State of Market: Close 12/22/25
Stocks firm into the close as small caps lead; gold jumps, oil climbs, bonds ease
A steeper long end of the Treasury curve and anchored inflation expectations frame a risk-on Monday, with SPY, QQQ, DIA, and IWM all higher; GLD and USO advance while bond ETFs soften and the euro gains against the dollar.
TendieTensor.com State of Market Close
•
Overview
U.S. equities finished the holiday-shortened Monday session on a constructive note, with gains across the major index ETFs and leadership skewing toward smaller caps. The SPDR S&P 500 ETF (SPY) settled at 684.80, up about 0.6% from Friday’s close of 680.59. The Invesco QQQ Trust (QQQ) closed at 619.18, up roughly 0.35% from 617.05. Blue chips advanced as the SPDR Dow Jones Industrial Average ETF (DIA) ended at 483.39, up around 0.47% versus 481.15. The iShares Russell 2000 ETF (IWM) outperformed, finishing at 253.59, up about 1.12% from 250.79, pointing to broadening participation into year-end.
Sector performance was mixed to positive. Financials (XLF) gained about 0.9% to 55.32 from 54.84, Technology (XLK) added approximately 0.4% to 145.16 from 144.60, and Health Care (XLV) edged up about 0.2% to 155.28 from 154.94. Energy (XLE) lagged, slipping roughly 0.4% to 42.47 from 42.63 despite a supportive move in crude proxies.
In fixed income, long- and intermediate-duration Treasury ETFs pulled back as yields remained elevated on the long end of the curve. The iShares 20+ Year Treasury Bond ETF (TLT) dipped about 0.23% to 87.35 from 87.55. The iShares 7-10 Year Treasury Bond ETF (IEF) was off about 0.10% to 96.14 from 96.24, and the iShares 1-3 Year Treasury Bond ETF (SHY) eased roughly 0.05% to 82.72 from 82.76.
Commodities were a notable bright spot. The SPDR Gold Trust (GLD) jumped about 2.3% to 408.24 from 399.02, while the iShares Silver Trust (SLV) climbed around 2.5% to 62.47 from 60.93. Oil proxies also advanced: the United States Oil Fund (USO) rose approximately 2.5% to 69.74 from 68.03. Natural gas, however, weakened, with the United States Natural Gas Fund (UNG) down roughly 2.8% to 11.85 from 12.19. A broad commodity basket (DBC) slipped to 22.40 from 22.85.
FX and crypto painted a mixed picture. The euro strengthened against the dollar intraday, with EURUSD marked at 1.1754 versus an open of 1.1720. In digital assets, Bitcoin (BTCUSD) was modestly lower on the day, marked around 88,326 versus an open near 88,891. Ether (ETHUSD) was softer, near 2,977 versus an open around 3,039.
Macro backdrop: yields, inflation, and expectations
Treasury yields continue to show a positively sloped curve beyond the belly, with the 2-year at 3.46%, 5-year at 3.66%, 10-year at 4.12%, and 30-year at 4.80% (latest available: 12/18). The upward slope from 5s to 30s reinforces the idea that longer-term term premia and/or growth and inflation risk compensation remain embedded at the back end of the curve. Today’s modest declines in TLT, IEF, and SHY align with that backdrop, even as the day-to-day moves in yields were not provided.
On inflation, the November CPI print stands at 325.031, with core CPI at 331.068. Inflation expectations remain broadly anchored in the intermediate tenors: model-based expectations are 3.20% at one year, 2.42% at five years, 2.34% at ten years, and 2.44% at thirty years (12/01). This configuration is consistent with investors anticipating some fading of near-term inflation pressures toward the Federal Reserve’s longer-run objective range over time, even as the one-year horizon reflects residual price stickiness.
