State of Market: Close 12/24/25
Stocks extend holiday climb into Christmas Eve; bonds firm, metals diverge, dollar steadies
S&P 500 sets a Christmas Eve record as the seasonal 'Santa Claus rally' arrives; long-end yields near 4.17% anchor a supportive macro mix while gold cools and silver advances
TendieTensor.com State of Market Close
•
Overview
U.S. markets closed the Christmas Eve session with a constructive tone across major equity benchmarks and most sectors, supported by a steady macro backdrop and firm bond prices. Broad ETFs posted incremental gains: SPY finished at 690.28 versus 687.96 previously (+0.34%), QQQ closed at 623.94 versus 622.11 (+0.29%), DIA at 486.97 versus 484.23 (+0.57%), and IWM at 252.70 versus 252.08 (+0.25%). The risk-on tilt aligns with seasonal dynamics highlighted in coverage of the “Santa Claus rally,” which MarketWatch notes typically extends through the first two trading days of the new year. Separately, MarketWatch also reported the S&P 500 set a Christmas Eve record for the first time in more than a decade, underscoring strong year-end momentum.
Macro backdrop: yields, inflation, and expectations
Treasury yields provide a relatively benign backdrop for risk assets. As of the most recent available data, the 2-year sits near 3.44%, the 5-year at 3.71%, the 10-year at 4.17%, and the 30-year at 4.84%. With the 10-year yield above the 2-year, the curve is positively sloped between these tenors, a configuration often associated with expectations for stable to modestly improving growth dynamics. That picture is consistent with fresh data on U.S. activity: a delayed government report cited by CNBC showed third-quarter GDP grew at a 4.3% annualized rate, driven by solid consumer spending.
Inflation readings remain a focal point. The latest CPI index level (November) is 325.031 and core CPI is 331.068. While these are index levels rather than growth rates, inflation expectations help contextualize the outlook: model-based expectations sit at 3.20% for 1-year, 2.42% for 5-year, and 2.34% for 10-year horizons, with the 30-year at 2.44%. In plain terms, markets anticipate above-target inflation in the very near term but a return toward the low-to-mid 2% range over the medium and long term. That anchoring likely contributes to today’s calm cross-asset tone.
Labor market signals also lean supportive. MarketWatch reported initial jobless claims have fallen again, running even lower than last year, a sign that layoffs remain contained. Combined with the GDP snapshot, the growth-inflation mix remains consistent with a soft-landing narrative into year-end, notwithstanding debates in coverage—such as Apollo’s economist warning of a potential stagflationary stretch before reacceleration—that remind investors to avoid complacency.
Equities: breadth into year-end
- SPY +0.34% (690.28 vs. 687.96): The large-cap benchmark’s advance comes alongside reports that the S&P 500 set a Christmas Eve record, reinforcing seasonal strength.
- QQQ +0.29% (623.94 vs. 622.11): Mega-cap growth and technology exposure participated, albeit in a measured way.
- DIA +0.57% (486.97 vs. 484.23): Dow-linked shares outperformed the broader tape, adding to the market’s holiday resilience.
- IWM +0.25% (252.70 vs. 252.08): Small caps gained, extending the positive breadth.
Sector performance was mostly constructive:
- XLK +0.25% (146.31 vs. 145.95): Technology edged higher. On the corporate front, ServiceNow agreed to acquire Armis for $7.75 billion to broaden cybersecurity capabilities and build an “AI control tower,” a deal that supports the ongoing enterprise AI/cybersecurity theme highlighted in recent coverage. Market commentary also debated whether large platforms may pivot from heavy AI spending toward tighter efficiency, emphasizing the focus on monetization.
- XLF +0.51% (55.71 vs. 55.43): Financials gained modestly. With the 10-year yield above the 2-year, the term structure is conducive to stable net interest margins, though today’s move can be assessed simply as participation in the broad holiday rally.
- XLE +0.47% (42.82 vs. 42.62): Energy inched higher despite a slight downtick in oil proxies, reflecting a steady risk backdrop.
- XLV +0.50% (155.76 vs. 154.99): Health care advanced. In related news flow, MarketWatch highlighted that Novo Nordisk secured first-mover status with an oral weight-loss drug, contributing to ongoing investor focus on the obesity-treatment category.
