State of Market: Open 12/18/25
Stocks open higher as yields ease; tech leads on AI tailwinds while metals slip
A modest pullback in long rates and upbeat AI chip sentiment help QQQ and SPY extend early gains. Bonds catch a bid, oil softens, and silver fades after a strong run.
TendieTensor.com State of Market Open
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Overview
U.S. equities opened broadly higher Thursday, with all four major index ETFs in the green and technology out front. The Nasdaq 100 proxy QQQ is up about 1.5% from Wednesday’s close, followed by gains of roughly 0.9% for the S&P 500 (SPY), 1.2% for small caps (IWM), and 0.5% for the Dow (DIA). The advance coincides with a bid in Treasurys—pushing prices up across the curve and nudging yields lower—and with renewed optimism around the AI supply chain after Micron’s results. Early-session sector leadership is consistent with a risk-on tone: technology and energy are up, financials firm, and healthcare is essentially flat. Precious metals are easing while oil ticks lower and natural gas edges higher. In crypto, both Bitcoin and Ethereum are extending gains from their stated opens.
Macro backdrop: yields, inflation, and expectations
Treasury yields remain well below their peaks of the year and are broadly lower along the curve versus two days ago, with the 2-year at 3.48%, 5-year at 3.69%, 10-year at 4.15%, and 30-year at 4.82% (data as of 2025-12-16). The term structure is positively sloped from 2s to 10s and out to 30s, consistent with easing near-term inflation concerns and markets anticipating moderation in policy rates over time. This shape supports duration-sensitive assets, which is reflected in early gains for long- and intermediate-duration bond ETFs.
On inflation, the most recent published index readings in the payload are for September: CPI at 324.368 and core CPI at 330.542. While these are levels rather than growth rates, they sit alongside anchored market-based inflation expectations: five-year at 2.35% and ten-year at 2.27% (November). The forward 5-to-10-year measure is 2.18%, indicating longer-run inflation pricing remains near the upper end of the Federal Reserve’s target range but not unmoored. Complementing that, MarketWatch reports that Fed chair candidate Christopher Waller sees inflation falling over the next three to four months and room for a moderate pace of rate cuts totaling about 100 basis points. Separately, CNBC notes this morning’s tone is aided by a cooler-than-expected consumer inflation reading. Altogether, the message is one of easing price pressure into year-end, which is consistent with firmer risk assets and a stronger bid for duration.
Equities and sectors
Major benchmarks are participating broadly:
- SPY last traded at 677.48 versus a previous close of 671.40, up about 0.9% at the bell.
- QQQ is at 609.49 versus 600.41, up roughly 1.5%, placing tech in the leadership seat.
- DIA is at 482.40 versus 479.80, up about 0.5%.
- IWM is at 250.18 versus 247.24, up approximately 1.2%, indicating small caps are keeping pace with the risk-on start.
Sector moves mirror the index pattern. Technology (XLK 141.76 vs 139.39) is up around 1.7%, financials (XLF 54.82 vs 54.63) are higher by about 0.4%, energy (XLE 43.06 vs 42.76) is up about 0.7%, and healthcare (XLV 153.78 vs 153.79) is essentially flat. The outperformance in XLK aligns with the AI semiconductor narrative in today’s news flow. MarketWatch highlights Micron’s “dramatic beat” and an improving outlook tied to AI demand, characterizing it as the company’s “Nvidia moment.” That stands in contrast to recent pressure across parts of the AI complex amid funding concerns for data-center buildouts—MarketWatch has pointed to worries around debt financing at names like Oracle and CoreWeave and broader unwind fears. Another MarketWatch piece argues the negative narrative around Oracle’s data-center funding may be overstated. Taken together, the early pop in growth and semis today suggests investors are refocusing on near-term earnings strength at key enablers of AI demand even as they remain selective and headline-sensitive across the ecosystem.
Consumer and discretionary themes appear in the news flow as well. MarketWatch reports that activist investor Elliott Management has taken a sizeable stake in Lululemon with leadership changes under consideration. On the services side, DoorDash is integrating with ChatGPT to enable grocery shopping via AI—another sign of AI diffusing into consumer platforms. These developments underscore Goldman Sachs’ view (via MarketWatch) that 2026 could be more about stock picking than an index-level tug-of-war, a dynamic that could favor companies with idiosyncratic catalysts and durable profit trajectories.
