State of Market: Open 12/11/25
Stocks open mixed after Fed cut: Tech slips, Dow edges higher as curve steepens and metals firm
At the open, SPY and QQQ dip while DIA gains and IWM is flat. Financials and health care catch a bid, tech lags, bonds rally, silver extends strength, and oil and natural gas retreat. Traders weigh holiday-skewed jobless claims, a steeper curve, and ongoing AI-spend debate.
TendieTensor.com State of Market Open
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Opening overview
U.S. equities opened mixed on Thursday, with a modest pullback in large-cap growth contrasting with gains in the Dow and selected value and defensives. SPY opened near 685.33, about 0.3% below Wednesday’s close, while QQQ traded around 623.53, roughly 0.6% lower. DIA edged up to 482.41, a gain of about 0.2%, and small caps via IWM were essentially flat near 254.79. The tone reflects consolidation after the prior session’s Fed-driven rally and a gentle rotation toward financials and health care as the yield curve continues to steepen from recent lows.
Macro backdrop: yields, inflation, and expectations
Treasury yields as of December 9 point to a curve that is no longer inverted between the 2- and 10‑year tenors. The 2-year sits near 3.61%, the 5-year at 3.78%, the 10-year at 4.18%, and the 30-year at 4.80%. A 10s/2s spread of roughly +57 bps marks a meaningful steepening compared to much of the last two years. That slope change is consistent with the Fed’s final quarter-point rate cut of 2025 and the market’s perception that policy has moved closer to neutral. It also tends to favor financials—especially lenders—as net interest margins can stabilize or improve when the long end holds a premium to short rates.
On inflation, the most recent CPI and core CPI index levels (September 2025) stand at 324.368 and 330.542, respectively. While those are index levels (not rates of change), market-based inflation expectations are anchored: 5-year breakevens near 2.35%, 10-year near 2.27%, and the 5y5y forward around 2.18%. Taken together, inflation expectations remain close to the Fed’s long-run target range, giving policymakers flexibility to pause after this latest cut. Short-term macro noise persists—weekly jobless claims rose to a three-month high after Thanksgiving—but reporting suggests the increase is heavily influenced by holiday distortions and that layoffs remain historically low. That fits the narrative of a cooling but still resilient labor market.
Equities and sectors
Major index ETFs reflect a modest, rotation-heavy open:
- SPY (685.33 last vs. 687.57 prior close) is down about 0.3%.
- QQQ (623.53 vs. 627.61) is lower by roughly 0.6% as mega-cap tech consolidates.
- DIA (482.41 vs. 481.35) is up about 0.2%, continuing Wednesday’s leadership.
- IWM (254.79 vs. 254.81) is flat.
Sector ETFs show a mixed picture early:
- Financials (XLF 54.01 vs. 53.89) up about 0.2%, consistent with a steeper curve backdrop and upbeat bank commentary earlier this week.
- Health Care (XLV 152.94 vs. 152.14) up roughly 0.5%; the space continues to benefit from solid drug and device pipelines and defensiveness.
- Technology (XLK 146.87 vs. 148.73) down about 1.3%, consolidating after recent gains and amid ongoing debate about the sustainability and funding of AI-related capex.
- Energy (XLE 42.76 vs. 42.73) is marginally higher, though the commodity tape is mixed (see below).
Across single-name developments highlighted in the news flow, software and AI remain focal points. Adobe’s latest results showcased AI-driven strength, but commentary indicates the beat was not sufficient to lift the stock in the face of sentiment headwinds. Oracle’s mixed report, including concerns around financing strategy despite a growing AI deal pipeline, reinforced investor scrutiny of debt-funded AI infrastructure. By contrast, enthusiasm for custom silicon has analysts naming Broadcom a top pick into earnings. These crosscurrents likely contribute to today’s early underperformance of XLK.
Outside of pure software, the AI ecosystem debate broadened this week to questions about the durability of debt-fueled capex cycles, with some strategists flagging the long end of the curve as the cleanest market check on that risk. Meanwhile, Alphabet’s long-dated investment in SpaceX continues to be cited as a potential valuation tailwind as SpaceX’s private-market value rises. And in autos, investors are focused on how autonomy and AI narratives can offset EV demand volatility, with market attention on events showcasing software roadmaps.