Notable corporate headlines
- ServiceNow/Armis: MarketWatch reported ServiceNow’s $7.75 billion acquisition of Armis to strengthen cybersecurity for AI workloads. The move underscores active dealmaking in software and critical infrastructure for AI—an incremental positive data point for enterprise tech demand and the security stack.
- Honeywell: MarketWatch noted Honeywell flagged a $470 million settlement related to the Flexjet lawsuit and lowered its profit outlook. While we don’t have sector ETF data for industrials in this payload, the headline is a reminder that idiosyncratic legal and guidance issues remain live even into the year-end tape.
- Tesla and autonomy: Two MarketWatch pieces spotlighted Tesla—a regulatory probe into Model 3 doors and continued investor focus on robotaxis despite declining EV sales. While not a factor we quantify today, the autonomy theme remains a key narrative within growth and AI-adjacent transportation names.
- Precious metals discourse: Coverage remained divided. CNBC highlighted fresh highs earlier this week in gold and silver with scope to continue, while MarketWatch flagged a UBS strategist calling the pre-holiday run “unhinged,” and other commentary framed the surge as part of a “great debasement trade.” As discussed below, gold eased today while silver rose.
- Market tone and volatility: MarketWatch emphasized the VIX near cycle lows and a gauge of bond-market volatility signaling an “all clear” for equities. Such conditions can support a grind higher but also carry the risk of overconfidence if macro surprises materialize.
Bonds: prices firm, duration bid
Treasuries found support across the curve, reflected in higher prices for ETFs:
- TLT +0.59% (88.02 vs. 87.50)
- IEF +0.25% (96.34 vs. 96.10)
- SHY +0.07% (82.74 vs. 82.68)
The gains at the long end (TLT) are consistent with a 10-year yield around 4.17% and an outlook for anchored medium-term inflation expectations. The combination of decent growth data, subdued implied volatility, and contained medium-term inflation expectations remains a constructive mix for balanced portfolios into the holiday period.
Commodities: gold cools, silver up; energy mixed
- GLD -0.41% (411.93 vs. 413.64): After a notable pre-holiday run described in recent coverage, gold eased modestly today. The pullback is modest relative to the recent trend commentary and does little to change the broader narrative of strategic demand balanced against stable real-rate expectations.
- SLV +0.60% (65.23 vs. 64.84): Silver advanced, diverging from gold on the day and extending the positive tone highlighted earlier this week.
- USO -0.16% (70.19 vs. 70.30): Oil slipped slightly, a marginal move.
- UNG -3.91% (12.40 vs. 12.90): Natural-gas exposure declined more sharply, a reminder of the commodity’s inherent volatility.
- DBC roughly flat (-0.02% to 22.64): The broad commodity basket was little changed, consistent with cross-currents in energy and metals.
FX and crypto: dollar steadies, crypto ticks higher
- EURUSD 1.1780 (mark) versus 1.1804 (open): The euro edged lower intraday, signaling a modestly firmer dollar—directionally consistent with MarketWatch’s technical recap noting a late-year “golden cross” on the dollar index as a potential sign that headwinds are easing for the greenback.
- BTCUSD +0.48% (87,509.75 mark vs. 87,091.05 open): Bitcoin firmed modestly.
- ETHUSD +0.26% (2,941.79 mark vs. 2,934.12 open): Ether also ticked higher.
MarketWatch cautioned that despite industry milestones in 2025, digital assets had a difficult year and investors are looking for further policy clarity into 2026. Today’s mild gains fit a broader pattern of stabilization into the holidays rather than a decisive shift in trend.
Context and sentiment
Alongside the seasonal tailwinds, several articles emphasized low implied volatility in both equity and bond markets, historically associated with calmer trading and narrower daily ranges. At the same time, Morgan Stanley’s list of potential macro surprises and Apollo’s stagflation-to-reacceleration view argue for humility—especially with expectations largely anchored around soft-landing narratives. The new year will quickly test these assumptions with early macro prints and corporate preannouncements.
