State of Market: Open 12/22/25
Stocks open higher into holiday week as tech leads, gold surges, and yields stay above 4% on the 10-year
Santa-rally hopes meet a firmer macro backdrop: SPY, QQQ, IWM advance at the bell; XLK outperforms while energy and healthcare lag; gold and silver jump, crude firmer, and long-duration Treasurys edge lower.
TendieTensor.com State of Market Open
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Markets opened on a constructive note Monday, kicking off a holiday‑shortened trading week with gains across the major U.S. equity benchmarks and leadership from technology. As the bell rang, the SPDR S&P 500 ETF (SPY) traded at 683.78, up 0.47% from Friday’s close of 680.59. The Nasdaq 100 proxy (QQQ) rose 0.69% to 621.28 versus a 617.05 prior close, while the Dow Jones Industrial Average ETF (DIA) added 0.20% to 482.13. Small caps outperformed: the iShares Russell 2000 ETF (IWM) advanced 0.60% to 252.30, from 250.79 at Friday’s close. Those moves align with weekend commentary that investors remain on watch for a seasonal “Santa Claus rally” in the final trading days of the year.
Macro context at the open remains pivotal. Treasury yields, based on the latest available levels from late last week, show the 10‑year at 4.12%, with the 2‑year at 3.46% and the 30‑year at 4.80%. That implies a positive 2s/10s slope of roughly 66 basis points and a term premium that continues to lean against the longest duration. Inflation data updated through November show the headline CPI index level at 325.031 and core CPI at 331.068. While those are index levels (not percentage changes), they set the stage for how investors are parsing inflation trends into year‑end. Importantly, New York Fed President John Williams noted that “technical factors” likely distorted November’s CPI lower than it otherwise would have been. That nuance may explain why inflation swaps and breakevens have not collapsed and why Treasury yields remain comfortably above 4% on the 10‑year.
Inflation expectations models for December point to a near‑term 1‑year expectation of about 3.20%, stepping down to 2.42% at 5 years and 2.34% at 10 years, with 30‑year expectations at 2.44%. This downward‑sloping expectations curve suggests markets still see inflation converging toward something close to the Federal Reserve’s long‑run target over time, even as the nearer‑term path may be a bit bumpier. That is broadly supportive for equities—particularly growth and duration‑sensitive tech—so long as realized inflation does not reaccelerate meaningfully.
Equities and sectors at the open show a familiar rotation pattern. Technology is out front: the Technology Select Sector SPDR (XLK) trades at 145.83, up 0.85% from a 144.60 prior close, outpacing the broader tape. Several recent articles highlighted renewed enthusiasm around AI hardware and memory capacity, with Micron’s strong update described as having an “Nvidia moment,” and broader commentary noting that chip stocks rose late last week even if the AI trade may not be fully back on a sustained basis yet. Those narratives align with XLK’s outperformance to start the day and QQQ’s relative strength versus SPY.
On the other side of the ledger, healthcare and energy are soft at the open. The Health Care Select Sector SPDR (XLV) is down 0.70% to 153.85 from 154.94. Energy (XLE) is lower by 1.01% at 42.20 versus 42.63 previously, even with crude benchmarks firmer via the United States Oil Fund (USO), which is up 2.22% to 69.54 from 68.03. Sector‑level divergences between commodity‑linked ETFs and the integrated energy equity complex can occur as investors weigh capital allocation priorities, refining margins, and year‑end positioning; the opening snapshot simply shows energy equities lagging despite firmer oil.
Financials are essentially flat to slightly lower: the Financial Select Sector SPDR (XLF) trades at 54.775, down 0.12% from 54.84. That is consistent with a rates backdrop where the front end is relatively anchored and the long end still carries a premium, leaving net interest margin expectations and credit provisioning assumptions little changed to start the session. With breadth improving—evidenced by IWM’s 0.60% gain—investors appear willing to add cyclical beta, but not indiscriminately across rate‑sensitive groups.