In health care, Eli Lilly’s latest clinical update on a next-generation weight-loss therapy included a reported reduction in knee osteoarthritis pain along with substantial weight loss in a Phase 3 setting. While the report is specific to a single program, it underscores how innovation in metabolic disease continues to support the defensive-growth tone of the group, aligning with this morning’s firmer XLV. Elsewhere in the defensive category, CVS raised the bar earlier in the week by boosting revenue and profit guidance, a reminder that balanced managed-care and retail models can deliver in a decelerating macro.
Value and special situations also remain in focus. GE Vernova’s stock has been highlighted for making new highs on the back of a stronger long-term outlook tied to electrification demand and shareholder return plans. In consumer cyclicals, Carvana’s momentum continued recently with a long winning streak, as investors weigh potential index inclusion catalysts alongside execution improvements. While these are idiosyncratic stories, they show breadth beneath the headline indices and help explain resilience in DIA and pockets of IWM even as QQQ eases.
Bonds
Treasuries are steady-to-bid through ETF proxies at the open. TLT (88.70 vs. 88.31) is up about 0.4%, IEF (96.68 vs. 96.44) up near 0.3%, and SHY (82.895 vs. 82.85) modestly higher. The ETF tone is consistent with slightly lower yields this morning, even as the broader weekly discourse has emphasized volatility on the long end and a recently steeper term structure. Strategists continue to warn that persistent, unexplained firmness in long-term yields could be a sign of underlying stress if it reemerges; for now, the combination of anchored inflation expectations and a pause-minded Fed favors duration on pullbacks.
Commodities
Precious metals are firm. GLD trades essentially flat-to-slightly up (389.10 vs. 389.05), while SLV advances about 1.3% (56.815 vs. 56.07). Momentum in silver has been a standout trade in 2025; with prices having approached marquee round levels in spot markets recently, some see a near-term “make-or-break” technical juncture. Today’s early bid supports the idea that investors continue to use dips to build exposure amid benign real-rate dynamics.
Energy is softer. USO is down roughly 2.8% (68.60 vs. 70.54), UNG falls about 5.4% (13.485 vs. 14.26), and broad commodities (DBC 22.965 vs. 23.13) are off about 0.7%. News of a U.S. seizure of an oil tanker off Venezuela has raised geopolitical temperature, but price action suggests supply/demand considerations and risk positioning are dominant drivers into year-end. The downdraft in natural gas points to abundant supply and/or weather-related demand uncertainty overshadowing winter risk premia this morning.
FX and crypto
EURUSD indicates a softer dollar at the open, with the pair up about 0.4% from its quoted open (1.1742 mark vs. 1.1695 open). A softer dollar is typically supportive for commodities and non-U.S. risk, though today’s commodity tape is mixed due to energy weakness.
Crypto is modestly lower. Bitcoin’s mark price is near 90,168, down about 0.3% from its quoted open, and Ether is around 3,185, off roughly 1.0%. Sentiment has been influenced by recalibrated sell-side targets; one major bank cut its year-end Bitcoin target to $100,000 from $200,000, citing updated assumptions despite ongoing institutional adoption trends. The policy backdrop—both monetary and regulatory—remains an important driver into 2026.
Notable company and thematic news
- Fed policy and market tone: The Fed’s final cut of 2025 set a constructive tone into year-end, with the Dow gaining nearly 500 points on Wednesday and the S&P 500 finishing just shy of a record. Takeaways emphasize a likely pause from here, a data-dependent stance, and balance-sheet considerations going forward.
- Labor: Initial jobless claims rose to a three-month high post-Thanksgiving, but reporting points to holiday season distortions and still-low layoff trends. Equity and bond price action this morning suggests markets view the data as consistent with a gradual cooling, not a sharp deterioration.
- AI spending and earnings: Adobe’s AI-driven beat and Oracle’s mixed results sharpened debate around the sustainability and financing of AI infrastructure. Ahead of Broadcom earnings, enthusiasm for custom chips remains high, but investors are scrutinizing capital structures and return horizons.
- Fixed-income signaling: Commentators continue to flag the “mystery” of long-end yield behavior as a potential risk signal; today’s bid for duration tempers those worries, but the topic bears watching.
- Commodities and geopolitics: The U.S. seizure of an oil tanker off Venezuela highlights ongoing geopolitical frictions. Despite that headline, crude proxies are lower, underscoring that macro supply/demand and positioning are currently paramount.
