State of Market: Open 01/12/26
Stocks open lower as Fed probe jitters lift gold; banks and tech slip ahead of earnings
GLD and SLV jump; SPY, QQQ, XLF trade lower; bond ETFs soften as policy uncertainty and geopolitics dominate the open
TendieTensor.com State of Market Open
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Equities opened on the back foot Monday, with major U.S. index ETFs slipping as investors digested an escalation in policy uncertainty around the Federal Reserve and a busy week of earnings for the financial sector. The tone at the open reflects a classic risk-off skew: precious metals are rallying, mega-cap tech is softer, financials are under pressure, and Treasurys are weaker through ETFs, suggesting a modest rise in yields.
At 9:30 a.m. ET, the SPDR S&P 500 ETF Trust (SPY) traded at 690.93, down 0.45% versus Friday’s close of 694.07. The Invesco QQQ Trust (QQQ) opened at 623.18, lower by 0.55% from 626.65, signaling continued pressure on the growth complex. The Dow proxy (DIA) was off 0.67% to 491.69 versus 495.02, while small caps via the iShares Russell 2000 ETF (IWM) declined 0.48% to 258.98 from 260.23. The breadth of the early weakness aligns with headline risk tied to the central bank, upcoming bank results, and continued rotation beneath the surface of the market.
Macro backdrop: policy, inflation, and yields
Over the weekend and into Monday morning, the policy narrative sharpened. Headlines note the Department of Justice opened an investigation into Fed Chair Jerome Powell, an episode Powell characterized as threatening the central bank’s independence. Additional political cross-currents include a Republican senator signaling opposition to prospective Fed nominees in the wake of the probe. Markets have become more sensitive to this Powell–Trump conflict dynamic, a shift underscored by the concurrent bid in precious metals. Against this political backdrop, the most recent point-in-time yield levels available show the 10-year Treasury at 4.19% and the 30-year at 4.85% as of January 8, with the 2-year at 3.49% and the 5-year at 3.74. While those are static reference marks, ETF pricing at the open implies a slight downtick in Treasury prices, consistent with marginally higher yields versus Friday’s close.
Inflation remains the other key axis. As of November 2025, headline CPI stood at 325.03 (index level) and core CPI at 331.07. Market-based and model-based inflation expectations remain anchored: one-year modeled expectations sit around 3.20%, while five- and ten-year expectations are near 2.28% and 2.24%, respectively. This combination—policy uncertainty but medium-term inflation expectations near the 2%–2.5% zone—helps explain why the equity market has been comfortable broadening out in recent weeks even as leadership rotates. Still, political and policy surprises can dominate near-term price action, as today’s open shows.
Equities: broad indices and early sector tone
Early trading points to a defensive tilt. SPY (-0.45%) and QQQ (-0.55%) reflect caution toward cyclicals and growth simultaneously. The relative underperformance of DIA (-0.67%) suggests investors are taking down exposure in economically sensitive large caps, even as small caps (IWM -0.48%) track broader weakness but aren’t leading it.
Underneath the surface, sector ETFs are sending a mixed but risk-averse message. Financials (XLF) are down 1.35% at 54.98 (from 55.73) as the largest banks prepare to report. MarketWatch highlights that expectations are building for big banks to set higher performance targets in a lighter regulatory environment, and separate analysis points to upside potential in select regional banks given lower valuations. Nonetheless, the first prints of earnings season often reset expectations, and the tape shows traders marking down the group into the numbers.
Technology (XLK) is lower by 0.55% at 145.35 (from 146.15). Recent commentary has emphasized rotation away from last year’s winners and toward overlooked names as earnings approach. That theme dovetails with headlines discussing the broadening U.S. rally in early 2026 despite weakness in parts of big tech. Meanwhile, individual stock narratives remain active: Intel has drawn favorable attention after recent updates and high-profile praise, while debate around Apple’s near-term setup continues after a stretch of declines and as investors weigh its AI roadmap.
