State of Market: Midday 01/21/26
Stocks Rebound Midday as Tariff Rhetoric Calms; Bonds, Gold and Energy Complex Firm While Crypto Slips
U.S. equities edge higher with health care leading and energy lagging; Treasury ETFs stabilize after prior selloff, gold advances, natural gas surges, and the euro softens modestly versus the dollar.
TendieTensor.com State of Market Midday
•
Midway through Wednesday’s session, U.S. risk assets are staging a measured rebound as investors digest moderating political headlines and a mixed but generally supportive macro backdrop. The tone improved after remarks out of Davos indicated a negotiation-first approach to the Greenland dispute, helping markets stabilize following the past session’s broad risk-off move. Against that calmer setting, major equity benchmarks are modestly higher, long-duration Treasuries are firmer, and safe-haven gold is advancing alongside a renewed bid in energy—particularly natural gas—while silver consolidates and major cryptocurrencies trade softer.
Equities opened on steadier footing and have built incremental gains into midday. The SPDR S&P 500 ETF Trust (SPY) is trading near 680.59 versus a prior close of 677.58, a modest uptick that reflects a tentative reembrace of risk following Tuesday’s sharp swing. The Invesco QQQ Trust (QQQ), a proxy for the Nasdaq-100, is likewise firmer at 610.50 compared with 608.06 previously. The Dow Jones Industrial Average tracker (DIA) is up to about 487.84 from 484.88, while small caps, as proxied by the iShares Russell 2000 ETF (IWM), are outperforming at 264.23 versus 262.58. This broad-based firming hints at an attempt to recalibrate after the largest selloff in roughly three months, but with gains still restrained as headline risk and earnings season catalysts loom.
At the sector level, leadership is skewing defensively-offensive: health care is setting the pace as investors gravitate toward steady cash flow profiles and idiosyncratic catalysts. The Health Care Select Sector SPDR Fund (XLV) has advanced to 157.55 from 155.40. Financials are constructive, with the Financial Select Sector SPDR Fund (XLF) at 53.45 versus 53.20, aided by a more settled rate backdrop. Technology is also participating, with the Technology Select Sector SPDR Fund (XLK) at 142.50 versus 141.84, although the tone remains discerning given mixed signals around AI monetization and ad markets from recent headlines. Energy is the notable laggard: despite a bid in crude and a sharp pop in natural gas, the Energy Select Sector SPDR (XLE) is slightly lower at 42.89 versus 42.96, highlighting that commodity strength is not translating evenly into equity performance at midday.
Macro backdrop
The latest available Treasury yield snapshot (as of January 16) shows a curve that remains upward sloping from the belly to the long end: 2-year at 3.59%, 5-year at 3.82%, 10-year at 4.24%, and 30-year at 4.83%. That configuration suggests term premia are still embedded at the long end while policy-rate expectations remain anchored around a disinflationary glide path at the front. On the inflation side, December’s headline CPI level stands at 326.03 with core CPI at 331.86 (index levels), and market- and model-based inflation expectations appear contained: 1-year at roughly 2.60%, 5-year at 2.33%, and 10-year at 2.32%. Taken together, these metrics point to an environment where inflation is not reaccelerating in a manner that would force a significantly tighter policy stance, even as geopolitical concerns and tariff-related uncertainty continue to inject volatility into rates and risk assets.
Rates, which were under meaningful pressure in the prior session amid tariff-related worries, are finding their footing. Long-duration Treasury ETFs are modestly higher midday, consistent with some easing in yields. The iShares 20+ Year Treasury Bond ETF (TLT) is up to about 87.03 from 86.65. Intermediate tenors are also firmer, with the iShares 7–10 Year Treasury Bond ETF (IEF) at 95.72 versus 95.55. Front-end stability remains the anchor, as reflected by the iShares 1–3 Year Treasury Bond ETF (SHY) near 82.81 versus 82.80. The rates stabilization follows a session described as the worst day in six months for parts of the Treasury market, when talk of tariffs tied to the Greenland dispute spurred a selloff; today’s tone is comparatively calm following indications that negotiations are the preferred path forward.