The narrative around recent inflation data remains nuanced. A CNBC report highlighted that the New York Fed’s John Williams characterized some “technical factors” as having pushed November’s CPI lower than it otherwise would have been. While no specific components were cited here, the takeaway for markets is that the apparent disinflation trend may have contained idiosyncratic elements. With equities up and longer duration bonds down today, risk markets appear comfortable leaning on medium-term inflation expectations that are anchored in the low-2s across five- to ten-year horizons, even as policymakers and investors debate the signal-to-noise within the latest CPI readings.
Equities and sectors
Breadth was solid into the close, led by small caps. SPY gained roughly 0.6% and QQQ about 0.35%, with DIA up 0.47%. The outperformance of IWM, up about 1.12%, suggests renewed interest in cyclicals and domestically oriented companies. Financials (XLF) rose around 0.9%, consistent with steeper long-end yields that can support net interest margins for banks. Technology (XLK) added about 0.4%, while Health Care (XLV) rose about 0.2%.
Energy (XLE) underperformed, slipping about 0.4% despite a 2.5% move higher in USO. The divergence can happen when equity-specific dynamics, positioning, or commodity curve structures exert more influence on sector equities than front-month oil proxies on a given day.
Articles provided additional color on stock-specific narratives. Nike (NKE) remained in focus. Headlines spanned a range of views: a Jefferies positive call naming Nike a top pick and commentary framing the recent post-earnings decline as a buying opportunity, counterbalanced by coverage noting that “investor worries remain” despite management describing the turnaround as in the “middle innings.” That mix helps explain why sentiment around NKE remains debated into year-end.
In technology, Alphabet (GOOGL) drew attention for an announced purchase of Intersect—framed as a strategic move to secure power for data centers amid rising AI-related energy constraints. A separate piece noted a bullish signal from prediction markets regarding Alphabet’s standing next year. Together, these headlines reinforce the market narrative that hyperscale cloud and AI infrastructure demand remains a secular driver, even as investors continue to parse near-term capital intensity and power availability constraints across the ecosystem.
The AI complex more broadly retained center stage. Reporting included supportive views on Nvidia (NVDA), with one analyst called out for describing the stock as “unusually cheap” relative to the broader chip sector. While individual AI beneficiaries can experience volatility, the positive skew in commentary offered a constructive tone for the group today.
Industrial and aerospace themes were active. FedEx (FDX) coverage underscored execution improvements and an outlook pointing to more profit as key businesses turn around, which the company characterized as reflective of the industrial economy’s health. In defense, Huntington Ingalls Industries (HII) extended gains tied to a U.S. Navy award for a new class of frigates, and Rocket Lab (RKLB) was highlighted for contract wins and execution milestones, supporting the ongoing strength in the space cohort—alongside reports of momentum at AST SpaceMobile (ASTS).
Elsewhere in tech, Oracle (ORCL) was cited as a potential beneficiary of progress on a U.S. TikTok joint venture using Oracle’s cloud as a backbone. On the other hand, Honeywell (HON) faced a one-time $470 million settlement tied to Flexjet and a lowered profit outlook, a reminder that idiosyncratic legal or operational items can weigh within otherwise solid industrial backdrops.
Bonds
Treasury ETFs were modestly weaker, with TLT down about 0.23%, IEF off around 0.10%, and SHY lower by roughly 0.05%. With the 10-year yield sitting at 4.12% (12/18) and the 30-year at 4.80%, the bear-steepening risk remains a consideration if growth or supply dynamics reassert into year-end. Market commentary referenced a “closely watched gauge of bond-market volatility” signaling an all-clear for stocks; that framing aligns with today’s modest equity gains and small-cap leadership. However, it also implies that a surprise upswing in rates volatility could challenge risk appetite in the near term.
Commodities
Gold and silver rallied. GLD advanced around 2.3%, while SLV gained about 2.5%. MarketWatch highlighted strategist commentary that the “great debasement trade” is back as gold sets fresh records—consistent with robust performance in precious metals and ongoing geopolitical and inflation-hedging demand narratives. Oil proxies were firm as USO rose about 2.5%; this came alongside reporting that prices were “stable” after comments regarding Venezuela-related geopolitical risks. Natural gas (UNG) declined around 2.8%, and the diversified commodity ETF (DBC) slipped.
