State of Market: Open 12/26/25
Stocks edge higher at the open as precious metals extend gains; bonds firm with 10-year near 4.17%
Santa Claus rally narratives persist, tech leads early with XLK up, while energy softens alongside oil. Gold and silver jump; dollar steady, crypto little changed.
TendieTensor.com State of Market Open
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Overview
U.S. markets opened the final Friday of the year on a steady footing, with a modest positive tone across large-cap benchmarks and ongoing leadership from technology. The S&P 500 proxy SPY is trading at 690.49 just after the opening bell, a touch above Wednesday’s close of 690.38. The Nasdaq-100 tracker QQQ is firmer at 624.74 versus a 623.93 prior close, while the Dow’s DIA is slightly softer at 486.86 versus 487.01. Small caps are fractionally lower, with IWM at 252.61 from 252.71. Early action thus reflects a continuation of the seasonal Santa Claus rally narratives highlighted in recent coverage, but with a selective tone and mixed breadth at the open.
The macro backdrop remains a key anchor: Treasury yields most recently stood with the 10-year at 4.17%, 2-year at 3.44%, 5-year at 3.71%, and 30-year at 4.84% (as of 12/22). Inflation expectations from December sit around 3.20% for one year, 2.42% at five years, and near 2.34% at ten years, implying longer-run anchors remain close to the low 2s. This mix—moderating medium- and long-term inflation expectations alongside policy-sensitive yields below recent peaks—has coincided with firmer bond ETFs this morning and supportive risk sentiment, even as several commentaries warn of complacency into 2026.
Macro backdrop: growth, inflation, yields
Recent economic updates in the news flow have been mixed but broadly constructive for risk assets. A delayed report showed U.S. real GDP grew at a 4.3% annualized pace in Q3, the strongest in two years, buoyed by consumer spending. Weekly jobless claims also remain low by historical standards, consistent with a labor market that, while cooler than earlier in the cycle, continues to avoid a sharp deterioration. Against that, several pieces flagged risks around stagflationary pockets and an uneven, “K‑shaped” consumer, reminding investors that 2026 momentum may depend on steady AI-related investment and the durability of consumer demand.
From a price-stability lens, the latest CPI index readings (headline CPI level 325.031 in November; core 331.068) and model-based inflation expectations (one‑year ~3.20%, five‑year ~2.42%, ten‑year ~2.34%, thirty‑year ~2.44%) suggest the market continues to lean toward disinflation over the medium term. The Treasury curve levels from earlier this week—10‑year at 4.17% and 2‑year at 3.44%—imply the front end is not signaling imminent re-acceleration fears. That tone is reflected in modest strength across duration this morning: TLT is at 88.09 (vs. 88.03 prior close), IEF at 96.49 (vs. 96.35), and SHY at 82.81 (vs. 82.73).
The combination of contained inflation expectations, steady growth signals, and less volatile rates markets has underpinned risk appetite—echoed by commentary noting low implied equity volatility and the historical tendency for late-December strength. Still, coverage also highlights the risk that investors are overlooking potential shocks as they look into 2026, a caution worth keeping in mind as positioning and liquidity can amplify moves around year-end.
Equities and sectors: tech steadies leadership; energy softens
- SPY: 690.49 vs. 690.38 previous close (marginally higher).
- QQQ: 624.74 vs. 623.93 (firmer; tech leadership evident).
- DIA: 486.86 vs. 487.01 (slightly lower).
- IWM: 252.61 vs. 252.71 (slightly lower).
Sector-wise, the early tilt favors technology while cyclicals are mixed:
- XLK is up modestly at 146.61 versus 146.30, aligning with news-driven optimism around AI infrastructure and chips. Recent pieces point to chip-sector consolidation after big gains (“time correction”) with potential for another rally; Nvidia remains a focal point, including a non-exclusive licensing arrangement with AI-chip maker Groq and forward-looking commentary on 2026 catalysts.
- XLF is essentially unchanged at 55.72 vs. 55.73, reflecting the relative calm in rates and a lack of fresh bank-specific catalysts in the morning flow.
- XLV is modestly lower at 155.58 vs. 155.80. Healthcare headlines include Novo Nordisk’s approval for an oral weight-loss drug, which sparked a relief rally in that stock per coverage, even as the broader sector shows early softness.
- XLE is slightly lower at 42.79 vs. 42.81. That matches weaker crude proxies at the open and comes despite reports of disruptions in parts of the global gas/oil complex.