Transports and travel have tailwinds in the headlines. MarketWatch notes Southwest shares have hit multi-year highs amid improving profitability expectations, and CNBC reports American Airlines began operating the long-range Airbus A321XLR in the U.S., a milestone for narrow-body long-haul economics. While we lack a transports ETF quote in the payload, the combination of capacity discipline, efficiency gains, and steady demand has bolstered sentiment in airline equities into year-end, dovetailing with IWM’s stronger open.
Healthcare is steady after a high-profile IPO. MarketWatch reports Medline’s debut vaulted more than 40% above its IPO price on Wednesday, signaling robust investor demand for medical supplies. CNBC adds that some commentators view the shares as rich post-IPO, which may help explain why XLV is flat despite the strong listing—investors are discriminating between growth and valuation after the initial surge.
Bonds
Treasury ETFs are bid across the curve:
- TLT is at 88.15 versus 87.80, up roughly 0.4%.
- IEF is at 96.77 versus 96.52, up about 0.3%.
- SHY is at 83.04 (last 83.035) versus 82.97, up about 0.1%.
The gains align with the yield backdrop: the 10-year at 4.15% and 5-year at 3.69% (as of 12/16) reflect a curve that is no longer deeply inverted, and Waller’s comments about cooling inflation and scope for moderate cuts provide a policy narrative supportive of duration. Improved risk appetite alongside higher bond prices suggests markets are entertaining a soft-landing path with easing inflation, rather than pricing acute recession risk.
Commodities
The precious metals complex is softer in early trade:
- GLD last is 398.18 versus 399.29, down about 0.3%.
- SLV is 59.72 versus 60.26, down roughly 0.9%.
The move comes as some analysts advocate profit-taking in silver after a record-breaking run, per MarketWatch. That stance appears to be resonating this morning. Gold’s slight decline is more measured, consistent with a risk-on open and softer yields.
Energy is mixed to slightly weaker:
- USO last is 67.71 versus 67.98, down around 0.4%.
- UNG is 12.68 versus 12.64, up roughly 0.3%.
- Broad commodities via DBC are unchanged at 22.85 based on the most recent consolidated last.
MarketWatch frames 2025 as a historically weak year for crude, with prices set to finish near five-year lows amid ample supply, though that backdrop could sow seeds for production cuts and eventual rebalancing. Leadership developments can also influence sentiment; MarketWatch notes BP’s CEO stepped down, with a seasoned energy executive stepping in, highlighting ongoing strategic resets across the oil majors.
FX and crypto
EURUSD marks 1.1739 this morning. Without a comparative prior in the payload, we refrain from drawing directional conclusions, but a firmer euro-dollar tends to align with pro-cyclical risk appetite if sustained.
Crypto is firmer:
- BTCUSD marks 88,369.92 against an open of 86,731.29, up about 1.9%, with an intraday range so far between 86,346 and 89,451.
- ETHUSD marks 2,955.61 versus an open of 2,836.91, up roughly 4.2%, ranging 2,821 to 2,992.
The gains in digital assets are consistent with a broader risk-on session and speculation that easier financial conditions in 2026 could be supportive for alternative assets. Market narratives about AI’s diffusion across platforms—from delivery apps integrating ChatGPT to Alphabet’s Waymo strength (per MarketWatch)—also reflect the broader technology enthusiasm that often correlates with crypto beta.
Notable company and theme highlights from the news flow
- Micron’s AI tailwind: MarketWatch writes that Micron “blew past expectations,” with analysts upbeat that it stands to benefit materially from the AI boom. This is emblematic of a market phase where the AI supply chain (memory, compute, networking) is being rerated on earnings durability.
- AI funding debate: MarketWatch highlights concerns that heavy debt financing for data centers (referencing Oracle and CoreWeave) could be a pressure point for AI equities; another piece suggests fears around Oracle’s funding are overdone. Expect continued volatility around news of capital spending plans and financing structures.
- Policy, the Fed, and inflation: MarketWatch reports Waller expects inflation to cool and sees room for moderate rate cuts. CNBC notes today’s bounce is aided by a cooler-than-expected inflation reading, helping ease rate fears.
- Energy leadership shifts: MarketWatch reports BP’s CEO exit and replacement, underscoring ongoing strategy evolution amidst a weak crude tape in 2025.
- Silver sentiment cools: MarketWatch suggests it may be time to take profits in silver after a strong multi-year run; SLV is down nearly 1% at the open.
- Airlines and transports: MarketWatch cites Southwest’s multi-year highs on improving profitability prospects, while CNBC reports American Airlines’ A321XLR debut—both supportive of the transport recovery theme.