Bond proxies are modestly softer. The long‑duration iShares 20+ Year Treasury Bond ETF (TLT) is down 0.17% to 87.41 from 87.55, while the 7–10 year iShares (IEF) dips 0.07% to 96.17 from 96.24. The 1–3 year iShares (SHY) is effectively flat, down 0.02% to 82.7465. The gentle pressure on duration‑heavy Treasurys lines up with 10‑ and 30‑year yields holding above 4% and 4.7%, respectively, and with the market digesting mixed signals on inflation: near‑term relief versus Williams’s caution about technical distortions in the latest CPI print. A separate note that bonds have had their best year since 2020 also tempers expectations for a repeat performance next year, as a less certain inflation and rate path could make returns more volatile.
Commodities are an important part of the opening tone today. Gold is strong: the SPDR Gold Shares (GLD) jumps 1.99% to 406.95 compared with 399.02 at Friday’s close. Silver follows suit, with the iShares Silver Trust (SLV) up 2.74% to 62.60 from 60.93. A strategist recently framed the move in terms of a “great debasement trade,” tying fresh highs in precious metals to rising geopolitical risks and continued demand for inflation hedges. While inflation expectations are anchored over five to ten years, the bid for gold and silver suggests investors are hedging tail risks or seeking diversification against currency and policy uncertainty.
Crude oil opens firmer, with USO up 2.22% to 69.54. Recent reporting noted oil prices were steady after comments from President Trump about not ruling out a conflict with Venezuela; regardless of the politics, the tape today reflects a modest risk premium and/or positioning as the year winds down. Natural gas diverges: the United States Natural Gas Fund (UNG) is down 3.68% to 11.74 from 12.19, underscoring how supply, weather, and storage dynamics can move gas independently from crude. Broad commodities via DBC have not printed a fresh trade at the open; Friday’s last trade was 22.85, while today’s indicated quotes are lower on the ask, so we’ll look for confirmed prints later in the session to assess direction.
In foreign exchange, the dollar is softer to start: EURUSD sits near 1.1752, above its 1.1715 open, signaling modest euro strength. A softer dollar often coincides with firmer precious metals and can provide a tailwind to multinational earnings translations if sustained. In digital assets, crypto is firmer: Bitcoin (BTCUSD) trades around 89,917 on a mark basis, up roughly 1.15% versus its indicated open, while Ether (ETHUSD) is up about 0.59% to 3,057. While one recent forecast called for sharply higher Bitcoin prices next year, today’s opening marks simply show risk appetite in crypto holding up alongside the bid for gold and equities.
Notable company and thematic news flow over the past 24 hours rounds out the narrative. Several items focus on AI infrastructure and data center demand, lending support to technology’s leadership at the open. Commentary also pointed out that even as the stock market rally has broadened out, the S&P 500’s progress still relies heavily on tech leadership—consistent with XLK outperforming this morning. In media, reports that Larry Ellison is personally guaranteeing a large component of financing for a proposed Paramount–Warner Bros. Discovery combination speaks to ongoing consolidation themes, though single‑name moves are outside the scope of the broad ETF data we’re tracking at the open. In macro, Morgan Stanley’s survey of potential “macro surprises” for next year highlights the risk that consensus views could be challenged—something both bond and equity investors should keep in mind as they extrapolate year‑end trends into 2026. Finally, cannabis policy remains in focus after movement toward reclassification last week, though that is not directly reflected in sector ETF prices at the bell.
Putting it together, the market is embracing a cautiously risk‑on posture into the holiday week: growth leadership, constructive small‑cap action, and a softer dollar, accompanied by strength in gold and silver and a modestly higher oil print. Bonds are little changed to slightly weaker, consistent with long yields still near the top of their recent range. The key questions for the session and the week are whether tech can extend leadership without overheating, whether breadth can continue to improve (as suggested by IWM’s early outperformance), and whether defensive sectors can stabilize without a drop in yields.
What to watch from here
• Follow‑through in tech: XLK’s +0.85% open leads the tape. Recent AI‑related enthusiasm has helped, but several observers caution that the “AI trade may not be back for good” until catalysts re‑emerge. Sustained leadership from semis and cloud will be important for QQQ to extend gains.