Commodities and FX
The cross-asset safety bid is most visible in gold, with the SPDR Gold Shares (GLD) rising to 444.37 from 437.23. This aligns with persistent investor demand for hedges amid geopolitical and policy uncertainty and extends momentum noted in recent coverage of record-setting action in precious metals. Silver, by contrast, is consolidating after outsized gains: the iShares Silver Trust (SLV) is modestly lower at 84.33 versus 85.39. The divergence between gold and silver today is not unusual following outsized moves; gold’s role as a portfolio macro hedge can remain in demand even as silver, with its higher beta and industrial linkages, digests prior strength.
Energy markets are firmer in aggregate, with front-month crude proxies and particularly U.S. natural gas capturing attention. The United States Oil Fund (USO) is up to 73.30 from 71.86, while broad commodities (DBC) are also higher at 23.74 versus 23.48. The United States Natural Gas Fund (UNG) is the standout, jumping to 13.51 from 12.37 amid reports of an impending cold snap that has traders bracing for the toughest supply–demand test in years. This dynamic injects weather-driven volatility into the energy complex that can persist beyond a single trading session, even if energy equities are not uniformly tracking the commodity moves today.
In foreign exchange, the euro is marginally softer intraday against the dollar: EURUSD is marked near 1.1698 versus an open of 1.1718, trading near the session lows as some of the immediate “Sell America” impulse abates. While the broader dollar trend is not specified here, the modest euro dip is consistent with the day’s calmer risk tone and rates stabilization.
Crypto
Crypto-assets are softer at midday. Bitcoin (BTCUSD) is marked around 87,951 versus an open near 89,335, while Ether (ETHUSD) trades around 2,905 versus an open near 2,976. The pullback follows a spate of headlines in artificial intelligence and advertising that may be reorienting incremental speculative flows. In the context of rising gold prices and headline-sensitive macro, today’s crypto weakness looks more like position adjustment than a fundamental break of trend, but near-term momentum is clearly cooling.
Notable corporate and thematic headlines
- Calmer tariff rhetoric: Markets found some relief after remarks in Davos signaled a preference for negotiations regarding Greenland, which has helped equities stabilize midday. This follows recent anxiety around potential tariffs on European allies and the associated market volatility.
- Treasuries stabilize after prior shock: Yesterday’s selloff in long-dated Treasuries—characterized as the worst day in six months—has eased, with TLT and IEF recovering some ground as headline pressure abates.
- Precious metals: Coverage emphasized recent record-setting moves in gold and silver amid geopolitical tensions. Today, GLD extends higher, while SLV consolidates, reflecting a common pattern after sharp advances.
- Natural gas: Reports highlighted a 20% upswing in natural-gas futures tied to an impending cold wave, a move reflected in UNG’s sharp advance today. This introduces potential knock-on effects for winter energy demand and utility margins, though sector performance is mixed at midday.
- Semiconductors and AI: Intel’s stock was noted for a strong run-up into earnings, reflecting optimism around AI and manufacturing initiatives even as analysts flagged execution risks. The broader tech ETF (XLK) is modestly higher, while investors remain selective amid debate over sustainable AI monetization.
- Media and streaming: Netflix shares were described as under pressure as investors weigh an all-cash bid for Warner Bros. Discovery’s studio and streaming assets alongside 2026 guidance. Strategically, analysts see potential ad growth as a fundamental cushion, though M&A uncertainty is a current overhang.
- Consumer and tariffs: Amazon’s CEO warned that tariff-driven cost pressures are beginning to creep into prices as inventory buffers wane. This speaks to a prospective shift in consumer mix and margin management across retail and consumer internet businesses should tariff pressures persist.
- Staples and portfolio rotation: Reports indicated Berkshire may exit a large Kraft Heinz stake, underscoring idiosyncratic pressures within packaged foods and the willingness of large investors to rotate capital away from challenged legacy exposures.
- Airlines: United Airlines’ latest results highlighted better-than-expected profits and momentum tied to loyalty strategy and business travel, signaling areas of cyclical strength within transportation even as macro risks ebb and flow.