Beyond indices, notable company narratives in the morning news flow span autos, chips, software, and media:
- Tesla’s AI and robotaxi focus remains central to its equity story, with coverage noting the stock finishing the year on a strong note and trading around record levels as investors weigh autonomous opportunities and regulatory headlines.
- Meta’s path following a heavy AI investment year raises questions about whether another “year of efficiency” is needed to reassure investors.
- ServiceNow is expanding into cybersecurity with the $7.75 billion acquisition of Armis as it builds an “AI control tower.”
- Alphabet is shoring up data center power access via an acquisition of Intersect, reflecting the AI power and infrastructure scramble that could shape capex and competitive positioning into 2026.
- In consumer and discretionary, Nike remains under scrutiny given a record losing streak backdrop but saw insider confidence signals, and was named a top pick by a major sell-side firm in separate coverage.
- Media remains in focus after reports that Larry Ellison personally guaranteed a substantial portion of financing for a potential Paramount bid for Warner Bros. Discovery, though transaction timelines and regulatory paths remain uncertain in the public discourse.
Bonds: slight bid across the curve
Treasuries continue to find modest support, as reflected by small gains in liquid ETFs:
- TLT 88.09 vs. 88.03 (+0.07%).
- IEF 96.49 vs. 96.35 (+0.14%).
- SHY 82.81 vs. 82.73 (+0.09%).
This aligns with a rates backdrop where the latest available 10‑year yield rests near 4.17%, with medium- and long-run inflation expectations anchored near the low-2s. With a firm labor market and solid Q3 GDP, fixed income remains sensitive to incremental growth or inflation surprises—but for now, volatility appears restrained, consistent with commentary that bond-market volatility has signaled a relative “all clear” for stocks.
Commodities: precious metals extend strength; oil eases, gas rallies
The standout movers into the open are precious metals:
- GLD trades at 416.22 vs. 411.93 prior, up about 1.0% and consistent with reports of record-chasing dynamics in gold.
- SLV is at 67.78 vs. 65.22, up roughly 3.9%, echoing commentary that silver has been among the hottest trades, with some calling for a speculative “mania phase.” Other voices caution that the pre-holiday surge in metals looked “unhinged,” underlining the risk of pullbacks should real rates or the dollar firm.
Energy is softer at the open despite geopolitics:
- USO is at 69.63 vs. 70.20 (about -0.8%).
- UNG is at 12.86 vs. 12.39 (about +3.8%).
The divergence likely reflects a combination of localized supply headlines and winter weather dynamics for gas usage, while crude stays more range-bound into year-end. Broader commodity exposure via DBC is slightly higher at 22.71 vs. 22.63.
FX and crypto: dollar steady, crypto little changed
The euro is fractionally higher versus the dollar at the open, with EURUSD near 1.179, modestly above its indicated open around 1.178. This steadiness coincides with commentary that the dollar may be bottoming technically into early 2026 after a difficult year, though near-term moves remain subdued.
Crypto is also quiet:
- BTCUSD marks around 88,915, essentially flat to slightly higher versus its indicated open near 88,901.
- ETHUSD sits near 2,975, up marginally versus a roughly 2,969 open.
While prices are little changed this morning, coverage reminds that 2025 was disappointing for crypto despite significant industry milestones, and attention may turn to policy signals in 2026.
Notable movers and themes from coverage
- Semiconductors: Several pieces highlight chip-sector consolidation after a powerful run, with technicals suggesting a pause rather than a peak. Nvidia’s licensing arrangement with Groq and 2026 catalysts (including model rollouts and data-center buildouts) keep AI semis in focus.
- AI infrastructure and power: Alphabet’s acquisition of Intersect underscores that electric power availability is becoming a bottleneck for AI buildouts. ServiceNow’s cybersecurity push (Armis acquisition) also ties into enterprise AI control and security.
- Autos and autonomy: Tesla’s 2025 finish centers on AI and robotaxis. Related coverage imagines broader societal impacts if autonomy scales by mid-century.
- Healthcare/weight-loss: Novo Nordisk’s oral weight-loss approval spurred buying in that stock per coverage, a reminder that anti-obesity drugs remain a major secular theme affecting consumer behavior and multiple industries.
- Defense and space: Huntington Ingalls’ new Navy frigate win propelled its shares to records earlier in the week, while AST SpaceMobile surged on deployment milestones, highlighting continued investor appetite for defense and space communications plays.
- Consumer and retail: Nike’s insider buying and research support juxtapose near-term stock pressure. Kroger expanded buybacks amid share weakness.