• Breadth and small caps: IWM’s +0.60% suggests ongoing broadening. A continued bid for small caps into year‑end would support the idea that investors are leaning into cyclical domestic exposure, not just a handful of mega‑cap winners.
• Long‑end yields vs duration: TLT’s −0.17% and IEF’s −0.07% hint at upward pressure on yields. If the 10‑year remains around 4.1%–4.2%, equity multiples should be stable; a break higher could re‑introduce valuation tension.
• Precious metals and the dollar: GLD’s +1.99% and SLV’s +2.74% alongside a softer dollar (EURUSD around 1.175) indicate hedging demand. If the dollar weakens further, that could continue to support metals and U.S. multinationals.
• Energy divergence: Watch whether XLE’s −1.01% stabilizes if USO remains bid. Re‑coupling would be a healthier signal for cyclicals more broadly.
Risks to the view
• Macro surprise risk: As Morgan Stanley’s cross‑disciplinary work notes, consensus can be wrong in ways that materially affect both rates and earnings expectations.
• Technical distortions in inflation: Williams’s point on CPI “technical factors” cautions against over‑reading recent benign prints; an upside surprise would pressure duration and high‑multiple equities.
• Year‑end rebalancing and liquidity: Thin holiday liquidity can exacerbate moves. A Bank of America‑flagged sell signal tied to heavy flows and broad participation also argues for vigilance around potential pullbacks.
• Geopolitical premium: Oil’s firmness amid Venezuela headlines highlights the risk of supply‑side shocks that would complicate the disinflation narrative.
Bottom line
The opening setup tilts constructive. SPY (+0.47%), QQQ (+0.69%), and IWM (+0.60%) point to a modestly risk‑on tone with tech leadership (XLK +0.85%) and supportive breadth. Precious metals’ strength and a softer dollar complement that backdrop. The constraint remains long yields holding above 4%—a moderate headwind to duration but not yet a decisive break higher. With only a handful of sessions left in the year, execution risk shifts to whether this rotation can sustain without a macro surprise or flow‑driven air pocket. For now, the path of least resistance early in the session is higher, led by technology, with an eye on yields, breadth, and commodities for confirmation.
Markets opened on a constructive note Monday, kicking off a holiday‑shortened trading week with gains across the major U.S. equity benchmarks and leadership from technology. As the bell rang, the SPDR S&P 500 ETF (SPY) traded at 683.78, up 0.47% from Friday’s close of 680.59. The Nasdaq 100 proxy (QQQ) rose 0.69% to 621.28 versus a 617.05 prior close, while the Dow Jones Industrial Average ETF (DIA) added 0.20% to 482.13. Small caps outperformed: the iShares Russell 2000 ETF (IWM) advanced 0.60% to 252.30, from 250.79 at Friday’s close. Those moves align with weekend commentary that investors remain on watch for a seasonal “Santa Claus rally” in the final trading days of the year.
Macro context at the open remains pivotal. Treasury yields, based on the latest available levels from late last week, show the 10‑year at 4.12%, with the 2‑year at 3.46% and the 30‑year at 4.80%. That implies a positive 2s/10s slope of roughly 66 basis points and a term premium that continues to lean against the longest duration. Inflation data updated through November show the headline CPI index level at 325.031 and core CPI at 331.068. While those are index levels (not percentage changes), they set the stage for how investors are parsing inflation trends into year‑end. Importantly, New York Fed President John Williams noted that “technical factors” likely distorted November’s CPI lower than it otherwise would have been. That nuance may explain why inflation swaps and breakevens have not collapsed and why Treasury yields remain comfortably above 4% on the 10‑year.
Inflation expectations models for December point to a near‑term 1‑year expectation of about 3.20%, stepping down to 2.42% at 5 years and 2.34% at 10 years, with 30‑year expectations at 2.44%. This downward‑sloping expectations curve suggests markets still see inflation converging toward something close to the Federal Reserve’s long‑run target over time, even as the nearer‑term path may be a bit bumpier. That is broadly supportive for equities—particularly growth and duration‑sensitive tech—so long as realized inflation does not reaccelerate meaningfully.
