State of Market: Open 01/09/26
Stocks edge higher at the open as softer jobs tone supports rate-cut hopes; small caps lead, metals rally
Treasury 10-year holds near 4.15% with inflation expectations anchored; SPY, QQQ, DIA up modestly while IWM outperforms; gold and silver advance, oil inches higher, crypto slips
TendieTensor.com State of Market Open
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Equities opened Friday on firmer footing after a softer tone in December jobs data bolstered the case for additional Federal Reserve rate cuts. At the open, the S&P 500 proxy SPY traded at 690.81 versus a prior close of 689.51, a modest gain. The Nasdaq-100 tracker QQQ printed 621.05 compared with 620.47 previously, while the Dow industrials proxy DIA traded at 493.43 compared with 492.53 on Thursday. Small caps led early, with IWM at 259.77 versus 258.27 previously, an outperformance that aligns with recent signs of a broadening rally across the market.
The macro backdrop remains supportive: policy-sensitive yields are subdued relative to late-2023 peaks, and survey- and market-based inflation expectations are steady near the Fed’s target zone beyond one year. The 10-year Treasury yield sits at 4.15%, above the 2-year at 3.47% and the 5-year at 3.70%, while the long bond (30-year) is at 4.82%. This curve configuration—10s meaningfully above 2s—signals an ongoing normalization theme as markets price a path toward easier policy in 2026.
Macro and policy context
• Treasury yields: As of the latest reading, the curve is anchored with 2-year at 3.47%, 5-year at 3.70%, 10-year at 4.15%, and 30-year at 4.82%. The mild back-up versus the front end suggests markets are balancing disinflation progress against supply and fiscal dynamics further out the curve.
• Inflation: Headline CPI (index level) for November stands at 325.031 with core CPI at 331.068. While these are level measures rather than monthly changes, they sit alongside market-implied inflation expectations that remain contained.
• Inflation expectations: Model-based 1-year inflation is 3.20%, while market-implied 5-year and 10-year breakevens are 2.28% and 2.24%, respectively; the 5y5y forward is 2.21%. Longer-horizon model measures cluster around the mid-2s. Together, these figures imply that near-term disinflation still has work to do, but medium-term expectations remain anchored near the Fed’s objective.
• Labor and policy headlines: Equities were “headed for a higher open after tepid December jobs growth data supported the case for more Fed interest rate cuts,” according to reporting this morning. Markets will parse the details as they arrive and consider how they intersect with active policy proposals, including the administration’s directive for $200 billion of mortgage-bond purchases that could aim to lower mortgage rates by lifting agency MBS demand.
Equities and sectors: breadth improves as leadership rotates
The opening tape reflects a continuation of the broadening theme noted in recent sessions. SPY and DIA are modestly higher, while IWM outperforms, a pattern consistent with investor rotation from last year’s mega-cap winners into previously lagging areas. Commentary highlighted a rotation “punishing last year’s winners and reviving beaten-down stocks,” and separate analysis noted that the U.S. market has risen year-to-date even as some large-cap tech names faded early in 2026—both signs of healthier breadth.
By sector ETFs among those quoted this morning, Financials (XLF) trade at 56.00 versus 55.90 previously, Technology (XLK) at 144.52 versus 144.24, and Health Care (XLV) at 158.42 versus 158.12. Each shows a small gain at the open. An additional listed sector fund in the feed shows a last trade of 42.585 versus 41.99 previously, also indicating early strength.
Company and theme highlights from the news flow
• Semiconductors/compute: Intel (INTC) shares rose in extended trading after the President praised the company and its CEO; the semiconductor complex was said to be boosted by that commentary. Separate coverage this week argued that Big Tech valuations have become more attractive on forward metrics even after recent pullbacks. Meanwhile, a strategist cautioned that the AI investment boom could face a test in 2026—underscoring the need to separate durable earnings power from hype.
• AI platforms and enablers: A piece highlighting Alphabet’s (GOOGL) AI advantages framed the company as a continuing leader in 2026, while another noted that Amazon (AMZN) and several peers could be key beneficiaries of the next phase of the AI trade, centered on autonomous agents. These views fit the early-session move in XLK, though the day’s rotation continues to favor smaller and cyclical names at the margin.