- IPOs and healthcare: Medline’s standout debut (MarketWatch, CNBC) underlines robust appetite for profitable, cash-generative healthcare suppliers, but near-term valuation debates keep XLV subdued.
Risks to the outlook
- AI capex and financing: If data-center funding costs rise or capital markets tighten, AI beneficiaries could see multiple compression despite solid demand, as highlighted by Oracle-related headlines.
- Policy uncertainty: Shifts in fiscal priorities and executive actions—including defense- and cannabis-related policy discussions reported this week—could alter sector earnings paths and factor leadership.
- Inflation surprises: While today’s tone is helped by a softer inflation read and Waller’s comments, prior reporting warned of rising inflation into year-end. Any upside surprises could push back against easing-rate narratives and weigh on duration and growth assets.
- Commodity volatility: Oil hovering near multi-year lows and precious metals showing profit-taking can increase cross-asset volatility, especially if dollar or rate moves accelerate.
- Governance and idiosyncratic shocks: Executive changes at energy majors and legal issues in credit markets (e.g., the Tricolor fraud case reported by CNBC and MarketWatch) are reminders of single-name risk that can ripple into sectors.
What to watch next
- Follow-through in tech leadership: Can XLK sustain relative strength if yields stabilize or drift lower, and do AI earnings beats broaden beyond semis into software and services?
- Rates trajectory: With the 10-year around 4.15% (12/16), monitor whether today’s bond bid extends; TLT and IEF price action will reflect the durability of the “soft-landing with easing inflation” narrative.
- Metals’ positioning: After calls to take profits in silver, watch SLV and GLD for signs of deeper consolidation or quick reaccumulation on dips.
- Energy stabilization: With USO soft and 2025 framed as a weak crude year, look for signs of supply-side adjustment and whether energy equities (XLE) can decouple on capital discipline and dividend support.
- Small-cap breadth: IWM’s outperformance at the open is constructive; sustained breadth would bolster the case that 2026 could favor stock pickers and cyclicals, as suggested by Goldman Sachs’ commentary.
Overall, Thursday’s open reflects improved risk appetite on the back of easing rate fears and supportive AI earnings news. The cross-asset picture—stocks up, bonds bid, metals softer, oil down, crypto stronger—maps cleanly onto that macro narrative. The next test will be whether incoming inflation and growth reads, plus AI capex headlines, validate this balance or reintroduce volatility into the year-end tape.
Overview
U.S. equities opened broadly higher Thursday, with all four major index ETFs in the green and technology out front. The Nasdaq 100 proxy QQQ is up about 1.5% from Wednesday’s close, followed by gains of roughly 0.9% for the S&P 500 (SPY), 1.2% for small caps (IWM), and 0.5% for the Dow (DIA). The advance coincides with a bid in Treasurys—pushing prices up across the curve and nudging yields lower—and with renewed optimism around the AI supply chain after Micron’s results. Early-session sector leadership is consistent with a risk-on tone: technology and energy are up, financials firm, and healthcare is essentially flat. Precious metals are easing while oil ticks lower and natural gas edges higher. In crypto, both Bitcoin and Ethereum are extending gains from their stated opens.
Macro backdrop: yields, inflation, and expectations
Treasury yields remain well below their peaks of the year and are broadly lower along the curve versus two days ago, with the 2-year at 3.48%, 5-year at 3.69%, 10-year at 4.15%, and 30-year at 4.82% (data as of 2025-12-16). The term structure is positively sloped from 2s to 10s and out to 30s, consistent with easing near-term inflation concerns and markets anticipating moderation in policy rates over time. This shape supports duration-sensitive assets, which is reflected in early gains for long- and intermediate-duration bond ETFs.
On inflation, the most recent published index readings in the payload are for September: CPI at 324.368 and core CPI at 330.542. While these are levels rather than growth rates, they sit alongside anchored market-based inflation expectations: five-year at 2.35% and ten-year at 2.27% (November). The forward 5-to-10-year measure is 2.18%, indicating longer-run inflation pricing remains near the upper end of the Federal Reserve’s target range but not unmoored. Complementing that, MarketWatch reports that Fed chair candidate Christopher Waller sees inflation falling over the next three to four months and room for a moderate pace of rate cuts totaling about 100 basis points. Separately, CNBC notes this morning’s tone is aided by a cooler-than-expected consumer inflation reading. Altogether, the message is one of easing price pressure into year-end, which is consistent with firmer risk assets and a stronger bid for duration.