Equities and sectors at the open show a familiar rotation pattern. Technology is out front: the Technology Select Sector SPDR (XLK) trades at 145.83, up 0.85% from a 144.60 prior close, outpacing the broader tape. Several recent articles highlighted renewed enthusiasm around AI hardware and memory capacity, with Micron’s strong update described as having an “Nvidia moment,” and broader commentary noting that chip stocks rose late last week even if the AI trade may not be fully back on a sustained basis yet. Those narratives align with XLK’s outperformance to start the day and QQQ’s relative strength versus SPY.
On the other side of the ledger, healthcare and energy are soft at the open. The Health Care Select Sector SPDR (XLV) is down 0.70% to 153.85 from 154.94. Energy (XLE) is lower by 1.01% at 42.20 versus 42.63 previously, even with crude benchmarks firmer via the United States Oil Fund (USO), which is up 2.22% to 69.54 from 68.03. Sector‑level divergences between commodity‑linked ETFs and the integrated energy equity complex can occur as investors weigh capital allocation priorities, refining margins, and year‑end positioning; the opening snapshot simply shows energy equities lagging despite firmer oil.
Financials are essentially flat to slightly lower: the Financial Select Sector SPDR (XLF) trades at 54.775, down 0.12% from 54.84. That is consistent with a rates backdrop where the front end is relatively anchored and the long end still carries a premium, leaving net interest margin expectations and credit provisioning assumptions little changed to start the session. With breadth improving—evidenced by IWM’s 0.60% gain—investors appear willing to add cyclical beta, but not indiscriminately across rate‑sensitive groups.
Bond proxies are modestly softer. The long‑duration iShares 20+ Year Treasury Bond ETF (TLT) is down 0.17% to 87.41 from 87.55, while the 7–10 year iShares (IEF) dips 0.07% to 96.17 from 96.24. The 1–3 year iShares (SHY) is effectively flat, down 0.02% to 82.7465. The gentle pressure on duration‑heavy Treasurys lines up with 10‑ and 30‑year yields holding above 4% and 4.7%, respectively, and with the market digesting mixed signals on inflation: near‑term relief versus Williams’s caution about technical distortions in the latest CPI print. A separate note that bonds have had their best year since 2020 also tempers expectations for a repeat performance next year, as a less certain inflation and rate path could make returns more volatile.
Commodities are an important part of the opening tone today. Gold is strong: the SPDR Gold Shares (GLD) jumps 1.99% to 406.95 compared with 399.02 at Friday’s close. Silver follows suit, with the iShares Silver Trust (SLV) up 2.74% to 62.60 from 60.93. A strategist recently framed the move in terms of a “great debasement trade,” tying fresh highs in precious metals to rising geopolitical risks and continued demand for inflation hedges. While inflation expectations are anchored over five to ten years, the bid for gold and silver suggests investors are hedging tail risks or seeking diversification against currency and policy uncertainty.
Crude oil opens firmer, with USO up 2.22% to 69.54. Recent reporting noted oil prices were steady after comments from President Trump about not ruling out a conflict with Venezuela; regardless of the politics, the tape today reflects a modest risk premium and/or positioning as the year winds down. Natural gas diverges: the United States Natural Gas Fund (UNG) is down 3.68% to 11.74 from 12.19, underscoring how supply, weather, and storage dynamics can move gas independently from crude. Broad commodities via DBC have not printed a fresh trade at the open; Friday’s last trade was 22.85, while today’s indicated quotes are lower on the ask, so we’ll look for confirmed prints later in the session to assess direction.
In foreign exchange, the dollar is softer to start: EURUSD sits near 1.1752, above its 1.1715 open, signaling modest euro strength. A softer dollar often coincides with firmer precious metals and can provide a tailwind to multinational earnings translations if sustained. In digital assets, crypto is firmer: Bitcoin (BTCUSD) trades around 89,917 on a mark basis, up roughly 1.15% versus its indicated open, while Ether (ETHUSD) is up about 0.59% to 3,057. While one recent forecast called for sharply higher Bitcoin prices next year, today’s opening marks simply show risk appetite in crypto holding up alongside the bid for gold and equities.