- Health care innovation: Positive obesity-therapy developments and resilient managed-care/retail commentary support the bid in XLV.
- Corporate updates and momentum: GE Vernova’s outlook-supported highs and Carvana’s winning run illustrate continued stock- and theme-specific opportunities beneath the index surface.
Outlook: what to watch next
- Policy and the curve: With 2s near 3.61% and 10s around 4.18% as of the latest snapshots, further steepening would likely aid financials while tempering high-duration growth multiples. A re-flattening—especially via a long-end rally—would ease those pressures.
- Earnings and AI capex: Broadcom’s results and outlook will be a key read-through for custom silicon, networking, and AI infrastructure returns. Follow-through reactions in XLK will hinge on guidance and capex discipline across the value chain.
- Labor and growth: Upcoming claims and jobs reports will test the “low hire, low fire” equilibrium. Markets currently favor a glide path to trend growth rather than a sharp slowdown.
- Options and market mechanics: Positioning into December expiration could amplify moves in either direction; dealers’ hedging needs may become a near-term volatility catalyst if indices retrace.
- Energy and metals: Watch whether silver’s strength persists at technically significant levels and whether crude finds support as macro narratives outweigh geopolitics.
- Crypto catalysts: After target resets, price action will depend on liquidity, flows, and any incremental regulatory developments.
Risks
- AI investment sustainability: If debt funding for AI infrastructure tightens or returns undershoot, tech multiples could compress and spreads could widen.
- Bond market instability: Renewed, unexplained long-end yield spikes would pressure duration-sensitive assets and risk appetite.
- Policy and legal uncertainty: Trade and tariff litigation outcomes, as well as shifting policy priorities around student loans and regulation, could alter household cash flows and corporate plans.
- Geopolitical shocks: Energy market disruptions could reintroduce inflation volatility.
- Positioning and liquidity: Into year-end and option expiry, thin liquidity can magnify moves.
Bottom line
At the open, the market is consolidating a strong Fed-day rally with a rotation that favors financials and health care over megacap tech. A steeper curve, anchored inflation expectations, and a bid for duration provide a constructive macro base, but investors remain focused on the sustainability of AI-driven capex, long-end yield behavior, and near-term positioning dynamics. Barring a surprise in data or policy, the path of least resistance into year-end remains one of sector rotation and stock selection rather than broad multiple expansion.
Opening overview
U.S. equities opened mixed on Thursday, with a modest pullback in large-cap growth contrasting with gains in the Dow and selected value and defensives. SPY opened near 685.33, about 0.3% below Wednesday’s close, while QQQ traded around 623.53, roughly 0.6% lower. DIA edged up to 482.41, a gain of about 0.2%, and small caps via IWM were essentially flat near 254.79. The tone reflects consolidation after the prior session’s Fed-driven rally and a gentle rotation toward financials and health care as the yield curve continues to steepen from recent lows.
Macro backdrop: yields, inflation, and expectations
Treasury yields as of December 9 point to a curve that is no longer inverted between the 2- and 10‑year tenors. The 2-year sits near 3.61%, the 5-year at 3.78%, the 10-year at 4.18%, and the 30-year at 4.80%. A 10s/2s spread of roughly +57 bps marks a meaningful steepening compared to much of the last two years. That slope change is consistent with the Fed’s final quarter-point rate cut of 2025 and the market’s perception that policy has moved closer to neutral. It also tends to favor financials—especially lenders—as net interest margins can stabilize or improve when the long end holds a premium to short rates.
On inflation, the most recent CPI and core CPI index levels (September 2025) stand at 324.368 and 330.542, respectively. While those are index levels (not rates of change), market-based inflation expectations are anchored: 5-year breakevens near 2.35%, 10-year near 2.27%, and the 5y5y forward around 2.18%. Taken together, inflation expectations remain close to the Fed’s long-run target range, giving policymakers flexibility to pause after this latest cut. Short-term macro noise persists—weekly jobless claims rose to a three-month high after Thanksgiving—but reporting suggests the increase is heavily influenced by holiday distortions and that layoffs remain historically low. That fits the narrative of a cooling but still resilient labor market.
Equities and sectors
Major index ETFs reflect a modest, rotation-heavy open:
- SPY (685.33 last vs. 687.57 prior close) is down about 0.3%.