FX and crypto
The euro strengthened versus the dollar intraday, with EURUSD around 1.1754 against an open of 1.1720. While today’s move pointed to dollar softness against the euro, a separate report noted a “golden cross” technical pattern in dollar gauges that could suggest potential USD resilience ahead. Dollar direction remains a swing variable for multinationals and commodity pricing. In crypto, a Wall Street forecast cited by MarketWatch called for higher Bitcoin prices next year, but price action today was modestly risk-off: BTCUSD was down about 0.6% versus its open, and ETHUSD fell roughly 2.1%.
Notable company and theme headlines
- Nike (NKE): Mixed sentiment backdrop as Jefferies named the stock a top pick and some commentators advocated buying the post-earnings dip, while others highlighted ongoing investor concerns around margins and the pace of the turnaround.
- Alphabet (GOOGL): Strategic acquisition of Intersect to secure data center power, with additional bullish signals in prediction markets about Alphabet’s standing next year.
- Nvidia (NVDA): Positive analyst framing on relative valuation adds to a constructive AI narrative.
- FedEx (FDX): Coverage emphasized operational improvement and a more confident profit outlook.
- Honeywell (HON): One-time Flexjet-related settlement and lowered outlook weighed on sentiment.
- Defense/space: Huntington Ingalls (HII) strength on a Navy frigate award; Rocket Lab (RKLB) and AST SpaceMobile (ASTS) cited for execution momentum.
- Oracle (ORCL): Cloud positioning seen as a beneficiary of a prospective U.S. TikTok joint venture.
Outlook
Seasonal discussions of a “Santa Claus rally” remain front-of-mind, and today’s broad-based equity gains, coupled with small-cap leadership, keep that possibility intact. Key near-term watch items include:
- Rates and the curve: With the 10-year at 4.12% and 30-year at 4.80% (12/18), further bear steepening would pressure duration-sensitive sectors and long-duration equities. Conversely, a quiet rates tape with contained volatility should support equities, as one report’s “all-clear” message suggested.
- Inflation and expectations: The interplay between headline prints, “technical factors” discussed by the New York Fed’s Williams, and still-anchored 5- to 10-year expectations will shape policy-rate path assumptions. Markets will look for validation that disinflation can persist without compromising growth.
- Dollar and commodities: Today’s EURUSD strength ran counter to commentary about a potential USD “golden cross.” A durable dollar rebound could weigh on commodities and multinational earnings; continued dollar softness would likely support precious metals and risk sentiment. The strong bid in GLD and SLV bears watching for follow-through.
- Sector rotation: If small-cap leadership and financials’ outperformance persist, it would argue for a broader advance; continued energy equity underperformance against firmer oil would be a divergence to monitor.
Risks
- Macro surprises: As flagged by strategists, unanticipated macro developments could challenge consensus views next year.
- Bond-market volatility: An upswing from currently perceived benign levels could pressure equities and credit.
- Inflation: A “second wave” of inflation, as one commodity trader warned, would push yields higher and compress multiples.
- Policy and geopolitics: Drug pricing initiatives, cannabis reclassification timing, and Venezuela-related oil headlines are potential sources of sector-specific and macro volatility.
- Technicals and flows: A USD “golden cross” and year-end liquidity dynamics can amplify moves across FX, commodities, and equities.
Bottom line
Today’s tape reflects constructive risk appetite into year-end: indices advanced, leadership broadened to small caps, financials gained, and precious metals surged. Long-end yields remain elevated, and bond proxies softened modestly, while FX and crypto were mixed. The macro setup—anchored medium-term inflation expectations alongside a steeper long end of the curve—supports a cautiously pro-risk stance, with the caveat that any resurgence in rates volatility, inflation pressure, or a stronger dollar could quickly test sentiment. With a holiday week underway, liquidity could thin, making it especially important to respect technical levels, sector rotation signals, and the message from rates and the dollar in the sessions ahead.