• Cybersecurity: CrowdStrike (CRWD) “broke its win streak” Thursday, though a separate take suggested the bottom may be in for cyber stocks, citing improvements in both fundamentals and technicals with CrowdStrike and Palo Alto Networks (PANW) each up roughly 5% in an early 2026 rally session earlier in the week. The mixed tone leaves near-term direction tied to execution and guidance updates during the coming earnings season.
• Energy and power: Oil policy remains in focus. Articles discussed how the administration’s Venezuela posture could influence global supply and prices and even targeted a $50 oil aspiration—though U.S. drillers may not cooperate at that level. On the corporate side, defense-related energy demands intersect with data-center power trends: one analysis flagged that new, more efficient racks from Nvidia (NVDA) could reduce demand for certain liquid-cooling solutions, pressuring some power-exposed names. Early trading shows USO at 70.88 versus 70.54 previously, modestly higher, while natural gas (UNG) is softer.
• Defense: Defense equities experienced headline-driven volatility this week. Shares of Lockheed Martin (LMT) and Northrop Grumman (NOC) “dove” after a proposal to restrict dividends and buybacks, before the group rebounded on a pledge to raise the military budget by 50%. ETFs targeting the space have outperformed the S&P 500 so far in 2026, but the whipsaw illustrates policy sensitivity.
• Retail and consumer: Costco (COST) “woke up” on strong December sales. Nike (NKE) faced a downgrade on a “longer than expected” turnaround and China challenges. New federal nutrition guidelines critical of ultra-processed foods weighed on staple names such as Kraft Heinz (KHC), Mondelez (MDLZ), and PepsiCo (PEP).
• Autos and mobility: General Motors (GM) recorded another EV-related write-down amid a sector pivot, even as a separate analyst upgrade turned more constructive on legacy OEMs as they recalibrate EV strategies. Ford (F) outlined a path toward eyes-off driving tech for a $30,000 EV starting in 2028.
• Housing finance: The directive for Fannie Mae (FNMA) and Freddie Mac (FMCC) to buy $200 billion of mortgage securities was interpreted as a blow to privatization hopes, though other scenarios could still support the stocks. The policy aim—to lower mortgage rates—intersects with a separate trend: more homeowners now hold mortgages above 6%, a shift that could gradually improve mobility and housing supply.
• Nuclear and infrastructure: Oklo (OKLO) rallied after Meta (META) signed its first major commercial agreement with the company—an emblematic signal for next-generation energy solutions aimed at the AI era’s power needs.
Bonds: light drift to start, consistent with contained inflation expectations
Treasuries are little changed in ETF terms at the open. The long-duration proxy TLT traded at 87.29 versus 87.35 previously, the 7–10 year proxy IEF at 96.18 versus 96.19, and the 1–3 year SHY at 82.87 versus 82.86. The combination of a 10-year yield at 4.15% and market breakevens in the low-2% range suggests real yields remain positive, offering a cushion for balanced portfolios while leaving duration sensitive to growth and supply headlines. For mortgage credit, any realized agency MBS purchase program would be a supportive demand shock, but details and timelines remain key.
Commodities: precious metals lead, oil up modestly, gas softer
Across commodities proxies, precious metals are firm. GLD trades at 412.85 versus 411.49 yesterday, and SLV at 71.31 versus 69.71, suggesting gold higher and silver outperforming. The broad commodity basket (DBC) is at 22.98 versus 22.88. Oil (USO) is higher at 70.88 versus 70.54, while natural gas (UNG) is lower at 11.05 versus 11.27. The composition—metals leading with oil steady to higher—fits a narrative of supportive real-asset hedges in the face of policy crosscurrents, while gas reflects seasonal and supply dynamics.
FX and crypto: dollar mixed vs euro; crypto eases
In FX, EURUSD marks at 1.1636, just below its open of 1.1648 in a tight pre-data range. Crypto is modestly lower: Bitcoin (BTCUSD) marks 90,511 versus an open of 90,938 with a session range of roughly 89,562 to 91,105, while Ether (ETHUSD) marks 3,092 versus an open of 3,114 with a 3,065 to 3,123 range. The dip is orderly and consistent with a mild risk-on tone in equities accompanied by stable rates.