- QQQ (623.53 vs. 627.61) is lower by roughly 0.6% as mega-cap tech consolidates.
- DIA (482.41 vs. 481.35) is up about 0.2%, continuing Wednesday’s leadership.
- IWM (254.79 vs. 254.81) is flat.
Sector ETFs show a mixed picture early:
- Financials (XLF 54.01 vs. 53.89) up about 0.2%, consistent with a steeper curve backdrop and upbeat bank commentary earlier this week.
- Health Care (XLV 152.94 vs. 152.14) up roughly 0.5%; the space continues to benefit from solid drug and device pipelines and defensiveness.
- Technology (XLK 146.87 vs. 148.73) down about 1.3%, consolidating after recent gains and amid ongoing debate about the sustainability and funding of AI-related capex.
- Energy (XLE 42.76 vs. 42.73) is marginally higher, though the commodity tape is mixed (see below).
Across single-name developments highlighted in the news flow, software and AI remain focal points. Adobe’s latest results showcased AI-driven strength, but commentary indicates the beat was not sufficient to lift the stock in the face of sentiment headwinds. Oracle’s mixed report, including concerns around financing strategy despite a growing AI deal pipeline, reinforced investor scrutiny of debt-funded AI infrastructure. By contrast, enthusiasm for custom silicon has analysts naming Broadcom a top pick into earnings. These crosscurrents likely contribute to today’s early underperformance of XLK.
Outside of pure software, the AI ecosystem debate broadened this week to questions about the durability of debt-fueled capex cycles, with some strategists flagging the long end of the curve as the cleanest market check on that risk. Meanwhile, Alphabet’s long-dated investment in SpaceX continues to be cited as a potential valuation tailwind as SpaceX’s private-market value rises. And in autos, investors are focused on how autonomy and AI narratives can offset EV demand volatility, with market attention on events showcasing software roadmaps.
In health care, Eli Lilly’s latest clinical update on a next-generation weight-loss therapy included a reported reduction in knee osteoarthritis pain along with substantial weight loss in a Phase 3 setting. While the report is specific to a single program, it underscores how innovation in metabolic disease continues to support the defensive-growth tone of the group, aligning with this morning’s firmer XLV. Elsewhere in the defensive category, CVS raised the bar earlier in the week by boosting revenue and profit guidance, a reminder that balanced managed-care and retail models can deliver in a decelerating macro.
Value and special situations also remain in focus. GE Vernova’s stock has been highlighted for making new highs on the back of a stronger long-term outlook tied to electrification demand and shareholder return plans. In consumer cyclicals, Carvana’s momentum continued recently with a long winning streak, as investors weigh potential index inclusion catalysts alongside execution improvements. While these are idiosyncratic stories, they show breadth beneath the headline indices and help explain resilience in DIA and pockets of IWM even as QQQ eases.
Bonds
Treasuries are steady-to-bid through ETF proxies at the open. TLT (88.70 vs. 88.31) is up about 0.4%, IEF (96.68 vs. 96.44) up near 0.3%, and SHY (82.895 vs. 82.85) modestly higher. The ETF tone is consistent with slightly lower yields this morning, even as the broader weekly discourse has emphasized volatility on the long end and a recently steeper term structure. Strategists continue to warn that persistent, unexplained firmness in long-term yields could be a sign of underlying stress if it reemerges; for now, the combination of anchored inflation expectations and a pause-minded Fed favors duration on pullbacks.
Commodities
Precious metals are firm. GLD trades essentially flat-to-slightly up (389.10 vs. 389.05), while SLV advances about 1.3% (56.815 vs. 56.07). Momentum in silver has been a standout trade in 2025; with prices having approached marquee round levels in spot markets recently, some see a near-term “make-or-break” technical juncture. Today’s early bid supports the idea that investors continue to use dips to build exposure amid benign real-rate dynamics.
Energy is softer. USO is down roughly 2.8% (68.60 vs. 70.54), UNG falls about 5.4% (13.485 vs. 14.26), and broad commodities (DBC 22.965 vs. 23.13) are off about 0.7%. News of a U.S. seizure of an oil tanker off Venezuela has raised geopolitical temperature, but price action suggests supply/demand considerations and risk positioning are dominant drivers into year-end. The downdraft in natural gas points to abundant supply and/or weather-related demand uncertainty overshadowing winter risk premia this morning.