Outlook
Seasonally, MarketWatch reminds that the “Santa Claus rally” often carries through the first two trading days of January. The S&P 500’s Christmas Eve record supports the idea that positioning remains constructive into year-end. Macro data (low jobless claims, firm Q3 GDP) pairs with anchored long-term inflation expectations to frame a supportive backdrop. Still, dispersion beneath the surface (e.g., divergent moves in gold vs. silver, and notable single-name headlines in software, industrials, EVs, and health care) suggests investors should stay selective.
What to watch next
- Follow-through on the “Santa Claus rally” as the calendar flips to 2026, per MarketWatch’s seasonality analysis.
- Early-week liquidity conditions around the holiday period, which can amplify moves.
- The next read on jobless claims after the holiday, given the latest indication that layoffs remain low.
- Treasury term premium and long-end behavior relative to inflation expectations; TLT’s sensitivity will serve as a useful barometer.
- Precious-metals positioning after the pre-holiday surge debated in coverage; GLD’s modest dip versus SLV’s gain keeps the divergence in focus.
- Ongoing AI-driven M&A and investment in cybersecurity/infrastructure (e.g., the ServiceNow–Armis deal) and whether large-platform spending pivots toward tighter “efficiency.”
Risks
- Complacency: MarketWatch notes both equity and bond volatility gauges are subdued, which can leave markets vulnerable to negative surprises.
- Macro surprises: As Morgan Stanley cautioned, out-of-consensus macro developments could challenge the prevailing soft-landing view.
- Policy and regulation: Ongoing scrutiny in EVs (Tesla) and the evolving crypto policy landscape were highlighted; either can introduce headline risk.
- Growth mix: Apollo’s economist flagged a potential stagflationary stretch before reacceleration—if realized, that could pressure multiples and complicate sector leadership.
- Dollar dynamics: A firmer dollar—MarketWatch referenced a “golden cross”—could tighten financial conditions at the margin and weigh on commodities and non-U.S. earnings.
Bottom line
Into the Christmas Eve close, the market delivered a measured extension of the holiday upswing. Equities advanced across large caps, technology, value/cyclicals, and small caps, while bonds firmed and commodities were mixed. The macro mosaic—stable yields, anchored long-term inflation expectations, resilient labor signals, and robust Q3 growth—remains supportive. As investors transition into 2026, attention shifts to whether seasonal strength persists and how quickly fundamental catalysts—earnings revisions, macro prints, policy signals—assert themselves over thin holiday liquidity.
Overview
U.S. markets closed the Christmas Eve session with a constructive tone across major equity benchmarks and most sectors, supported by a steady macro backdrop and firm bond prices. Broad ETFs posted incremental gains: SPY finished at 690.28 versus 687.96 previously (+0.34%), QQQ closed at 623.94 versus 622.11 (+0.29%), DIA at 486.97 versus 484.23 (+0.57%), and IWM at 252.70 versus 252.08 (+0.25%). The risk-on tilt aligns with seasonal dynamics highlighted in coverage of the “Santa Claus rally,” which MarketWatch notes typically extends through the first two trading days of the new year. Separately, MarketWatch also reported the S&P 500 set a Christmas Eve record for the first time in more than a decade, underscoring strong year-end momentum.
Macro backdrop: yields, inflation, and expectations
Treasury yields provide a relatively benign backdrop for risk assets. As of the most recent available data, the 2-year sits near 3.44%, the 5-year at 3.71%, the 10-year at 4.17%, and the 30-year at 4.84%. With the 10-year yield above the 2-year, the curve is positively sloped between these tenors, a configuration often associated with expectations for stable to modestly improving growth dynamics. That picture is consistent with fresh data on U.S. activity: a delayed government report cited by CNBC showed third-quarter GDP grew at a 4.3% annualized rate, driven by solid consumer spending.
Inflation readings remain a focal point. The latest CPI index level (November) is 325.031 and core CPI is 331.068. While these are index levels rather than growth rates, inflation expectations help contextualize the outlook: model-based expectations sit at 3.20% for 1-year, 2.42% for 5-year, and 2.34% for 10-year horizons, with the 30-year at 2.44%. In plain terms, markets anticipate above-target inflation in the very near term but a return toward the low-to-mid 2% range over the medium and long term. That anchoring likely contributes to today’s calm cross-asset tone.