Energy (XLE) is softer by 0.42%, trading near 42.33 versus 42.51, even as crude proxies tick higher. The disconnect likely reflects stock-specific and positioning factors, as oil-related headlines have been numerous: from developments around Venezuela policy and U.S. company engagement to separate reports on geopolitical risks and oil’s roughly 3% weekly advance through last week. Health care (XLV) is modestly green, up 0.07% at 157.42, offering a degree of defensiveness consistent with the risk tone. This comes alongside consumer and health policy stories, including Amazon Pharmacy’s expansion into GLP-1 distribution, that may influence stock selection within the sector and adjacent consumer-health exposures.
Bonds: ETFs point to slightly higher yields at the open
Treasury ETF pricing shows a mild drift lower: the iShares 20+ Year Treasury Bond ETF (TLT) is down 0.52% to 87.48 from 87.93, the iShares 7–10 Year Treasury Bond ETF (IEF) is off 0.17% to 96.14 (from 96.30), and the 1–3 Year Treasury ETF (SHY) is essentially flat at 82.82 (-0.01%). With the latest point-in-time yields as of January 8 at 4.19% (10-year) and 4.85% (30-year), the open suggests modest additional upward pressure on yields compared with Friday’s close. That’s a noteworthy contrast to the risk-off tone in equities, and likely reflects the market’s push-pull between policy uncertainty (which can support safe-haven flows) and the notion that a resilient economy with anchored long-run inflation expectations may limit the urgency for deeper rate cuts.
Commodities: precious metals surge, crude inches up, gas firmer
The standout move this morning is in precious metals. The SPDR Gold Shares (GLD) is up 1.75% at 421.71 from 414.47, while the iShares Silver Trust (SLV) is up 5.31% at 76.22 from 72.38. This strength maps directly to the weekend’s policy headlines: MarketWatch flagged that precious metals prices have been sensitive to the Powell–Trump conflict, and a separate survey of institutional managers suggested many remained constructive on gold even after a strong 2025. The juxtaposition of political risk and still-contained long-term inflation expectations can support gold both as a hedge and as a portfolio diversifier.
Crude is modestly firmer. The United States Oil Fund (USO) is up 0.19% at 70.91 (from 70.78). Recent coverage emphasized that oil’s near-term resilience owes not only to Venezuela-related developments but also to risks elsewhere, including Iran. The energy-equity underperformance at the open suggests positioning fatigue or caution into policy headlines rather than a commodity tape that’s turning lower. Natural gas (UNG) is up 2.40% at 10.65 (from 10.40), a constructive start that can be weather- and supply-demand sensitive. Broad commodities via DBC show no new open print; the last trade matched Friday’s 22.90, with a current quoted market above that level.
FX and crypto: euro a bit firmer; crypto slips
In foreign exchange, EURUSD is a touch firmer around 1.1676 at the open versus its listed open mark near 1.1655. A slightly stronger euro alongside higher long rates and softer equities underscores how today’s drivers are idiosyncratic (policy risk and earnings) rather than a simple global growth shock.
In digital assets, Bitcoin (BTCUSD) trades near 90,090 on the mark, down roughly 2% from its stated open, while Ether (ETHUSD) is about 2.6% lower versus its open. The divergence between rising gold and softer crypto has precedent in periods where market participants emphasize institutional and policy hedges over speculative risk. It also echoes commentary from traditional macro voices favoring precious metals over crypto in a higher-uncertainty policy regime.
Notable company and thematic headlines
- Federal Reserve and policy: Coverage highlights a DOJ investigation into Chair Jerome Powell, which Powell said poses a threat to Fed independence. Separate reporting notes opposition from a Republican senator to potential Fed nominees following the probe. Markets have become more reactive to this conflict, with precious metals rallying in sympathy.