FX and crypto
EURUSD indicates a softer dollar at the open, with the pair up about 0.4% from its quoted open (1.1742 mark vs. 1.1695 open). A softer dollar is typically supportive for commodities and non-U.S. risk, though today’s commodity tape is mixed due to energy weakness.
Crypto is modestly lower. Bitcoin’s mark price is near 90,168, down about 0.3% from its quoted open, and Ether is around 3,185, off roughly 1.0%. Sentiment has been influenced by recalibrated sell-side targets; one major bank cut its year-end Bitcoin target to $100,000 from $200,000, citing updated assumptions despite ongoing institutional adoption trends. The policy backdrop—both monetary and regulatory—remains an important driver into 2026.
Notable company and thematic news
- Fed policy and market tone: The Fed’s final cut of 2025 set a constructive tone into year-end, with the Dow gaining nearly 500 points on Wednesday and the S&P 500 finishing just shy of a record. Takeaways emphasize a likely pause from here, a data-dependent stance, and balance-sheet considerations going forward.
- Labor: Initial jobless claims rose to a three-month high post-Thanksgiving, but reporting points to holiday season distortions and still-low layoff trends. Equity and bond price action this morning suggests markets view the data as consistent with a gradual cooling, not a sharp deterioration.
- AI spending and earnings: Adobe’s AI-driven beat and Oracle’s mixed results sharpened debate around the sustainability and financing of AI infrastructure. Ahead of Broadcom earnings, enthusiasm for custom chips remains high, but investors are scrutinizing capital structures and return horizons.
- Fixed-income signaling: Commentators continue to flag the “mystery” of long-end yield behavior as a potential risk signal; today’s bid for duration tempers those worries, but the topic bears watching.
- Commodities and geopolitics: The U.S. seizure of an oil tanker off Venezuela highlights ongoing geopolitical frictions. Despite that headline, crude proxies are lower, underscoring that macro supply/demand and positioning are currently paramount.
- Health care innovation: Positive obesity-therapy developments and resilient managed-care/retail commentary support the bid in XLV.
- Corporate updates and momentum: GE Vernova’s outlook-supported highs and Carvana’s winning run illustrate continued stock- and theme-specific opportunities beneath the index surface.
Outlook: what to watch next
- Policy and the curve: With 2s near 3.61% and 10s around 4.18% as of the latest snapshots, further steepening would likely aid financials while tempering high-duration growth multiples. A re-flattening—especially via a long-end rally—would ease those pressures.
- Earnings and AI capex: Broadcom’s results and outlook will be a key read-through for custom silicon, networking, and AI infrastructure returns. Follow-through reactions in XLK will hinge on guidance and capex discipline across the value chain.
- Labor and growth: Upcoming claims and jobs reports will test the “low hire, low fire” equilibrium. Markets currently favor a glide path to trend growth rather than a sharp slowdown.
- Options and market mechanics: Positioning into December expiration could amplify moves in either direction; dealers’ hedging needs may become a near-term volatility catalyst if indices retrace.
- Energy and metals: Watch whether silver’s strength persists at technically significant levels and whether crude finds support as macro narratives outweigh geopolitics.
- Crypto catalysts: After target resets, price action will depend on liquidity, flows, and any incremental regulatory developments.
Risks
- AI investment sustainability: If debt funding for AI infrastructure tightens or returns undershoot, tech multiples could compress and spreads could widen.
- Bond market instability: Renewed, unexplained long-end yield spikes would pressure duration-sensitive assets and risk appetite.
- Policy and legal uncertainty: Trade and tariff litigation outcomes, as well as shifting policy priorities around student loans and regulation, could alter household cash flows and corporate plans.
- Geopolitical shocks: Energy market disruptions could reintroduce inflation volatility.
- Positioning and liquidity: Into year-end and option expiry, thin liquidity can magnify moves.
Bottom line
At the open, the market is consolidating a strong Fed-day rally with a rotation that favors financials and health care over megacap tech. A steeper curve, anchored inflation expectations, and a bid for duration provide a constructive macro base, but investors remain focused on the sustainability of AI-driven capex, long-end yield behavior, and near-term positioning dynamics. Barring a surprise in data or policy, the path of least resistance into year-end remains one of sector rotation and stock selection rather than broad multiple expansion.