Equities and sectors
Major benchmarks are participating broadly:
- SPY last traded at 677.48 versus a previous close of 671.40, up about 0.9% at the bell.
- QQQ is at 609.49 versus 600.41, up roughly 1.5%, placing tech in the leadership seat.
- DIA is at 482.40 versus 479.80, up about 0.5%.
- IWM is at 250.18 versus 247.24, up approximately 1.2%, indicating small caps are keeping pace with the risk-on start.
Sector moves mirror the index pattern. Technology (XLK 141.76 vs 139.39) is up around 1.7%, financials (XLF 54.82 vs 54.63) are higher by about 0.4%, energy (XLE 43.06 vs 42.76) is up about 0.7%, and healthcare (XLV 153.78 vs 153.79) is essentially flat. The outperformance in XLK aligns with the AI semiconductor narrative in today’s news flow. MarketWatch highlights Micron’s “dramatic beat” and an improving outlook tied to AI demand, characterizing it as the company’s “Nvidia moment.” That stands in contrast to recent pressure across parts of the AI complex amid funding concerns for data-center buildouts—MarketWatch has pointed to worries around debt financing at names like Oracle and CoreWeave and broader unwind fears. Another MarketWatch piece argues the negative narrative around Oracle’s data-center funding may be overstated. Taken together, the early pop in growth and semis today suggests investors are refocusing on near-term earnings strength at key enablers of AI demand even as they remain selective and headline-sensitive across the ecosystem.
Consumer and discretionary themes appear in the news flow as well. MarketWatch reports that activist investor Elliott Management has taken a sizeable stake in Lululemon with leadership changes under consideration. On the services side, DoorDash is integrating with ChatGPT to enable grocery shopping via AI—another sign of AI diffusing into consumer platforms. These developments underscore Goldman Sachs’ view (via MarketWatch) that 2026 could be more about stock picking than an index-level tug-of-war, a dynamic that could favor companies with idiosyncratic catalysts and durable profit trajectories.
Transports and travel have tailwinds in the headlines. MarketWatch notes Southwest shares have hit multi-year highs amid improving profitability expectations, and CNBC reports American Airlines began operating the long-range Airbus A321XLR in the U.S., a milestone for narrow-body long-haul economics. While we lack a transports ETF quote in the payload, the combination of capacity discipline, efficiency gains, and steady demand has bolstered sentiment in airline equities into year-end, dovetailing with IWM’s stronger open.
Healthcare is steady after a high-profile IPO. MarketWatch reports Medline’s debut vaulted more than 40% above its IPO price on Wednesday, signaling robust investor demand for medical supplies. CNBC adds that some commentators view the shares as rich post-IPO, which may help explain why XLV is flat despite the strong listing—investors are discriminating between growth and valuation after the initial surge.
Bonds
Treasury ETFs are bid across the curve:
- TLT is at 88.15 versus 87.80, up roughly 0.4%.
- IEF is at 96.77 versus 96.52, up about 0.3%.
- SHY is at 83.04 (last 83.035) versus 82.97, up about 0.1%.
The gains align with the yield backdrop: the 10-year at 4.15% and 5-year at 3.69% (as of 12/16) reflect a curve that is no longer deeply inverted, and Waller’s comments about cooling inflation and scope for moderate cuts provide a policy narrative supportive of duration. Improved risk appetite alongside higher bond prices suggests markets are entertaining a soft-landing path with easing inflation, rather than pricing acute recession risk.
Commodities
The precious metals complex is softer in early trade:
- GLD last is 398.18 versus 399.29, down about 0.3%.
- SLV is 59.72 versus 60.26, down roughly 0.9%.
The move comes as some analysts advocate profit-taking in silver after a record-breaking run, per MarketWatch. That stance appears to be resonating this morning. Gold’s slight decline is more measured, consistent with a risk-on open and softer yields.
Energy is mixed to slightly weaker:
- USO last is 67.71 versus 67.98, down around 0.4%.
- UNG is 12.68 versus 12.64, up roughly 0.3%.
- Broad commodities via DBC are unchanged at 22.85 based on the most recent consolidated last.
MarketWatch frames 2025 as a historically weak year for crude, with prices set to finish near five-year lows amid ample supply, though that backdrop could sow seeds for production cuts and eventual rebalancing. Leadership developments can also influence sentiment; MarketWatch notes BP’s CEO stepped down, with a seasoned energy executive stepping in, highlighting ongoing strategic resets across the oil majors.