- Banks and earnings: MarketWatch outlines critical metrics to watch as big banks kick off earnings this week, while a separate analysis points to potential 2026 upside in select regional banks on valuation. Despite that, XLF is lower at the open as investors mark down the group into results.
- Retail and consumer: Early season read-throughs cited by CNBC indicate the 2025 holiday period delivered modest growth—solid but not spectacular—which can temper near-term enthusiasm for consumer cyclicals. Conversely, Walmart’s upward momentum following AI initiatives and index inclusion serves as a reminder that idiosyncratic drivers can trump macro for select retail leaders.
- Technology and AI: Multiple pieces focus on AI leadership and infrastructure. Intel’s recent momentum drew attention after favorable commentary, while broader notes discuss rotation away from megacap winners ahead of earnings. Strategists continue to debate the durability of AI investment in 2026, yet top-down cases remain constructive for companies leveraged to AI infrastructure and data centers. Alphabet received specific bullish attention, while Oracle and Amazon were highlighted as potential AI beneficiaries despite perceived laggard status.
- Energy and geopolitics: Oil’s firmness connects to headlines spanning Venezuela and Iran. One report noted a threat to exclude a major U.S. oil company from Venezuelan deals, underscoring the policy risk premium. Meanwhile, airline consolidation re-emerged with an announcement of an Allegiant–Sun Country tie-up, a reminder of shifting industry structures in travel and transport.
- Autos and EVs: A noted U.S. automaker flagged additional write-downs as it pivots away from EVs, reinforcing the current normalization phase in EV demand and spending.
Synthesis at the open
The first prints on Monday tell a coherent story: policy risk around the central bank and geopolitics is weighing on risk assets, especially financials and growth, while pushing up traditional hedges such as gold and silver. Treasurys are not providing their usual offset—ETF prices are down—suggesting that the balance of risks includes both uncertainty and still-sticky term premia. Within equities, the rotation theme persists: mega-cap tech remains in digestion mode, while idiosyncratic winners in retail and AI infrastructure continue to capture attention. Banks face a pivotal few sessions as investors look for clarity on net interest income trajectories, credit quality, capital returns, and regulatory posture.
Outlook: what to watch next
- Bank earnings: With financials under pressure at the open, delivery versus expectations on NII, deposit costs, trading and investment banking fees, credit normalization, and capital return policies will set the tone for the sector (XLF) and the broader market’s cyclicality bet.
- Policy headlines: Any additional developments regarding the DOJ’s probe of the Fed or personnel/nomination dynamics could continue to influence cross-asset correlations, particularly gold (GLD), the dollar, and front-end rate expectations.
- Energy and geopolitics: Follow-through on Venezuela-related policy and any new Middle East developments could sway crude (USO) and energy equities (XLE), even as today’s open shows a divergence between commodities and energy stocks.
- Rotation and AI: Watch for incremental data points around AI infrastructure demand and hyperscaler capex, which remain central to tech (XLK) leadership debates amid rotation.
- Consumer health and GLP-1s: The expanding distribution footprint for weight-loss drugs via major platforms adds a steady drumbeat to both health care (XLV) and select consumer names; monitor for volume and reimbursement updates.
Risks
- Policy and central bank independence: The Fed probe injects an unusual and hard-to-quantify risk that can elevate volatility and complicate the path for rate policy messaging.
- Regulatory and legal uncertainty: Potential changes in tariff policy and any court actions could alter inflation and growth trajectories in unexpected ways.
- Earnings execution: A miss or cautious outlook from early-reporting banks can tighten financial conditions via equity and credit channels.
- Geopolitical shocks: Oil supply headlines or escalations can quickly reprice inflation expectations and energy equities.
- Liquidity and positioning: After a strong start to 2026 for many non-tech pockets, thin January liquidity could amplify moves in both directions.
