State of Market: Close 01/26/26
Stocks grind higher into the close as precious metals rally; long bonds firm ahead of Fed and mega-cap earnings
S&P 500, Nasdaq-100 and Dow advance while small caps lag; gold and silver extend gains, natural gas stays volatile, and long-duration Treasurys edge up with inflation expectations anchored near 2.3%–2.6%.
TendieTensor.com State of Market Close
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Markets closed with a cautiously constructive tone Monday as investors positioned for a pivotal week featuring a Federal Reserve policy decision and a dense slate of Big Tech earnings. Broad equity benchmarks pushed higher, led by large caps and growth, while small caps lagged. At the same time, precious metals extended a notable run, natural gas remained elevated and choppy, and long-duration Treasurys ticked higher amid steady medium-term inflation expectations.
Equities and sectors: large caps lead, small caps lag
- The S&P 500 proxy SPY finished at 692.71 versus a prior close of 689.23, up roughly 0.5%. The Nasdaq-100 tracker QQQ ended at 625.48 versus 622.72 (+0.4%). The Dow Jones proxy DIA closed at 494.02 versus 490.93 (+0.6%). In contrast, small caps underperformed: IWM ended at 263.97 versus 264.81 (-0.3%). That mix reflects an incremental preference for larger, higher-quality balance sheets ahead of macro and earnings catalysts.
- Sector performance skewed supportive. Technology (XLK) closed at 146.10 versus 145.09 (+0.7%), consistent with pre-earnings positioning across mega-cap platforms. Financials (XLF) printed 53.41 versus 53.07 (+0.6%), aligning with recent arguments that many large-bank stocks screen attractively for long-term investors. Defensive cohorts also participated: Health Care (XLV) ended at 158.09 versus 157.48 (+0.4%), and Utilities (XLU) closed at 42.88 versus 42.56 (+0.8%).
Macro backdrop: yields steady, expectations anchored
- Treasury yields, as of the latest available reading, show the 2-year at 3.61%, 5-year at 3.85%, 10-year at 4.26%, and 30-year at 4.84%. That curve configuration—modestly inverted at the front, with term premiums evident farther out—sets the tone for risk assets this week. While we do not have an intraday change in yields for Monday, price action in long-duration bond ETFs (see below) suggests a mild bid for duration into event risk.
- Inflation data show the December 2025 headline CPI index at 326.03 with core at 331.86 (index levels). Importantly, inflation expectations continue to sit in a narrow band: model-implied expectations stand at 2.60% (1-year), 2.33% (5-year), 2.32% (10-year), and 2.45% (30-year). Anchored expectations are supportive of risk multiples and long-duration asset pricing so long as realized inflation does not re-accelerate.
- The policy calendar intensifies now. Multiple reports preview a Federal Reserve that is expected to hold policy steady this week, with the “for how long” question moving to the forefront. A steady hand from the Fed, alongside credible disinflation and contained expectations, would help validate the market’s current mix—large-cap leadership with selective participation from cyclicals.
Bonds: duration catches a bid
- Long-duration and intermediate Treasurys advanced. TLT closed at 88.34 versus 87.93 (+0.5%). IEF finished at 96.08 versus 95.95 (+0.1%). Front-end paper was little changed, with SHY at 82.86 versus 82.84 (flat to +0.02%). Together, the moves are consistent with a modest pre-Fed duration bias and with medium-term inflation expectations that remain near 2.3%–2.6%.
Commodities: precious metals extend gains; oil eases; natural gas stays hot
- Gold strengthened further, with GLD closing at 464.73 versus 458.00 (+1.5%). Silver outperformed: SLV ended at 98.32 versus 92.91 (about +5.8%). The metal complex is contemporaneously supported by a blend of macro uncertainty and a bid for diversifiers. Recent coverage highlights gold’s case as a portfolio hedge and notes that gold has reached milestone levels alongside silver’s surge. Monday’s ETF prices corroborate that momentum.
- Crude oil eased: USO closed at 73.48 versus 73.95 (-0.6%), a helpful offset to inflationary pressure. Broad commodities (DBC) edged higher at 24.29 versus 24.18 (+0.4%), reflecting the mix of strength in metals versus softer oil.
- Natural gas remains the volatility focal point. UNG finished at 14.84 versus 13.97 (+6.2%) after recent reports of a historic multi-session surge. Commentary in today’s tape warns that after such spikes, sharp retracements are possible if weather and storage dynamics shift. A separate view suggests the latest price strength may reflect temporary imbalances likely to correct. The ETF advance Monday underscores the elevated volatility regime in gas.