- Media: AMC’s ongoing pressure persisted earlier this week, including record lows, while the Paramount/Warner Bros. Discovery financing discussion keeps potential large-cap M&A in the spotlight.
Risks to the outlook
- Complacency: The “fear gauge” narrative points to investors feeling confident heading into 2026. Low volatility can reverse abruptly on macro or geopolitical shocks.
- Macro balance: Commentaries flagged the possibility of stagflationary pockets and a K-shaped consumer. A slowdown in AI investment could ripple into broader activity if capex moderates.
- Policy and regulation: Headlines around EV investigations, trade policies, and energy infrastructure (including pauses in offshore wind projects) highlight that regulatory paths can affect sector earnings power.
- Geopolitics and energy: Reports of strikes on energy infrastructure underscore supply risk. Winter weather and grid constraints can add volatility.
- Seasonal liquidity: Year-end positioning and lighter volumes can magnify price moves, both up and down.
What to watch next
- Rate sensitivity: Bond ETF tone versus the latest 10-year yield around 4.17%. Any shift in inflation expectations (1-year near 3.20%; 5- and 10-year near the low‑2s) could reprice duration and equities.
- Tech leadership durability: XLK’s early gain, semis’ “time correction,” and AI-related capex and power access stories (Alphabet/Intersect) remain pivotal for index-level outcomes given tech’s weight.
- Metals momentum: GLD’s and SLV’s strong opens versus cautions about froth. Watch for correlation with real yields and the dollar.
- Energy dispersion: Gas strength (UNG) versus oil softness (USO) into winter weather and geopolitical headlines.
- Company-specific catalysts: Follow-through on ServiceNow’s Armis deal, updates around chip licensing dynamics, and ongoing media M&A chatter.
- Seasonals and positioning: With commentary emphasizing the Santa Claus rally and Dec. 26’s historically favorable skew, monitor whether flows sustain into the last few sessions or fade on profit-taking.
Bottom line
The market opens with a modestly risk-on tilt: large-cap tech is leading, bonds are firmer, and precious metals are advancing again. The macro mix—contained medium- and long-run inflation expectations, stable growth signals, and calm rates—supports the constructive tone, but several voices warn that low implied volatility may belie latent risks. Into year-end, leadership concentration around AI, semis, and select software remains the swing factor for indices, while metals and energy offer alternative expressions of the macro debate. Staying balanced between cyclicals and duration, and remaining attentive to position-driven moves in a thinly traded holiday tape, looks prudent as investors set up for 2026.
Overview
U.S. markets opened the final Friday of the year on a steady footing, with a modest positive tone across large-cap benchmarks and ongoing leadership from technology. The S&P 500 proxy SPY is trading at 690.49 just after the opening bell, a touch above Wednesday’s close of 690.38. The Nasdaq-100 tracker QQQ is firmer at 624.74 versus a 623.93 prior close, while the Dow’s DIA is slightly softer at 486.86 versus 487.01. Small caps are fractionally lower, with IWM at 252.61 from 252.71. Early action thus reflects a continuation of the seasonal Santa Claus rally narratives highlighted in recent coverage, but with a selective tone and mixed breadth at the open.
The macro backdrop remains a key anchor: Treasury yields most recently stood with the 10-year at 4.17%, 2-year at 3.44%, 5-year at 3.71%, and 30-year at 4.84% (as of 12/22). Inflation expectations from December sit around 3.20% for one year, 2.42% at five years, and near 2.34% at ten years, implying longer-run anchors remain close to the low 2s. This mix—moderating medium- and long-term inflation expectations alongside policy-sensitive yields below recent peaks—has coincided with firmer bond ETFs this morning and supportive risk sentiment, even as several commentaries warn of complacency into 2026.
Macro backdrop: growth, inflation, yields
Recent economic updates in the news flow have been mixed but broadly constructive for risk assets. A delayed report showed U.S. real GDP grew at a 4.3% annualized pace in Q3, the strongest in two years, buoyed by consumer spending. Weekly jobless claims also remain low by historical standards, consistent with a labor market that, while cooler than earlier in the cycle, continues to avoid a sharp deterioration. Against that, several pieces flagged risks around stagflationary pockets and an uneven, “K‑shaped” consumer, reminding investors that 2026 momentum may depend on steady AI-related investment and the durability of consumer demand.
