourth-quarter sales outlook, implying 2025 deliveries of 1.64 million vehicles—below 2024 and 2023 totals—adding a cautious note around EV demand. Separately, both MarketWatch and CNBC reported on significant insider purchases at Nike, which supported the stock late in the year.
- AI and deal activity: MarketWatch chronicled a late-year burst of AI-related M&A at megacap tech, underscoring that balance-sheet strength continues to support strategic investment even as public-market valuations reset day to day. Looking ahead, MarketWatch also spotlighted a potential 2026 IPO pipeline that includes SpaceX and Anthropic, echoing broader commentary that AI-linked issuance could shape equity supply and factor leadership in the new year.
- Thematic ETFs and politics: MarketWatch reported on the launch of five “Made in America” ETFs by Trump Media, a novel test of political branding as an investable theme.
Context on the trading calendar
A MarketWatch calendar explainer noted holiday closures around New Year’s. With markets transitioning from year-end settlement into the first sessions of 2026, liquidity patterns can be uneven, and price action around the latest close should be interpreted in that light.
State of play, by sleeve
- Equities: Index ETFs finished below prior closes across large-cap, Nasdaq-100, Dow, and small-cap proxies. Elevated long-end yields and policy uncertainty kept multiples constrained into the year-end.
- Sectors: The tech (XLK), financials (XLF), health care (XLV), and an additional sector ETF quoted in the low 40s all ended below prior closes. Curve evolution and regulatory expectations are key watchpoints—particularly for financials in early 2026, per recent commentary.
- Bonds: Duration sold off modestly (TLT, IEF), with the front end little changed (SHY). That aligns with a curve anchored by a 10-year around 4.14% and a 30-year near 4.81%.
- Commodities: Metals retreated (GLD, SLV) amid profit-taking after a record-setting year, while crude (USO), natural gas (UNG), and a broad commodities basket (DBC) also slipped.
- FX and crypto: EURUSD was marginally softer versus its session open. BTCUSD and ETHUSD posted modest intraday gains even as corporate adoption headlines remained mixed.
What to watch next
- Policy signals: With the Fed minutes revealing internal debate and outside commentary suggesting a near-term pause, incoming labor and inflation data will shape the path of cuts. Market sensitivity to any change in long-run inflation expectations remains high.
- Fiscal developments: Watch for headlines around budget negotiations and the potential for a government shutdown as flagged by MarketWatch. Term premia can respond quickly to fiscal uncertainty.
- Metals volatility: After a standout year, gold and silver are consolidating. MarketWatch and Bloomberg coverage suggests positioning and margin dynamics can amplify swings; key levels bear monitoring.
- Sector leadership: If the curve steepens in early 2026, financials could benefit. Conversely, if long-end yields remain sticky, growth-heavy tech may continue to trade with duration sensitivity.
- IPO and AI pipeline: Potential marquee listings (MarketWatch cited SpaceX and Anthropic) and ongoing AI deal flow could influence factor leadership and liquidity conditions.
- Consumer conditions: Minimum-wage increases and tariff policy developments (cabinets/furniture) may affect discretionary demand and margins in select industries.
Bottom line
The latest close painted a uniform picture of risk-off across equities, sectors, bonds, and commodities, set against a macro mix of elevated long-end yields, steady labor signals, and a Fed that remains divided on the pace of easing. Metals consolidated after a historic year, the euro was essentially flat to slightly softer versus the dollar, and crypto benchmarks ticked higher intraday. With policy and fiscal headlines prominent and liquidity normalizing after the holiday turn, the first weeks of 2026 will be about parsing whether rates, growth, and earnings can align to support multiple expansion—or whether elevated real yields continue to cap rallies until clearer disinflation progress appears.