Overview
U.S. equities finished the holiday-shortened Monday session on a constructive note, with gains across the major index ETFs and leadership skewing toward smaller caps. The SPDR S&P 500 ETF (SPY) settled at 684.80, up about 0.6% from Friday’s close of 680.59. The Invesco QQQ Trust (QQQ) closed at 619.18, up roughly 0.35% from 617.05. Blue chips advanced as the SPDR Dow Jones Industrial Average ETF (DIA) ended at 483.39, up around 0.47% versus 481.15. The iShares Russell 2000 ETF (IWM) outperformed, finishing at 253.59, up about 1.12% from 250.79, pointing to broadening participation into year-end.
Sector performance was mixed to positive. Financials (XLF) gained about 0.9% to 55.32 from 54.84, Technology (XLK) added approximately 0.4% to 145.16 from 144.60, and Health Care (XLV) edged up about 0.2% to 155.28 from 154.94. Energy (XLE) lagged, slipping roughly 0.4% to 42.47 from 42.63 despite a supportive move in crude proxies.
In fixed income, long- and intermediate-duration Treasury ETFs pulled back as yields remained elevated on the long end of the curve. The iShares 20+ Year Treasury Bond ETF (TLT) dipped about 0.23% to 87.35 from 87.55. The iShares 7-10 Year Treasury Bond ETF (IEF) was off about 0.10% to 96.14 from 96.24, and the iShares 1-3 Year Treasury Bond ETF (SHY) eased roughly 0.05% to 82.72 from 82.76.
Commodities were a notable bright spot. The SPDR Gold Trust (GLD) jumped about 2.3% to 408.24 from 399.02, while the iShares Silver Trust (SLV) climbed around 2.5% to 62.47 from 60.93. Oil proxies also advanced: the United States Oil Fund (USO) rose approximately 2.5% to 69.74 from 68.03. Natural gas, however, weakened, with the United States Natural Gas Fund (UNG) down roughly 2.8% to 11.85 from 12.19. A broad commodity basket (DBC) slipped to 22.40 from 22.85.
FX and crypto painted a mixed picture. The euro strengthened against the dollar intraday, with EURUSD marked at 1.1754 versus an open of 1.1720. In digital assets, Bitcoin (BTCUSD) was modestly lower on the day, marked around 88,326 versus an open near 88,891. Ether (ETHUSD) was softer, near 2,977 versus an open around 3,039.
Macro backdrop: yields, inflation, and expectations
Treasury yields continue to show a positively sloped curve beyond the belly, with the 2-year at 3.46%, 5-year at 3.66%, 10-year at 4.12%, and 30-year at 4.80% (latest available: 12/18). The upward slope from 5s to 30s reinforces the idea that longer-term term premia and/or growth and inflation risk compensation remain embedded at the back end of the curve. Today’s modest declines in TLT, IEF, and SHY align with that backdrop, even as the day-to-day moves in yields were not provided.
On inflation, the November CPI print stands at 325.031, with core CPI at 331.068. Inflation expectations remain broadly anchored in the intermediate tenors: model-based expectations are 3.20% at one year, 2.42% at five years, 2.34% at ten years, and 2.44% at thirty years (12/01). This configuration is consistent with investors anticipating some fading of near-term inflation pressures toward the Federal Reserve’s longer-run objective range over time, even as the one-year horizon reflects residual price stickiness.
The narrative around recent inflation data remains nuanced. A CNBC report highlighted that the New York Fed’s John Williams characterized some “technical factors” as having pushed November’s CPI lower than it otherwise would have been. While no specific components were cited here, the takeaway for markets is that the apparent disinflation trend may have contained idiosyncratic elements. With equities up and longer duration bonds down today, risk markets appear comfortable leaning on medium-term inflation expectations that are anchored in the low-2s across five- to ten-year horizons, even as policymakers and investors debate the signal-to-noise within the latest CPI readings.