Labor market signals also lean supportive. MarketWatch reported initial jobless claims have fallen again, running even lower than last year, a sign that layoffs remain contained. Combined with the GDP snapshot, the growth-inflation mix remains consistent with a soft-landing narrative into year-end, notwithstanding debates in coverage—such as Apollo’s economist warning of a potential stagflationary stretch before reacceleration—that remind investors to avoid complacency.
Equities: breadth into year-end
- SPY +0.34% (690.28 vs. 687.96): The large-cap benchmark’s advance comes alongside reports that the S&P 500 set a Christmas Eve record, reinforcing seasonal strength.
- QQQ +0.29% (623.94 vs. 622.11): Mega-cap growth and technology exposure participated, albeit in a measured way.
- DIA +0.57% (486.97 vs. 484.23): Dow-linked shares outperformed the broader tape, adding to the market’s holiday resilience.
- IWM +0.25% (252.70 vs. 252.08): Small caps gained, extending the positive breadth.
Sector performance was mostly constructive:
- XLK +0.25% (146.31 vs. 145.95): Technology edged higher. On the corporate front, ServiceNow agreed to acquire Armis for $7.75 billion to broaden cybersecurity capabilities and build an “AI control tower,” a deal that supports the ongoing enterprise AI/cybersecurity theme highlighted in recent coverage. Market commentary also debated whether large platforms may pivot from heavy AI spending toward tighter efficiency, emphasizing the focus on monetization.
- XLF +0.51% (55.71 vs. 55.43): Financials gained modestly. With the 10-year yield above the 2-year, the term structure is conducive to stable net interest margins, though today’s move can be assessed simply as participation in the broad holiday rally.
- XLE +0.47% (42.82 vs. 42.62): Energy inched higher despite a slight downtick in oil proxies, reflecting a steady risk backdrop.
- XLV +0.50% (155.76 vs. 154.99): Health care advanced. In related news flow, MarketWatch highlighted that Novo Nordisk secured first-mover status with an oral weight-loss drug, contributing to ongoing investor focus on the obesity-treatment category.
Notable corporate headlines
- ServiceNow/Armis: MarketWatch reported ServiceNow’s $7.75 billion acquisition of Armis to strengthen cybersecurity for AI workloads. The move underscores active dealmaking in software and critical infrastructure for AI—an incremental positive data point for enterprise tech demand and the security stack.
- Honeywell: MarketWatch noted Honeywell flagged a $470 million settlement related to the Flexjet lawsuit and lowered its profit outlook. While we don’t have sector ETF data for industrials in this payload, the headline is a reminder that idiosyncratic legal and guidance issues remain live even into the year-end tape.
- Tesla and autonomy: Two MarketWatch pieces spotlighted Tesla—a regulatory probe into Model 3 doors and continued investor focus on robotaxis despite declining EV sales. While not a factor we quantify today, the autonomy theme remains a key narrative within growth and AI-adjacent transportation names.
- Precious metals discourse: Coverage remained divided. CNBC highlighted fresh highs earlier this week in gold and silver with scope to continue, while MarketWatch flagged a UBS strategist calling the pre-holiday run “unhinged,” and other commentary framed the surge as part of a “great debasement trade.” As discussed below, gold eased today while silver rose.
- Market tone and volatility: MarketWatch emphasized the VIX near cycle lows and a gauge of bond-market volatility signaling an “all clear” for equities. Such conditions can support a grind higher but also carry the risk of overconfidence if macro surprises materialize.
Bonds: prices firm, duration bid
Treasuries found support across the curve, reflected in higher prices for ETFs:
- TLT +0.59% (88.02 vs. 87.50)
- IEF +0.25% (96.34 vs. 96.10)
- SHY +0.07% (82.74 vs. 82.68)
The gains at the long end (TLT) are consistent with a 10-year yield around 4.17% and an outlook for anchored medium-term inflation expectations. The combination of decent growth data, subdued implied volatility, and contained medium-term inflation expectations remains a constructive mix for balanced portfolios into the holiday period.
Commodities: gold cools, silver up; energy mixed
- GLD -0.41% (411.93 vs. 413.64): After a notable pre-holiday run described in recent coverage, gold eased modestly today. The pullback is modest relative to the recent trend commentary and does little to change the broader narrative of strategic demand balanced against stable real-rate expectations.