Market structure and technical tone
Several commentators noted that while the S&P 500 recently stalled after setting new intraday highs, the lack of decisive follow-through is “not necessarily bearish” given evidence of broadening participation. The Dow’s strong start to the year—even amid a 466-point pullback midweek—illustrates the constructive role of financial and industrial leadership in 2026’s early innings. That breadth is validated by this morning’s outperformance in small caps and the incremental gains in XLF and XLV alongside Technology.
What to watch next
• Labor details: Wage growth, hours worked, and labor force participation within the December employment report will shape the path for policy and earnings margins. The headline tone was described as tepid; the internals will matter for services inflation and corporate guidance.
• Policy volatility: A potential Supreme Court ruling on tariffs and continued signals on defense and energy policy could drive sector dispersion, particularly in defense, industrials, and staples.
• Mortgage-market mechanics: Any additional clarity on the timing and mechanics of agency MBS purchases by government-sponsored entities will be critical for mortgage rates, housing activity, and bank balance-sheet dynamics.
• Earnings season: Guidance on AI spending, power needs, and efficiency payoffs will be pivotal for semis, hyperscalers, and energy infrastructure plays. Watch how management teams frame timelines for AI agent monetization and data-center cooling/power capital needs.
Risks
Key risks include policy execution risk (tariffs, housing, defense), potential reversal in breadth if mega-cap tech resumes leadership without earnings confirmation, and bond-market supply pressures that could nudge term premiums higher. Strategists also flagged the possibility that AI investment may slow in 2026, which could test valuations in select segments even if long-run adoption remains intact. For energy, geopolitical developments around Venezuela could destabilize supply expectations. In staples, evolving nutrition policy presents a headline risk to ultra-processed food makers.
Bottom line
The opening tone is constructive: smaller caps are leading, sector gains are broad if modest, and real assets—especially gold and silver—are firm. With the 10-year around 4.15% and inflation expectations anchored in the low-2s beyond the near term, the macro mix remains compatible with a gradual easing cycle. The near-term path will be set by the employment report’s internals, policy headlines on tariffs and housing finance, and early reads from corporate earnings on AI, power, and consumer demand. For now, the market is voting for breadth and balance over narrow leadership, with rotation and dispersion likely to remain the dominant themes into the next leg of 2026 trading.
Equities opened Friday on firmer footing after a softer tone in December jobs data bolstered the case for additional Federal Reserve rate cuts. At the open, the S&P 500 proxy SPY traded at 690.81 versus a prior close of 689.51, a modest gain. The Nasdaq-100 tracker QQQ printed 621.05 compared with 620.47 previously, while the Dow industrials proxy DIA traded at 493.43 compared with 492.53 on Thursday. Small caps led early, with IWM at 259.77 versus 258.27 previously, an outperformance that aligns with recent signs of a broadening rally across the market.
The macro backdrop remains supportive: policy-sensitive yields are subdued relative to late-2023 peaks, and survey- and market-based inflation expectations are steady near the Fed’s target zone beyond one year. The 10-year Treasury yield sits at 4.15%, above the 2-year at 3.47% and the 5-year at 3.70%, while the long bond (30-year) is at 4.82%. This curve configuration—10s meaningfully above 2s—signals an ongoing normalization theme as markets price a path toward easier policy in 2026.
Macro and policy context
• Treasury yields: As of the latest reading, the curve is anchored with 2-year at 3.47%, 5-year at 3.70%, 10-year at 4.15%, and 30-year at 4.82%. The mild back-up versus the front end suggests markets are balancing disinflation progress against supply and fiscal dynamics further out the curve.
• Inflation: Headline CPI (index level) for November stands at 325.031 with core CPI at 331.068. While these are level measures rather than monthly changes, they sit alongside market-implied inflation expectations that remain contained.
• Inflation expectations: Model-based 1-year inflation is 3.20%, while market-implied 5-year and 10-year breakevens are 2.28% and 2.24%, respectively; the 5y5y forward is 2.21%. Longer-horizon model measures cluster around the mid-2s. Together, these figures imply that near-term disinflation still has work to do, but medium-term expectations remain anchored near the Fed’s objective.