Equities and sectors
Breadth was solid into the close, led by small caps. SPY gained roughly 0.6% and QQQ about 0.35%, with DIA up 0.47%. The outperformance of IWM, up about 1.12%, suggests renewed interest in cyclicals and domestically oriented companies. Financials (XLF) rose around 0.9%, consistent with steeper long-end yields that can support net interest margins for banks. Technology (XLK) added about 0.4%, while Health Care (XLV) rose about 0.2%.
Energy (XLE) underperformed, slipping about 0.4% despite a 2.5% move higher in USO. The divergence can happen when equity-specific dynamics, positioning, or commodity curve structures exert more influence on sector equities than front-month oil proxies on a given day.
Articles provided additional color on stock-specific narratives. Nike (NKE) remained in focus. Headlines spanned a range of views: a Jefferies positive call naming Nike a top pick and commentary framing the recent post-earnings decline as a buying opportunity, counterbalanced by coverage noting that “investor worries remain” despite management describing the turnaround as in the “middle innings.” That mix helps explain why sentiment around NKE remains debated into year-end.
In technology, Alphabet (GOOGL) drew attention for an announced purchase of Intersect—framed as a strategic move to secure power for data centers amid rising AI-related energy constraints. A separate piece noted a bullish signal from prediction markets regarding Alphabet’s standing next year. Together, these headlines reinforce the market narrative that hyperscale cloud and AI infrastructure demand remains a secular driver, even as investors continue to parse near-term capital intensity and power availability constraints across the ecosystem.
The AI complex more broadly retained center stage. Reporting included supportive views on Nvidia (NVDA), with one analyst called out for describing the stock as “unusually cheap” relative to the broader chip sector. While individual AI beneficiaries can experience volatility, the positive skew in commentary offered a constructive tone for the group today.
Industrial and aerospace themes were active. FedEx (FDX) coverage underscored execution improvements and an outlook pointing to more profit as key businesses turn around, which the company characterized as reflective of the industrial economy’s health. In defense, Huntington Ingalls Industries (HII) extended gains tied to a U.S. Navy award for a new class of frigates, and Rocket Lab (RKLB) was highlighted for contract wins and execution milestones, supporting the ongoing strength in the space cohort—alongside reports of momentum at AST SpaceMobile (ASTS).
Elsewhere in tech, Oracle (ORCL) was cited as a potential beneficiary of progress on a U.S. TikTok joint venture using Oracle’s cloud as a backbone. On the other hand, Honeywell (HON) faced a one-time $470 million settlement tied to Flexjet and a lowered profit outlook, a reminder that idiosyncratic legal or operational items can weigh within otherwise solid industrial backdrops.
Bonds
Treasury ETFs were modestly weaker, with TLT down about 0.23%, IEF off around 0.10%, and SHY lower by roughly 0.05%. With the 10-year yield sitting at 4.12% (12/18) and the 30-year at 4.80%, the bear-steepening risk remains a consideration if growth or supply dynamics reassert into year-end. Market commentary referenced a “closely watched gauge of bond-market volatility” signaling an all-clear for stocks; that framing aligns with today’s modest equity gains and small-cap leadership. However, it also implies that a surprise upswing in rates volatility could challenge risk appetite in the near term.
Commodities
Gold and silver rallied. GLD advanced around 2.3%, while SLV gained about 2.5%. MarketWatch highlighted strategist commentary that the “great debasement trade” is back as gold sets fresh records—consistent with robust performance in precious metals and ongoing geopolitical and inflation-hedging demand narratives. Oil proxies were firm as USO rose about 2.5%; this came alongside reporting that prices were “stable” after comments regarding Venezuela-related geopolitical risks. Natural gas (UNG) declined around 2.8%, and the diversified commodity ETF (DBC) slipped.