From a price-stability lens, the latest CPI index readings (headline CPI level 325.031 in November; core 331.068) and model-based inflation expectations (one‑year ~3.20%, five‑year ~2.42%, ten‑year ~2.34%, thirty‑year ~2.44%) suggest the market continues to lean toward disinflation over the medium term. The Treasury curve levels from earlier this week—10‑year at 4.17% and 2‑year at 3.44%—imply the front end is not signaling imminent re-acceleration fears. That tone is reflected in modest strength across duration this morning: TLT is at 88.09 (vs. 88.03 prior close), IEF at 96.49 (vs. 96.35), and SHY at 82.81 (vs. 82.73).
The combination of contained inflation expectations, steady growth signals, and less volatile rates markets has underpinned risk appetite—echoed by commentary noting low implied equity volatility and the historical tendency for late-December strength. Still, coverage also highlights the risk that investors are overlooking potential shocks as they look into 2026, a caution worth keeping in mind as positioning and liquidity can amplify moves around year-end.
Equities and sectors: tech steadies leadership; energy softens
- SPY: 690.49 vs. 690.38 previous close (marginally higher).
- QQQ: 624.74 vs. 623.93 (firmer; tech leadership evident).
- DIA: 486.86 vs. 487.01 (slightly lower).
- IWM: 252.61 vs. 252.71 (slightly lower).
Sector-wise, the early tilt favors technology while cyclicals are mixed:
- XLK is up modestly at 146.61 versus 146.30, aligning with news-driven optimism around AI infrastructure and chips. Recent pieces point to chip-sector consolidation after big gains (“time correction”) with potential for another rally; Nvidia remains a focal point, including a non-exclusive licensing arrangement with AI-chip maker Groq and forward-looking commentary on 2026 catalysts.
- XLF is essentially unchanged at 55.72 vs. 55.73, reflecting the relative calm in rates and a lack of fresh bank-specific catalysts in the morning flow.
- XLV is modestly lower at 155.58 vs. 155.80. Healthcare headlines include Novo Nordisk’s approval for an oral weight-loss drug, which sparked a relief rally in that stock per coverage, even as the broader sector shows early softness.
- XLE is slightly lower at 42.79 vs. 42.81. That matches weaker crude proxies at the open and comes despite reports of disruptions in parts of the global gas/oil complex.
Beyond indices, notable company narratives in the morning news flow span autos, chips, software, and media:
- Tesla’s AI and robotaxi focus remains central to its equity story, with coverage noting the stock finishing the year on a strong note and trading around record levels as investors weigh autonomous opportunities and regulatory headlines.
- Meta’s path following a heavy AI investment year raises questions about whether another “year of efficiency” is needed to reassure investors.
- ServiceNow is expanding into cybersecurity with the $7.75 billion acquisition of Armis as it builds an “AI control tower.”
- Alphabet is shoring up data center power access via an acquisition of Intersect, reflecting the AI power and infrastructure scramble that could shape capex and competitive positioning into 2026.
- In consumer and discretionary, Nike remains under scrutiny given a record losing streak backdrop but saw insider confidence signals, and was named a top pick by a major sell-side firm in separate coverage.
- Media remains in focus after reports that Larry Ellison personally guaranteed a substantial portion of financing for a potential Paramount bid for Warner Bros. Discovery, though transaction timelines and regulatory paths remain uncertain in the public discourse.
Bonds: slight bid across the curve
Treasuries continue to find modest support, as reflected by small gains in liquid ETFs:
- TLT 88.09 vs. 88.03 (+0.07%).
- IEF 96.49 vs. 96.35 (+0.14%).
- SHY 82.81 vs. 82.73 (+0.09%).
This aligns with a rates backdrop where the latest available 10‑year yield rests near 4.17%, with medium- and long-run inflation expectations anchored near the low-2s. With a firm labor market and solid Q3 GDP, fixed income remains sensitive to incremental growth or inflation surprises—but for now, volatility appears restrained, consistent with commentary that bond-market volatility has signaled a relative “all clear” for stocks.
Commodities: precious metals extend strength; oil eases, gas rallies
The standout movers into the open are precious metals:
- GLD trades at 416.22 vs. 411.93 prior, up about 1.0% and consistent with reports of record-chasing dynamics in gold.
- SLV is at 67.78 vs. 65.22, up roughly 3.9%, echoing commentary that silver has been among the hottest trades, with some calling for a speculative “mania phase.” Other voices caution that the pre-holiday surge in metals looked “unhinged,” underlining the risk of pullbacks should real rates or the dollar firm.
Energy is softer at the open despite geopolitics:
- USO is at 69.63 vs. 70.20 (about -0.8%).
- UNG is at 12.86 vs. 12.39 (about +3.8%).