• Labor and policy headlines: Equities were “headed for a higher open after tepid December jobs growth data supported the case for more Fed interest rate cuts,” according to reporting this morning. Markets will parse the details as they arrive and consider how they intersect with active policy proposals, including the administration’s directive for $200 billion of mortgage-bond purchases that could aim to lower mortgage rates by lifting agency MBS demand.
Equities and sectors: breadth improves as leadership rotates
The opening tape reflects a continuation of the broadening theme noted in recent sessions. SPY and DIA are modestly higher, while IWM outperforms, a pattern consistent with investor rotation from last year’s mega-cap winners into previously lagging areas. Commentary highlighted a rotation “punishing last year’s winners and reviving beaten-down stocks,” and separate analysis noted that the U.S. market has risen year-to-date even as some large-cap tech names faded early in 2026—both signs of healthier breadth.
By sector ETFs among those quoted this morning, Financials (XLF) trade at 56.00 versus 55.90 previously, Technology (XLK) at 144.52 versus 144.24, and Health Care (XLV) at 158.42 versus 158.12. Each shows a small gain at the open. An additional listed sector fund in the feed shows a last trade of 42.585 versus 41.99 previously, also indicating early strength.
Company and theme highlights from the news flow
• Semiconductors/compute: Intel (INTC) shares rose in extended trading after the President praised the company and its CEO; the semiconductor complex was said to be boosted by that commentary. Separate coverage this week argued that Big Tech valuations have become more attractive on forward metrics even after recent pullbacks. Meanwhile, a strategist cautioned that the AI investment boom could face a test in 2026—underscoring the need to separate durable earnings power from hype.
• AI platforms and enablers: A piece highlighting Alphabet’s (GOOGL) AI advantages framed the company as a continuing leader in 2026, while another noted that Amazon (AMZN) and several peers could be key beneficiaries of the next phase of the AI trade, centered on autonomous agents. These views fit the early-session move in XLK, though the day’s rotation continues to favor smaller and cyclical names at the margin.
• Cybersecurity: CrowdStrike (CRWD) “broke its win streak” Thursday, though a separate take suggested the bottom may be in for cyber stocks, citing improvements in both fundamentals and technicals with CrowdStrike and Palo Alto Networks (PANW) each up roughly 5% in an early 2026 rally session earlier in the week. The mixed tone leaves near-term direction tied to execution and guidance updates during the coming earnings season.
• Energy and power: Oil policy remains in focus. Articles discussed how the administration’s Venezuela posture could influence global supply and prices and even targeted a $50 oil aspiration—though U.S. drillers may not cooperate at that level. On the corporate side, defense-related energy demands intersect with data-center power trends: one analysis flagged that new, more efficient racks from Nvidia (NVDA) could reduce demand for certain liquid-cooling solutions, pressuring some power-exposed names. Early trading shows USO at 70.88 versus 70.54 previously, modestly higher, while natural gas (UNG) is softer.
• Defense: Defense equities experienced headline-driven volatility this week. Shares of Lockheed Martin (LMT) and Northrop Grumman (NOC) “dove” after a proposal to restrict dividends and buybacks, before the group rebounded on a pledge to raise the military budget by 50%. ETFs targeting the space have outperformed the S&P 500 so far in 2026, but the whipsaw illustrates policy sensitivity.
• Retail and consumer: Costco (COST) “woke up” on strong December sales. Nike (NKE) faced a downgrade on a “longer than expected” turnaround and China challenges. New federal nutrition guidelines critical of ultra-processed foods weighed on staple names such as Kraft Heinz (KHC), Mondelez (MDLZ), and PepsiCo (PEP).
• Autos and mobility: General Motors (GM) recorded another EV-related write-down amid a sector pivot, even as a separate analyst upgrade turned more constructive on legacy OEMs as they recalibrate EV strategies. Ford (F) outlined a path toward eyes-off driving tech for a $30,000 EV starting in 2028.
• Housing finance: The directive for Fannie Mae (FNMA) and Freddie Mac (FMCC) to buy $200 billion of mortgage securities was interpreted as a blow to privatization hopes, though other scenarios could still support the stocks. The policy aim—to lower mortgage rates—intersects with a separate trend: more homeowners now hold mortgages above 6%, a shift that could gradually improve mobility and housing supply.