Bottom line: The market opened risk-off as policy uncertainty overshadowed otherwise anchored inflation expectations. Gold and silver strength, alongside weakness in banks and big tech, define the tone. With financials set to report and political headlines in focus, near-term direction will hinge on whether earnings can reassert fundamentals over the current policy noise.
Equities opened on the back foot Monday, with major U.S. index ETFs slipping as investors digested an escalation in policy uncertainty around the Federal Reserve and a busy week of earnings for the financial sector. The tone at the open reflects a classic risk-off skew: precious metals are rallying, mega-cap tech is softer, financials are under pressure, and Treasurys are weaker through ETFs, suggesting a modest rise in yields.
At 9:30 a.m. ET, the SPDR S&P 500 ETF Trust (SPY) traded at 690.93, down 0.45% versus Friday’s close of 694.07. The Invesco QQQ Trust (QQQ) opened at 623.18, lower by 0.55% from 626.65, signaling continued pressure on the growth complex. The Dow proxy (DIA) was off 0.67% to 491.69 versus 495.02, while small caps via the iShares Russell 2000 ETF (IWM) declined 0.48% to 258.98 from 260.23. The breadth of the early weakness aligns with headline risk tied to the central bank, upcoming bank results, and continued rotation beneath the surface of the market.
Macro backdrop: policy, inflation, and yields
Over the weekend and into Monday morning, the policy narrative sharpened. Headlines note the Department of Justice opened an investigation into Fed Chair Jerome Powell, an episode Powell characterized as threatening the central bank’s independence. Additional political cross-currents include a Republican senator signaling opposition to prospective Fed nominees in the wake of the probe. Markets have become more sensitive to this Powell–Trump conflict dynamic, a shift underscored by the concurrent bid in precious metals. Against this political backdrop, the most recent point-in-time yield levels available show the 10-year Treasury at 4.19% and the 30-year at 4.85% as of January 8, with the 2-year at 3.49% and the 5-year at 3.74. While those are static reference marks, ETF pricing at the open implies a slight downtick in Treasury prices, consistent with marginally higher yields versus Friday’s close.
Inflation remains the other key axis. As of November 2025, headline CPI stood at 325.03 (index level) and core CPI at 331.07. Market-based and model-based inflation expectations remain anchored: one-year modeled expectations sit around 3.20%, while five- and ten-year expectations are near 2.28% and 2.24%, respectively. This combination—policy uncertainty but medium-term inflation expectations near the 2%–2.5% zone—helps explain why the equity market has been comfortable broadening out in recent weeks even as leadership rotates. Still, political and policy surprises can dominate near-term price action, as today’s open shows.
Equities: broad indices and early sector tone
Early trading points to a defensive tilt. SPY (-0.45%) and QQQ (-0.55%) reflect caution toward cyclicals and growth simultaneously. The relative underperformance of DIA (-0.67%) suggests investors are taking down exposure in economically sensitive large caps, even as small caps (IWM -0.48%) track broader weakness but aren’t leading it.
Underneath the surface, sector ETFs are sending a mixed but risk-averse message. Financials (XLF) are down 1.35% at 54.98 (from 55.73) as the largest banks prepare to report. MarketWatch highlights that expectations are building for big banks to set higher performance targets in a lighter regulatory environment, and separate analysis points to upside potential in select regional banks given lower valuations. Nonetheless, the first prints of earnings season often reset expectations, and the tape shows traders marking down the group into the numbers.
Technology (XLK) is lower by 0.55% at 145.35 (from 146.15). Recent commentary has emphasized rotation away from last year’s winners and toward overlooked names as earnings approach. That theme dovetails with headlines discussing the broadening U.S. rally in early 2026 despite weakness in parts of big tech. Meanwhile, individual stock narratives remain active: Intel has drawn favorable attention after recent updates and high-profile praise, while debate around Apple’s near-term setup continues after a stretch of declines and as investors weigh its AI roadmap.