FX and crypto
EURUSD marks 1.1739 this morning. Without a comparative prior in the payload, we refrain from drawing directional conclusions, but a firmer euro-dollar tends to align with pro-cyclical risk appetite if sustained.
Crypto is firmer:
- BTCUSD marks 88,369.92 against an open of 86,731.29, up about 1.9%, with an intraday range so far between 86,346 and 89,451.
- ETHUSD marks 2,955.61 versus an open of 2,836.91, up roughly 4.2%, ranging 2,821 to 2,992.
The gains in digital assets are consistent with a broader risk-on session and speculation that easier financial conditions in 2026 could be supportive for alternative assets. Market narratives about AI’s diffusion across platforms—from delivery apps integrating ChatGPT to Alphabet’s Waymo strength (per MarketWatch)—also reflect the broader technology enthusiasm that often correlates with crypto beta.
Notable company and theme highlights from the news flow
- Micron’s AI tailwind: MarketWatch writes that Micron “blew past expectations,” with analysts upbeat that it stands to benefit materially from the AI boom. This is emblematic of a market phase where the AI supply chain (memory, compute, networking) is being rerated on earnings durability.
- AI funding debate: MarketWatch highlights concerns that heavy debt financing for data centers (referencing Oracle and CoreWeave) could be a pressure point for AI equities; another piece suggests fears around Oracle’s funding are overdone. Expect continued volatility around news of capital spending plans and financing structures.
- Policy, the Fed, and inflation: MarketWatch reports Waller expects inflation to cool and sees room for moderate rate cuts. CNBC notes today’s bounce is aided by a cooler-than-expected inflation reading, helping ease rate fears.
- Energy leadership shifts: MarketWatch reports BP’s CEO exit and replacement, underscoring ongoing strategy evolution amidst a weak crude tape in 2025.
- Silver sentiment cools: MarketWatch suggests it may be time to take profits in silver after a strong multi-year run; SLV is down nearly 1% at the open.
- Airlines and transports: MarketWatch cites Southwest’s multi-year highs on improving profitability prospects, while CNBC reports American Airlines’ A321XLR debut—both supportive of the transport recovery theme.
- IPOs and healthcare: Medline’s standout debut (MarketWatch, CNBC) underlines robust appetite for profitable, cash-generative healthcare suppliers, but near-term valuation debates keep XLV subdued.
Risks to the outlook
- AI capex and financing: If data-center funding costs rise or capital markets tighten, AI beneficiaries could see multiple compression despite solid demand, as highlighted by Oracle-related headlines.
- Policy uncertainty: Shifts in fiscal priorities and executive actions—including defense- and cannabis-related policy discussions reported this week—could alter sector earnings paths and factor leadership.
- Inflation surprises: While today’s tone is helped by a softer inflation read and Waller’s comments, prior reporting warned of rising inflation into year-end. Any upside surprises could push back against easing-rate narratives and weigh on duration and growth assets.
- Commodity volatility: Oil hovering near multi-year lows and precious metals showing profit-taking can increase cross-asset volatility, especially if dollar or rate moves accelerate.
- Governance and idiosyncratic shocks: Executive changes at energy majors and legal issues in credit markets (e.g., the Tricolor fraud case reported by CNBC and MarketWatch) are reminders of single-name risk that can ripple into sectors.
What to watch next
- Follow-through in tech leadership: Can XLK sustain relative strength if yields stabilize or drift lower, and do AI earnings beats broaden beyond semis into software and services?
- Rates trajectory: With the 10-year around 4.15% (12/16), monitor whether today’s bond bid extends; TLT and IEF price action will reflect the durability of the “soft-landing with easing inflation” narrative.
- Metals’ positioning: After calls to take profits in silver, watch SLV and GLD for signs of deeper consolidation or quick reaccumulation on dips.
- Energy stabilization: With USO soft and 2025 framed as a weak crude year, look for signs of supply-side adjustment and whether energy equities (XLE) can decouple on capital discipline and dividend support.
- Small-cap breadth: IWM’s outperformance at the open is constructive; sustained breadth would bolster the case that 2026 could favor stock pickers and cyclicals, as suggested by Goldman Sachs’ commentary.
Overall, Thursday’s open reflects improved risk appetite on the back of easing rate fears and supportive AI earnings news. The cross-asset picture—stocks up, bonds bid, metals softer, oil down, crypto stronger—maps cleanly onto that macro narrative. The next test will be whether incoming inflation and growth reads, plus AI capex headlines, validate this balance or reintroduce volatility into the year-end tape.