How it connects
The crosscurrents line up with a familiar macro mosaic: inflation expectations near 2.3%–2.6% leave room for policy stability; the long end of the curve embeds risk premia and growth uncertainty but is not spiraling; and geopolitical/tariff headlines act as the near-term governor on risk-taking. In that context, today’s modest equity recoveries (SPY, QQQ, DIA, IWM) are consistent with a market that is not ready to abandon the soft-landing narrative but is keenly aware of headline sensitivity. Sector-wise, health care’s leadership (XLV) fits an environment favoring durable earnings while tech (XLK) participates selectively and energy (XLE) diverges from commodity moves—a reminder that factor exposures, index compositions, and company-specific catalysts can overwhelm first-order macro linkages in the short run.
In fixed income, the stabilization across TLT and IEF after yesterday’s shock aligns with calmer rhetoric and a still-anchored inflation-expectations profile. Commodities present a bifurcated picture: gold as the macro hedge extends gains; silver consolidates; crude oil is firmer; and natural gas volatility is elevated on weather dynamics. FX and crypto reflect a reduction in extreme risk reactions rather than a decisive new trend, with the euro modestly lower intraday and major tokens giving back some recent strength.
Outlook and near-term watch list
- Tariff trajectory: Watch for additional clarity from Davos and any follow-on comments that could re-ignite or further calm tariff risk. The Supreme Court’s prior stance on tariffs has also been cited as a potential factor in the timing and feasibility of new measures; any legal developments bear monitoring.
- Treasury market tone: After a sharp move and partial rebound, rates remain sensitive to headline risk. The 10-year at 4.24% (latest) is a key reference; sustained calm would support higher-beta equities, while renewed volatility could favor defensives and gold.
- Earnings cadence: Semiconductors, cloud/AI infrastructure, media/streaming, and industrial bellwethers are all in focus this week. Positive delivery versus elevated expectations (e.g., names with AI tailwinds) could extend sector leadership, while guidance missteps would reinforce selectivity and dispersion.
- Consumer resilience vs. tariffs: Company commentary indicating rising pass-through of tariff costs will remain a key variable for discretionary demand and margin outlooks across retail and e-commerce.
- Energy and weather: The natural gas spike underscores weather sensitivity; continued cold and storage dynamics could keep volatility high, with potential spillovers into power markets and related equities.
Key risks
- Geopolitics and trade: A re-escalation of tariff threats or signs of “weaponization of capital” could spark renewed selling in Treasuries and the dollar complex, re-tighten financial conditions, and pressure equities.
- Earnings execution: Elevated expectations in AI-adjacent technology and semiconductors raise the bar for delivery. Disappointments could trigger rapid factor rotations.
- Policy and legal uncertainty: Tariff-related legal path dependencies and broader policy unpredictability could extend volatility in rates and cyclicals.
- Commodity shocks: Weather-driven energy price spikes or disorderly moves in precious metals could tighten financial conditions indirectly via volatility channels.
Midday bottom line: The market is stabilizing after a sharp risk-off episode, with broad indices modestly higher, health care leading, and energy equities mixed despite firmer commodities. Bonds are rebounding, gold is firm, and crypto is softer. Near-term direction remains tethered to tariff rhetoric, the tone of the Treasury market, and the next wave of corporate earnings updates.
Midway through Wednesday’s session, U.S. risk assets are staging a measured rebound as investors digest moderating political headlines and a mixed but generally supportive macro backdrop. The tone improved after remarks out of Davos indicated a negotiation-first approach to the Greenland dispute, helping markets stabilize following the past session’s broad risk-off move. Against that calmer setting, major equity benchmarks are modestly higher, long-duration Treasuries are firmer, and safe-haven gold is advancing alongside a renewed bid in energy—particularly natural gas—while silver consolidates and major cryptocurrencies trade softer.
Equities opened on steadier footing and have built incremental gains into midday. The SPDR S&P 500 ETF Trust (SPY) is trading near 680.59 versus a prior close of 677.58, a modest uptick that reflects a tentative reembrace of risk following Tuesday’s sharp swing. The Invesco QQQ Trust (QQQ), a proxy for the Nasdaq-100, is likewise firmer at 610.50 compared with 608.06 previously. The Dow Jones Industrial Average tracker (DIA) is up to about 487.84 from 484.88, while small caps, as proxied by the iShares Russell 2000 ETF (IWM), are outperforming at 264.23 versus 262.58. This broad-based firming hints at an attempt to recalibrate after the largest selloff in roughly three months, but with gains still restrained as headline risk and earnings season catalysts loom.