Energy (XLE) is softer by 0.42%, trading near 42.33 versus 42.51, even as crude proxies tick higher. The disconnect likely reflects stock-specific and positioning factors, as oil-related headlines have been numerous: from developments around Venezuela policy and U.S. company engagement to separate reports on geopolitical risks and oil’s roughly 3% weekly advance through last week. Health care (XLV) is modestly green, up 0.07% at 157.42, offering a degree of defensiveness consistent with the risk tone. This comes alongside consumer and health policy stories, including Amazon Pharmacy’s expansion into GLP-1 distribution, that may influence stock selection within the sector and adjacent consumer-health exposures.
Bonds: ETFs point to slightly higher yields at the open
Treasury ETF pricing shows a mild drift lower: the iShares 20+ Year Treasury Bond ETF (TLT) is down 0.52% to 87.48 from 87.93, the iShares 7–10 Year Treasury Bond ETF (IEF) is off 0.17% to 96.14 (from 96.30), and the 1–3 Year Treasury ETF (SHY) is essentially flat at 82.82 (-0.01%). With the latest point-in-time yields as of January 8 at 4.19% (10-year) and 4.85% (30-year), the open suggests modest additional upward pressure on yields compared with Friday’s close. That’s a noteworthy contrast to the risk-off tone in equities, and likely reflects the market’s push-pull between policy uncertainty (which can support safe-haven flows) and the notion that a resilient economy with anchored long-run inflation expectations may limit the urgency for deeper rate cuts.
Commodities: precious metals surge, crude inches up, gas firmer
The standout move this morning is in precious metals. The SPDR Gold Shares (GLD) is up 1.75% at 421.71 from 414.47, while the iShares Silver Trust (SLV) is up 5.31% at 76.22 from 72.38. This strength maps directly to the weekend’s policy headlines: MarketWatch flagged that precious metals prices have been sensitive to the Powell–Trump conflict, and a separate survey of institutional managers suggested many remained constructive on gold even after a strong 2025. The juxtaposition of political risk and still-contained long-term inflation expectations can support gold both as a hedge and as a portfolio diversifier.
Crude is modestly firmer. The United States Oil Fund (USO) is up 0.19% at 70.91 (from 70.78). Recent coverage emphasized that oil’s near-term resilience owes not only to Venezuela-related developments but also to risks elsewhere, including Iran. The energy-equity underperformance at the open suggests positioning fatigue or caution into policy headlines rather than a commodity tape that’s turning lower. Natural gas (UNG) is up 2.40% at 10.65 (from 10.40), a constructive start that can be weather- and supply-demand sensitive. Broad commodities via DBC show no new open print; the last trade matched Friday’s 22.90, with a current quoted market above that level.
FX and crypto: euro a bit firmer; crypto slips
In foreign exchange, EURUSD is a touch firmer around 1.1676 at the open versus its listed open mark near 1.1655. A slightly stronger euro alongside higher long rates and softer equities underscores how today’s drivers are idiosyncratic (policy risk and earnings) rather than a simple global growth shock.
In digital assets, Bitcoin (BTCUSD) trades near 90,090 on the mark, down roughly 2% from its stated open, while Ether (ETHUSD) is about 2.6% lower versus its open. The divergence between rising gold and softer crypto has precedent in periods where market participants emphasize institutional and policy hedges over speculative risk. It also echoes commentary from traditional macro voices favoring precious metals over crypto in a higher-uncertainty policy regime.
Notable company and thematic headlines
- Federal Reserve and policy: Coverage highlights a DOJ investigation into Chair Jerome Powell, which Powell said poses a threat to Fed independence. Separate reporting notes opposition from a Republican senator to potential Fed nominees following the probe. Markets have become more reactive to this conflict, with precious metals rallying in sympathy.
- Banks and earnings: MarketWatch outlines critical metrics to watch as big banks kick off earnings this week, while a separate analysis points to potential 2026 upside in select regional banks on valuation. Despite that, XLF is lower at the open as investors mark down the group into results.