The divergence likely reflects a combination of localized supply headlines and winter weather dynamics for gas usage, while crude stays more range-bound into year-end. Broader commodity exposure via DBC is slightly higher at 22.71 vs. 22.63.
FX and crypto: dollar steady, crypto little changed
The euro is fractionally higher versus the dollar at the open, with EURUSD near 1.179, modestly above its indicated open around 1.178. This steadiness coincides with commentary that the dollar may be bottoming technically into early 2026 after a difficult year, though near-term moves remain subdued.
Crypto is also quiet:
- BTCUSD marks around 88,915, essentially flat to slightly higher versus its indicated open near 88,901.
- ETHUSD sits near 2,975, up marginally versus a roughly 2,969 open.
While prices are little changed this morning, coverage reminds that 2025 was disappointing for crypto despite significant industry milestones, and attention may turn to policy signals in 2026.
Notable movers and themes from coverage
- Semiconductors: Several pieces highlight chip-sector consolidation after a powerful run, with technicals suggesting a pause rather than a peak. Nvidia’s licensing arrangement with Groq and 2026 catalysts (including model rollouts and data-center buildouts) keep AI semis in focus.
- AI infrastructure and power: Alphabet’s acquisition of Intersect underscores that electric power availability is becoming a bottleneck for AI buildouts. ServiceNow’s cybersecurity push (Armis acquisition) also ties into enterprise AI control and security.
- Autos and autonomy: Tesla’s 2025 finish centers on AI and robotaxis. Related coverage imagines broader societal impacts if autonomy scales by mid-century.
- Healthcare/weight-loss: Novo Nordisk’s oral weight-loss approval spurred buying in that stock per coverage, a reminder that anti-obesity drugs remain a major secular theme affecting consumer behavior and multiple industries.
- Defense and space: Huntington Ingalls’ new Navy frigate win propelled its shares to records earlier in the week, while AST SpaceMobile surged on deployment milestones, highlighting continued investor appetite for defense and space communications plays.
- Consumer and retail: Nike’s insider buying and research support juxtapose near-term stock pressure. Kroger expanded buybacks amid share weakness.
- Media: AMC’s ongoing pressure persisted earlier this week, including record lows, while the Paramount/Warner Bros. Discovery financing discussion keeps potential large-cap M&A in the spotlight.
Risks to the outlook
- Complacency: The “fear gauge” narrative points to investors feeling confident heading into 2026. Low volatility can reverse abruptly on macro or geopolitical shocks.
- Macro balance: Commentaries flagged the possibility of stagflationary pockets and a K-shaped consumer. A slowdown in AI investment could ripple into broader activity if capex moderates.
- Policy and regulation: Headlines around EV investigations, trade policies, and energy infrastructure (including pauses in offshore wind projects) highlight that regulatory paths can affect sector earnings power.
- Geopolitics and energy: Reports of strikes on energy infrastructure underscore supply risk. Winter weather and grid constraints can add volatility.
- Seasonal liquidity: Year-end positioning and lighter volumes can magnify price moves, both up and down.
What to watch next
- Rate sensitivity: Bond ETF tone versus the latest 10-year yield around 4.17%. Any shift in inflation expectations (1-year near 3.20%; 5- and 10-year near the low‑2s) could reprice duration and equities.
- Tech leadership durability: XLK’s early gain, semis’ “time correction,” and AI-related capex and power access stories (Alphabet/Intersect) remain pivotal for index-level outcomes given tech’s weight.
- Metals momentum: GLD’s and SLV’s strong opens versus cautions about froth. Watch for correlation with real yields and the dollar.
- Energy dispersion: Gas strength (UNG) versus oil softness (USO) into winter weather and geopolitical headlines.
- Company-specific catalysts: Follow-through on ServiceNow’s Armis deal, updates around chip licensing dynamics, and ongoing media M&A chatter.
- Seasonals and positioning: With commentary emphasizing the Santa Claus rally and Dec. 26’s historically favorable skew, monitor whether flows sustain into the last few sessions or fade on profit-taking.
Bottom line
The market opens with a modestly risk-on tilt: large-cap tech is leading, bonds are firmer, and precious metals are advancing again. The macro mix—contained medium- and long-run inflation expectations, stable growth signals, and calm rates—supports the constructive tone, but several voices warn that low implied volatility may belie latent risks. Into year-end, leadership concentration around AI, semis, and select software remains the swing factor for indices, while metals and energy offer alternative expressions of the macro debate. Staying balanced between cyclicals and duration, and remaining attentive to position-driven moves in a thinly traded holiday tape, looks prudent as investors set up for 2026.