- SLV +0.60% (65.23 vs. 64.84): Silver advanced, diverging from gold on the day and extending the positive tone highlighted earlier this week.
- USO -0.16% (70.19 vs. 70.30): Oil slipped slightly, a marginal move.
- UNG -3.91% (12.40 vs. 12.90): Natural-gas exposure declined more sharply, a reminder of the commodity’s inherent volatility.
- DBC roughly flat (-0.02% to 22.64): The broad commodity basket was little changed, consistent with cross-currents in energy and metals.
FX and crypto: dollar steadies, crypto ticks higher
- EURUSD 1.1780 (mark) versus 1.1804 (open): The euro edged lower intraday, signaling a modestly firmer dollar—directionally consistent with MarketWatch’s technical recap noting a late-year “golden cross” on the dollar index as a potential sign that headwinds are easing for the greenback.
- BTCUSD +0.48% (87,509.75 mark vs. 87,091.05 open): Bitcoin firmed modestly.
- ETHUSD +0.26% (2,941.79 mark vs. 2,934.12 open): Ether also ticked higher.
MarketWatch cautioned that despite industry milestones in 2025, digital assets had a difficult year and investors are looking for further policy clarity into 2026. Today’s mild gains fit a broader pattern of stabilization into the holidays rather than a decisive shift in trend.
Context and sentiment
Alongside the seasonal tailwinds, several articles emphasized low implied volatility in both equity and bond markets, historically associated with calmer trading and narrower daily ranges. At the same time, Morgan Stanley’s list of potential macro surprises and Apollo’s stagflation-to-reacceleration view argue for humility—especially with expectations largely anchored around soft-landing narratives. The new year will quickly test these assumptions with early macro prints and corporate preannouncements.
Outlook
Seasonally, MarketWatch reminds that the “Santa Claus rally” often carries through the first two trading days of January. The S&P 500’s Christmas Eve record supports the idea that positioning remains constructive into year-end. Macro data (low jobless claims, firm Q3 GDP) pairs with anchored long-term inflation expectations to frame a supportive backdrop. Still, dispersion beneath the surface (e.g., divergent moves in gold vs. silver, and notable single-name headlines in software, industrials, EVs, and health care) suggests investors should stay selective.
What to watch next
- Follow-through on the “Santa Claus rally” as the calendar flips to 2026, per MarketWatch’s seasonality analysis.
- Early-week liquidity conditions around the holiday period, which can amplify moves.
- The next read on jobless claims after the holiday, given the latest indication that layoffs remain low.
- Treasury term premium and long-end behavior relative to inflation expectations; TLT’s sensitivity will serve as a useful barometer.
- Precious-metals positioning after the pre-holiday surge debated in coverage; GLD’s modest dip versus SLV’s gain keeps the divergence in focus.
- Ongoing AI-driven M&A and investment in cybersecurity/infrastructure (e.g., the ServiceNow–Armis deal) and whether large-platform spending pivots toward tighter “efficiency.”
Risks
- Complacency: MarketWatch notes both equity and bond volatility gauges are subdued, which can leave markets vulnerable to negative surprises.
- Macro surprises: As Morgan Stanley cautioned, out-of-consensus macro developments could challenge the prevailing soft-landing view.
- Policy and regulation: Ongoing scrutiny in EVs (Tesla) and the evolving crypto policy landscape were highlighted; either can introduce headline risk.
- Growth mix: Apollo’s economist flagged a potential stagflationary stretch before reacceleration—if realized, that could pressure multiples and complicate sector leadership.
- Dollar dynamics: A firmer dollar—MarketWatch referenced a “golden cross”—could tighten financial conditions at the margin and weigh on commodities and non-U.S. earnings.
Bottom line
Into the Christmas Eve close, the market delivered a measured extension of the holiday upswing. Equities advanced across large caps, technology, value/cyclicals, and small caps, while bonds firmed and commodities were mixed. The macro mosaic—stable yields, anchored long-term inflation expectations, resilient labor signals, and robust Q3 growth—remains supportive. As investors transition into 2026, attention shifts to whether seasonal strength persists and how quickly fundamental catalysts—earnings revisions, macro prints, policy signals—assert themselves over thin holiday liquidity.