Notable company and thematic news flow over the past 24 hours rounds out the narrative. Several items focus on AI infrastructure and data center demand, lending support to technology’s leadership at the open. Commentary also pointed out that even as the stock market rally has broadened out, the S&P 500’s progress still relies heavily on tech leadership—consistent with XLK outperforming this morning. In media, reports that Larry Ellison is personally guaranteeing a large component of financing for a proposed Paramount–Warner Bros. Discovery combination speaks to ongoing consolidation themes, though single‑name moves are outside the scope of the broad ETF data we’re tracking at the open. In macro, Morgan Stanley’s survey of potential “macro surprises” for next year highlights the risk that consensus views could be challenged—something both bond and equity investors should keep in mind as they extrapolate year‑end trends into 2026. Finally, cannabis policy remains in focus after movement toward reclassification last week, though that is not directly reflected in sector ETF prices at the bell.
Putting it together, the market is embracing a cautiously risk‑on posture into the holiday week: growth leadership, constructive small‑cap action, and a softer dollar, accompanied by strength in gold and silver and a modestly higher oil print. Bonds are little changed to slightly weaker, consistent with long yields still near the top of their recent range. The key questions for the session and the week are whether tech can extend leadership without overheating, whether breadth can continue to improve (as suggested by IWM’s early outperformance), and whether defensive sectors can stabilize without a drop in yields.
What to watch from here
• Follow‑through in tech: XLK’s +0.85% open leads the tape. Recent AI‑related enthusiasm has helped, but several observers caution that the “AI trade may not be back for good” until catalysts re‑emerge. Sustained leadership from semis and cloud will be important for QQQ to extend gains.
• Breadth and small caps: IWM’s +0.60% suggests ongoing broadening. A continued bid for small caps into year‑end would support the idea that investors are leaning into cyclical domestic exposure, not just a handful of mega‑cap winners.
• Long‑end yields vs duration: TLT’s −0.17% and IEF’s −0.07% hint at upward pressure on yields. If the 10‑year remains around 4.1%–4.2%, equity multiples should be stable; a break higher could re‑introduce valuation tension.
• Precious metals and the dollar: GLD’s +1.99% and SLV’s +2.74% alongside a softer dollar (EURUSD around 1.175) indicate hedging demand. If the dollar weakens further, that could continue to support metals and U.S. multinationals.
• Energy divergence: Watch whether XLE’s −1.01% stabilizes if USO remains bid. Re‑coupling would be a healthier signal for cyclicals more broadly.
Risks to the view
• Macro surprise risk: As Morgan Stanley’s cross‑disciplinary work notes, consensus can be wrong in ways that materially affect both rates and earnings expectations.
• Technical distortions in inflation: Williams’s point on CPI “technical factors” cautions against over‑reading recent benign prints; an upside surprise would pressure duration and high‑multiple equities.
• Year‑end rebalancing and liquidity: Thin holiday liquidity can exacerbate moves. A Bank of America‑flagged sell signal tied to heavy flows and broad participation also argues for vigilance around potential pullbacks.
• Geopolitical premium: Oil’s firmness amid Venezuela headlines highlights the risk of supply‑side shocks that would complicate the disinflation narrative.
Bottom line
The opening setup tilts constructive. SPY (+0.47%), QQQ (+0.69%), and IWM (+0.60%) point to a modestly risk‑on tone with tech leadership (XLK +0.85%) and supportive breadth. Precious metals’ strength and a softer dollar complement that backdrop. The constraint remains long yields holding above 4%—a moderate headwind to duration but not yet a decisive break higher. With only a handful of sessions left in the year, execution risk shifts to whether this rotation can sustain without a macro surprise or flow‑driven air pocket. For now, the path of least resistance early in the session is higher, led by technology, with an eye on yields, breadth, and commodities for confirmation.