FX and crypto
- The euro traded around 1.188 versus the dollar (EURUSD mark ~1.188). Without a prior-day reference in this dataset, the pair appeared stable on the day. Broader dollar drivers this week will be the Fed’s tone and any shifts in global policy expectations.
- Crypto was mixed to slightly firmer in majors. Bitcoin (BTCUSD) marked near 87,528 with a session range of roughly 86,922 to 88,808. Ether (ETHUSD) marked near 2,899, up versus its provided open, with a daily range of approximately 2,857 to 2,950. The relative stability in crypto contrasts with the stronger bid in precious metals noted above.
Notable news and themes from the day’s coverage
- Corporate leadership and single-name moves: Trade Desk drew scrutiny after another CFO change, with analysts flagging concerns about leadership turnover and decision-making. This served as a reminder that idiosyncratic governance issues can puncture otherwise supportive sector tape.
- AI ecosystem and investment flows: Nvidia plans an additional $2 billion investment in CoreWeave, which further spotlights the tight interlinkages across the AI supply chain. Commentary also emphasizes that business investment tied to AI and robotics has remained an unexpected source of macro strength. Some market participants argue the “AI bubble” has already shed weaker parts of the ecosystem; nevertheless, upcoming mega-cap earnings will test whether capex, monetization, and unit economics are tracking bullish narratives.
- Energy and weather impacts: Winter Storm Fern disrupted air travel significantly over the weekend and into Monday, with JetBlue singled out as experiencing outsized cancellations. A new automatic-refund rule faces an immediate stress test, while officials suggested travel should normalize by midweek. Separately, analysts noted the storm could weigh on first-quarter GDP, complicating near-term economic reads. The same weather dynamics support elevated heating demand narratives—one reason natural gas remains volatile.
- Policy and Washington watch: Reports indicate higher odds being assigned to a government shutdown by month-end, a potential near-term risk to confidence and spending. At the same time, tax season has begun; some coverage suggests refunds could be larger this year, though the broader macro impact depends on timing and household balance sheets. The Fed is widely expected to hold rates steady this week, and the market’s focus is on guidance for the path ahead.
- Gold and safe-haven demand: Multiple pieces highlight gold’s appeal versus other hedges in the current environment, with some characterizations stressing gold’s unique diversification properties compared to either Treasurys or crypto. Monday’s advance in GLD and the continued strength in SLV are consistent with those narratives.
- Platform and regulatory developments: TikTok announced a joint venture framework to continue operating in the U.S., an important milestone in a yearslong regulatory saga. In the labor arena, separate reporting suggests Amazon may announce a new round of job cuts, another data point for investors monitoring cost discipline across mega-cap platforms.
Putting it together
Monday’s risk-on drift—large caps up, defensives participating, long bonds firmer, and precious metals stronger—suggests investors are leaning into a “stable policy, slowing-but-not-stalling growth” baseline. Inflation expectations anchored near the low-2% range give the Fed room to remain patient without reigniting fears of policy re-tightening. In that setting, high-quality growth leadership (QQQ, XLK) and financials (XLF) participation make sense, while small-cap softness (IWM) hints that financing conditions and earnings quality continue to matter.
Commodities are telling a nuanced story. A rising GLD/SLV complex alongside softer oil (USO) tempers inflation angst even as natural gas (UNG) remains a wild card tied to weather and short-term balances. The bond market’s modest bull tone (TLT, IEF higher) fits with that cross-asset picture. FX and crypto are relatively calm in this snapshot, leaving this week’s catalysts—Fed communication and marquee earnings—to dictate the next directional move.
What to watch next
- The Fed’s policy statement and press conference: Any change in balance-of-risks language, characterization of disinflation progress, or commentary on the timing of future adjustments will be market-moving across duration, equities, and the dollar.
- Mega-cap earnings: Apple, Microsoft, Meta, and Tesla updates on AI monetization, cloud demand, device cycles, and capital allocation will set the tone for broader risk appetite and sector leadership.
- Energy and weather normalization: Monitor whether air travel normalizes as indicated and how natural gas prices evolve as weather moderates.
- Washington timelines: Shutdown risk into month-end and any headline shifts around trade/tariffs can affect confidence, curves, and equity leadership.
Risks
- Policy missteps or unexpectedly hawkish Fed tone could pressure both duration and equity multiples.
- Earnings disappointment from mega-caps could challenge the current leadership structure and widen small-cap underperformance.
- Commodity volatility (especially natural gas) may transmit into headline inflation noise and risk sentiment.
- A government shutdown would add growth and confidence headwinds.
- Financial market plumbing: private-credit valuation headlines and broader funding dynamics bear monitoring for potential spillovers.