• Nuclear and infrastructure: Oklo (OKLO) rallied after Meta (META) signed its first major commercial agreement with the company—an emblematic signal for next-generation energy solutions aimed at the AI era’s power needs.
Bonds: light drift to start, consistent with contained inflation expectations
Treasuries are little changed in ETF terms at the open. The long-duration proxy TLT traded at 87.29 versus 87.35 previously, the 7–10 year proxy IEF at 96.18 versus 96.19, and the 1–3 year SHY at 82.87 versus 82.86. The combination of a 10-year yield at 4.15% and market breakevens in the low-2% range suggests real yields remain positive, offering a cushion for balanced portfolios while leaving duration sensitive to growth and supply headlines. For mortgage credit, any realized agency MBS purchase program would be a supportive demand shock, but details and timelines remain key.
Commodities: precious metals lead, oil up modestly, gas softer
Across commodities proxies, precious metals are firm. GLD trades at 412.85 versus 411.49 yesterday, and SLV at 71.31 versus 69.71, suggesting gold higher and silver outperforming. The broad commodity basket (DBC) is at 22.98 versus 22.88. Oil (USO) is higher at 70.88 versus 70.54, while natural gas (UNG) is lower at 11.05 versus 11.27. The composition—metals leading with oil steady to higher—fits a narrative of supportive real-asset hedges in the face of policy crosscurrents, while gas reflects seasonal and supply dynamics.
FX and crypto: dollar mixed vs euro; crypto eases
In FX, EURUSD marks at 1.1636, just below its open of 1.1648 in a tight pre-data range. Crypto is modestly lower: Bitcoin (BTCUSD) marks 90,511 versus an open of 90,938 with a session range of roughly 89,562 to 91,105, while Ether (ETHUSD) marks 3,092 versus an open of 3,114 with a 3,065 to 3,123 range. The dip is orderly and consistent with a mild risk-on tone in equities accompanied by stable rates.
Market structure and technical tone
Several commentators noted that while the S&P 500 recently stalled after setting new intraday highs, the lack of decisive follow-through is “not necessarily bearish” given evidence of broadening participation. The Dow’s strong start to the year—even amid a 466-point pullback midweek—illustrates the constructive role of financial and industrial leadership in 2026’s early innings. That breadth is validated by this morning’s outperformance in small caps and the incremental gains in XLF and XLV alongside Technology.
What to watch next
• Labor details: Wage growth, hours worked, and labor force participation within the December employment report will shape the path for policy and earnings margins. The headline tone was described as tepid; the internals will matter for services inflation and corporate guidance.
• Policy volatility: A potential Supreme Court ruling on tariffs and continued signals on defense and energy policy could drive sector dispersion, particularly in defense, industrials, and staples.
• Mortgage-market mechanics: Any additional clarity on the timing and mechanics of agency MBS purchases by government-sponsored entities will be critical for mortgage rates, housing activity, and bank balance-sheet dynamics.
• Earnings season: Guidance on AI spending, power needs, and efficiency payoffs will be pivotal for semis, hyperscalers, and energy infrastructure plays. Watch how management teams frame timelines for AI agent monetization and data-center cooling/power capital needs.
Risks
Key risks include policy execution risk (tariffs, housing, defense), potential reversal in breadth if mega-cap tech resumes leadership without earnings confirmation, and bond-market supply pressures that could nudge term premiums higher. Strategists also flagged the possibility that AI investment may slow in 2026, which could test valuations in select segments even if long-run adoption remains intact. For energy, geopolitical developments around Venezuela could destabilize supply expectations. In staples, evolving nutrition policy presents a headline risk to ultra-processed food makers.
Bottom line
The opening tone is constructive: smaller caps are leading, sector gains are broad if modest, and real assets—especially gold and silver—are firm. With the 10-year around 4.15% and inflation expectations anchored in the low-2s beyond the near term, the macro mix remains compatible with a gradual easing cycle. The near-term path will be set by the employment report’s internals, policy headlines on tariffs and housing finance, and early reads from corporate earnings on AI, power, and consumer demand. For now, the market is voting for breadth and balance over narrow leadership, with rotation and dispersion likely to remain the dominant themes into the next leg of 2026 trading.