FX and crypto
The euro strengthened versus the dollar intraday, with EURUSD around 1.1754 against an open of 1.1720. While today’s move pointed to dollar softness against the euro, a separate report noted a “golden cross” technical pattern in dollar gauges that could suggest potential USD resilience ahead. Dollar direction remains a swing variable for multinationals and commodity pricing. In crypto, a Wall Street forecast cited by MarketWatch called for higher Bitcoin prices next year, but price action today was modestly risk-off: BTCUSD was down about 0.6% versus its open, and ETHUSD fell roughly 2.1%.
Notable company and theme headlines
- Nike (NKE): Mixed sentiment backdrop as Jefferies named the stock a top pick and some commentators advocated buying the post-earnings dip, while others highlighted ongoing investor concerns around margins and the pace of the turnaround.
- Alphabet (GOOGL): Strategic acquisition of Intersect to secure data center power, with additional bullish signals in prediction markets about Alphabet’s standing next year.
- Nvidia (NVDA): Positive analyst framing on relative valuation adds to a constructive AI narrative.
- FedEx (FDX): Coverage emphasized operational improvement and a more confident profit outlook.
- Honeywell (HON): One-time Flexjet-related settlement and lowered outlook weighed on sentiment.
- Defense/space: Huntington Ingalls (HII) strength on a Navy frigate award; Rocket Lab (RKLB) and AST SpaceMobile (ASTS) cited for execution momentum.
- Oracle (ORCL): Cloud positioning seen as a beneficiary of a prospective U.S. TikTok joint venture.
Outlook
Seasonal discussions of a “Santa Claus rally” remain front-of-mind, and today’s broad-based equity gains, coupled with small-cap leadership, keep that possibility intact. Key near-term watch items include:
- Rates and the curve: With the 10-year at 4.12% and 30-year at 4.80% (12/18), further bear steepening would pressure duration-sensitive sectors and long-duration equities. Conversely, a quiet rates tape with contained volatility should support equities, as one report’s “all-clear” message suggested.
- Inflation and expectations: The interplay between headline prints, “technical factors” discussed by the New York Fed’s Williams, and still-anchored 5- to 10-year expectations will shape policy-rate path assumptions. Markets will look for validation that disinflation can persist without compromising growth.
- Dollar and commodities: Today’s EURUSD strength ran counter to commentary about a potential USD “golden cross.” A durable dollar rebound could weigh on commodities and multinational earnings; continued dollar softness would likely support precious metals and risk sentiment. The strong bid in GLD and SLV bears watching for follow-through.
- Sector rotation: If small-cap leadership and financials’ outperformance persist, it would argue for a broader advance; continued energy equity underperformance against firmer oil would be a divergence to monitor.
Risks
- Macro surprises: As flagged by strategists, unanticipated macro developments could challenge consensus views next year.
- Bond-market volatility: An upswing from currently perceived benign levels could pressure equities and credit.
- Inflation: A “second wave” of inflation, as one commodity trader warned, would push yields higher and compress multiples.
- Policy and geopolitics: Drug pricing initiatives, cannabis reclassification timing, and Venezuela-related oil headlines are potential sources of sector-specific and macro volatility.
- Technicals and flows: A USD “golden cross” and year-end liquidity dynamics can amplify moves across FX, commodities, and equities.
Bottom line
Today’s tape reflects constructive risk appetite into year-end: indices advanced, leadership broadened to small caps, financials gained, and precious metals surged. Long-end yields remain elevated, and bond proxies softened modestly, while FX and crypto were mixed. The macro setup—anchored medium-term inflation expectations alongside a steeper long end of the curve—supports a cautiously pro-risk stance, with the caveat that any resurgence in rates volatility, inflation pressure, or a stronger dollar could quickly test sentiment. With a holiday week underway, liquidity could thin, making it especially important to respect technical levels, sector rotation signals, and the message from rates and the dollar in the sessions ahead.