Bottom line
Into a consequential week, markets displayed a constructive bias. Large-cap indices advanced, defensives participated, long bonds firmed, and precious metals rallied. With inflation expectations anchored and policy steady for now, the onus shifts to corporate earnings and Fed guidance to confirm or challenge the soft-landing narrative that today’s cross-asset tape implies.
Markets closed with a cautiously constructive tone Monday as investors positioned for a pivotal week featuring a Federal Reserve policy decision and a dense slate of Big Tech earnings. Broad equity benchmarks pushed higher, led by large caps and growth, while small caps lagged. At the same time, precious metals extended a notable run, natural gas remained elevated and choppy, and long-duration Treasurys ticked higher amid steady medium-term inflation expectations.
Equities and sectors: large caps lead, small caps lag
- The S&P 500 proxy SPY finished at 692.71 versus a prior close of 689.23, up roughly 0.5%. The Nasdaq-100 tracker QQQ ended at 625.48 versus 622.72 (+0.4%). The Dow Jones proxy DIA closed at 494.02 versus 490.93 (+0.6%). In contrast, small caps underperformed: IWM ended at 263.97 versus 264.81 (-0.3%). That mix reflects an incremental preference for larger, higher-quality balance sheets ahead of macro and earnings catalysts.
- Sector performance skewed supportive. Technology (XLK) closed at 146.10 versus 145.09 (+0.7%), consistent with pre-earnings positioning across mega-cap platforms. Financials (XLF) printed 53.41 versus 53.07 (+0.6%), aligning with recent arguments that many large-bank stocks screen attractively for long-term investors. Defensive cohorts also participated: Health Care (XLV) ended at 158.09 versus 157.48 (+0.4%), and Utilities (XLU) closed at 42.88 versus 42.56 (+0.8%).
Macro backdrop: yields steady, expectations anchored
- Treasury yields, as of the latest available reading, show the 2-year at 3.61%, 5-year at 3.85%, 10-year at 4.26%, and 30-year at 4.84%. That curve configuration—modestly inverted at the front, with term premiums evident farther out—sets the tone for risk assets this week. While we do not have an intraday change in yields for Monday, price action in long-duration bond ETFs (see below) suggests a mild bid for duration into event risk.
- Inflation data show the December 2025 headline CPI index at 326.03 with core at 331.86 (index levels). Importantly, inflation expectations continue to sit in a narrow band: model-implied expectations stand at 2.60% (1-year), 2.33% (5-year), 2.32% (10-year), and 2.45% (30-year). Anchored expectations are supportive of risk multiples and long-duration asset pricing so long as realized inflation does not re-accelerate.
- The policy calendar intensifies now. Multiple reports preview a Federal Reserve that is expected to hold policy steady this week, with the “for how long” question moving to the forefront. A steady hand from the Fed, alongside credible disinflation and contained expectations, would help validate the market’s current mix—large-cap leadership with selective participation from cyclicals.
Bonds: duration catches a bid
- Long-duration and intermediate Treasurys advanced. TLT closed at 88.34 versus 87.93 (+0.5%). IEF finished at 96.08 versus 95.95 (+0.1%). Front-end paper was little changed, with SHY at 82.86 versus 82.84 (flat to +0.02%). Together, the moves are consistent with a modest pre-Fed duration bias and with medium-term inflation expectations that remain near 2.3%–2.6%.
Commodities: precious metals extend gains; oil eases; natural gas stays hot
- Gold strengthened further, with GLD closing at 464.73 versus 458.00 (+1.5%). Silver outperformed: SLV ended at 98.32 versus 92.91 (about +5.8%). The metal complex is contemporaneously supported by a blend of macro uncertainty and a bid for diversifiers. Recent coverage highlights gold’s case as a portfolio hedge and notes that gold has reached milestone levels alongside silver’s surge. Monday’s ETF prices corroborate that momentum.
- Crude oil eased: USO closed at 73.48 versus 73.95 (-0.6%), a helpful offset to inflationary pressure. Broad commodities (DBC) edged higher at 24.29 versus 24.18 (+0.4%), reflecting the mix of strength in metals versus softer oil.
- Natural gas remains the volatility focal point. UNG finished at 14.84 versus 13.97 (+6.2%) after recent reports of a historic multi-session surge. Commentary in today’s tape warns that after such spikes, sharp retracements are possible if weather and storage dynamics shift. A separate view suggests the latest price strength may reflect temporary imbalances likely to correct. The ETF advance Monday underscores the elevated volatility regime in gas.
FX and crypto
- The euro traded around 1.188 versus the dollar (EURUSD mark ~1.188). Without a prior-day reference in this dataset, the pair appeared stable on the day. Broader dollar drivers this week will be the Fed’s tone and any shifts in global policy expectations.