- Retail and consumer: Early season read-throughs cited by CNBC indicate the 2025 holiday period delivered modest growth—solid but not spectacular—which can temper near-term enthusiasm for consumer cyclicals. Conversely, Walmart’s upward momentum following AI initiatives and index inclusion serves as a reminder that idiosyncratic drivers can trump macro for select retail leaders.
- Technology and AI: Multiple pieces focus on AI leadership and infrastructure. Intel’s recent momentum drew attention after favorable commentary, while broader notes discuss rotation away from megacap winners ahead of earnings. Strategists continue to debate the durability of AI investment in 2026, yet top-down cases remain constructive for companies leveraged to AI infrastructure and data centers. Alphabet received specific bullish attention, while Oracle and Amazon were highlighted as potential AI beneficiaries despite perceived laggard status.
- Energy and geopolitics: Oil’s firmness connects to headlines spanning Venezuela and Iran. One report noted a threat to exclude a major U.S. oil company from Venezuelan deals, underscoring the policy risk premium. Meanwhile, airline consolidation re-emerged with an announcement of an Allegiant–Sun Country tie-up, a reminder of shifting industry structures in travel and transport.
- Autos and EVs: A noted U.S. automaker flagged additional write-downs as it pivots away from EVs, reinforcing the current normalization phase in EV demand and spending.
Synthesis at the open
The first prints on Monday tell a coherent story: policy risk around the central bank and geopolitics is weighing on risk assets, especially financials and growth, while pushing up traditional hedges such as gold and silver. Treasurys are not providing their usual offset—ETF prices are down—suggesting that the balance of risks includes both uncertainty and still-sticky term premia. Within equities, the rotation theme persists: mega-cap tech remains in digestion mode, while idiosyncratic winners in retail and AI infrastructure continue to capture attention. Banks face a pivotal few sessions as investors look for clarity on net interest income trajectories, credit quality, capital returns, and regulatory posture.
Outlook: what to watch next
- Bank earnings: With financials under pressure at the open, delivery versus expectations on NII, deposit costs, trading and investment banking fees, credit normalization, and capital return policies will set the tone for the sector (XLF) and the broader market’s cyclicality bet.
- Policy headlines: Any additional developments regarding the DOJ’s probe of the Fed or personnel/nomination dynamics could continue to influence cross-asset correlations, particularly gold (GLD), the dollar, and front-end rate expectations.
- Energy and geopolitics: Follow-through on Venezuela-related policy and any new Middle East developments could sway crude (USO) and energy equities (XLE), even as today’s open shows a divergence between commodities and energy stocks.
- Rotation and AI: Watch for incremental data points around AI infrastructure demand and hyperscaler capex, which remain central to tech (XLK) leadership debates amid rotation.
- Consumer health and GLP-1s: The expanding distribution footprint for weight-loss drugs via major platforms adds a steady drumbeat to both health care (XLV) and select consumer names; monitor for volume and reimbursement updates.
Risks
- Policy and central bank independence: The Fed probe injects an unusual and hard-to-quantify risk that can elevate volatility and complicate the path for rate policy messaging.
- Regulatory and legal uncertainty: Potential changes in tariff policy and any court actions could alter inflation and growth trajectories in unexpected ways.
- Earnings execution: A miss or cautious outlook from early-reporting banks can tighten financial conditions via equity and credit channels.
- Geopolitical shocks: Oil supply headlines or escalations can quickly reprice inflation expectations and energy equities.
- Liquidity and positioning: After a strong start to 2026 for many non-tech pockets, thin January liquidity could amplify moves in both directions.
Bottom line: The market opened risk-off as policy uncertainty overshadowed otherwise anchored inflation expectations. Gold and silver strength, alongside weakness in banks and big tech, define the tone. With financials set to report and political headlines in focus, near-term direction will hinge on whether earnings can reassert fundamentals over the current policy noise.