- Crypto was mixed to slightly firmer in majors. Bitcoin (BTCUSD) marked near 87,528 with a session range of roughly 86,922 to 88,808. Ether (ETHUSD) marked near 2,899, up versus its provided open, with a daily range of approximately 2,857 to 2,950. The relative stability in crypto contrasts with the stronger bid in precious metals noted above.
Notable news and themes from the day’s coverage
- Corporate leadership and single-name moves: Trade Desk drew scrutiny after another CFO change, with analysts flagging concerns about leadership turnover and decision-making. This served as a reminder that idiosyncratic governance issues can puncture otherwise supportive sector tape.
- AI ecosystem and investment flows: Nvidia plans an additional $2 billion investment in CoreWeave, which further spotlights the tight interlinkages across the AI supply chain. Commentary also emphasizes that business investment tied to AI and robotics has remained an unexpected source of macro strength. Some market participants argue the “AI bubble” has already shed weaker parts of the ecosystem; nevertheless, upcoming mega-cap earnings will test whether capex, monetization, and unit economics are tracking bullish narratives.
- Energy and weather impacts: Winter Storm Fern disrupted air travel significantly over the weekend and into Monday, with JetBlue singled out as experiencing outsized cancellations. A new automatic-refund rule faces an immediate stress test, while officials suggested travel should normalize by midweek. Separately, analysts noted the storm could weigh on first-quarter GDP, complicating near-term economic reads. The same weather dynamics support elevated heating demand narratives—one reason natural gas remains volatile.
- Policy and Washington watch: Reports indicate higher odds being assigned to a government shutdown by month-end, a potential near-term risk to confidence and spending. At the same time, tax season has begun; some coverage suggests refunds could be larger this year, though the broader macro impact depends on timing and household balance sheets. The Fed is widely expected to hold rates steady this week, and the market’s focus is on guidance for the path ahead.
- Gold and safe-haven demand: Multiple pieces highlight gold’s appeal versus other hedges in the current environment, with some characterizations stressing gold’s unique diversification properties compared to either Treasurys or crypto. Monday’s advance in GLD and the continued strength in SLV are consistent with those narratives.
- Platform and regulatory developments: TikTok announced a joint venture framework to continue operating in the U.S., an important milestone in a yearslong regulatory saga. In the labor arena, separate reporting suggests Amazon may announce a new round of job cuts, another data point for investors monitoring cost discipline across mega-cap platforms.
Putting it together
Monday’s risk-on drift—large caps up, defensives participating, long bonds firmer, and precious metals stronger—suggests investors are leaning into a “stable policy, slowing-but-not-stalling growth” baseline. Inflation expectations anchored near the low-2% range give the Fed room to remain patient without reigniting fears of policy re-tightening. In that setting, high-quality growth leadership (QQQ, XLK) and financials (XLF) participation make sense, while small-cap softness (IWM) hints that financing conditions and earnings quality continue to matter.
Commodities are telling a nuanced story. A rising GLD/SLV complex alongside softer oil (USO) tempers inflation angst even as natural gas (UNG) remains a wild card tied to weather and short-term balances. The bond market’s modest bull tone (TLT, IEF higher) fits with that cross-asset picture. FX and crypto are relatively calm in this snapshot, leaving this week’s catalysts—Fed communication and marquee earnings—to dictate the next directional move.
What to watch next
- The Fed’s policy statement and press conference: Any change in balance-of-risks language, characterization of disinflation progress, or commentary on the timing of future adjustments will be market-moving across duration, equities, and the dollar.
- Mega-cap earnings: Apple, Microsoft, Meta, and Tesla updates on AI monetization, cloud demand, device cycles, and capital allocation will set the tone for broader risk appetite and sector leadership.
- Energy and weather normalization: Monitor whether air travel normalizes as indicated and how natural gas prices evolve as weather moderates.
- Washington timelines: Shutdown risk into month-end and any headline shifts around trade/tariffs can affect confidence, curves, and equity leadership.
Risks
- Policy missteps or unexpectedly hawkish Fed tone could pressure both duration and equity multiples.
- Earnings disappointment from mega-caps could challenge the current leadership structure and widen small-cap underperformance.
- Commodity volatility (especially natural gas) may transmit into headline inflation noise and risk sentiment.
- A government shutdown would add growth and confidence headwinds.
- Financial market plumbing: private-credit valuation headlines and broader funding dynamics bear monitoring for potential spillovers.
Bottom line
Into a consequential week, markets displayed a constructive bias. Large-cap indices advanced, defensives participated, long bonds firmed, and precious metals rallied. With inflation expectations anchored and policy steady for now, the onus shifts to corporate earnings and Fed guidance to confirm or challenge the soft-landing narrative that today’s cross-asset tape implies.