At the sector level, leadership is skewing defensively-offensive: health care is setting the pace as investors gravitate toward steady cash flow profiles and idiosyncratic catalysts. The Health Care Select Sector SPDR Fund (XLV) has advanced to 157.55 from 155.40. Financials are constructive, with the Financial Select Sector SPDR Fund (XLF) at 53.45 versus 53.20, aided by a more settled rate backdrop. Technology is also participating, with the Technology Select Sector SPDR Fund (XLK) at 142.50 versus 141.84, although the tone remains discerning given mixed signals around AI monetization and ad markets from recent headlines. Energy is the notable laggard: despite a bid in crude and a sharp pop in natural gas, the Energy Select Sector SPDR (XLE) is slightly lower at 42.89 versus 42.96, highlighting that commodity strength is not translating evenly into equity performance at midday.
Macro backdrop
The latest available Treasury yield snapshot (as of January 16) shows a curve that remains upward sloping from the belly to the long end: 2-year at 3.59%, 5-year at 3.82%, 10-year at 4.24%, and 30-year at 4.83%. That configuration suggests term premia are still embedded at the long end while policy-rate expectations remain anchored around a disinflationary glide path at the front. On the inflation side, December’s headline CPI level stands at 326.03 with core CPI at 331.86 (index levels), and market- and model-based inflation expectations appear contained: 1-year at roughly 2.60%, 5-year at 2.33%, and 10-year at 2.32%. Taken together, these metrics point to an environment where inflation is not reaccelerating in a manner that would force a significantly tighter policy stance, even as geopolitical concerns and tariff-related uncertainty continue to inject volatility into rates and risk assets.
Rates, which were under meaningful pressure in the prior session amid tariff-related worries, are finding their footing. Long-duration Treasury ETFs are modestly higher midday, consistent with some easing in yields. The iShares 20+ Year Treasury Bond ETF (TLT) is up to about 87.03 from 86.65. Intermediate tenors are also firmer, with the iShares 7–10 Year Treasury Bond ETF (IEF) at 95.72 versus 95.55. Front-end stability remains the anchor, as reflected by the iShares 1–3 Year Treasury Bond ETF (SHY) near 82.81 versus 82.80. The rates stabilization follows a session described as the worst day in six months for parts of the Treasury market, when talk of tariffs tied to the Greenland dispute spurred a selloff; today’s tone is comparatively calm following indications that negotiations are the preferred path forward.
Commodities and FX
The cross-asset safety bid is most visible in gold, with the SPDR Gold Shares (GLD) rising to 444.37 from 437.23. This aligns with persistent investor demand for hedges amid geopolitical and policy uncertainty and extends momentum noted in recent coverage of record-setting action in precious metals. Silver, by contrast, is consolidating after outsized gains: the iShares Silver Trust (SLV) is modestly lower at 84.33 versus 85.39. The divergence between gold and silver today is not unusual following outsized moves; gold’s role as a portfolio macro hedge can remain in demand even as silver, with its higher beta and industrial linkages, digests prior strength.
Energy markets are firmer in aggregate, with front-month crude proxies and particularly U.S. natural gas capturing attention. The United States Oil Fund (USO) is up to 73.30 from 71.86, while broad commodities (DBC) are also higher at 23.74 versus 23.48. The United States Natural Gas Fund (UNG) is the standout, jumping to 13.51 from 12.37 amid reports of an impending cold snap that has traders bracing for the toughest supply–demand test in years. This dynamic injects weather-driven volatility into the energy complex that can persist beyond a single trading session, even if energy equities are not uniformly tracking the commodity moves today.
In foreign exchange, the euro is marginally softer intraday against the dollar: EURUSD is marked near 1.1698 versus an open of 1.1718, trading near the session lows as some of the immediate “Sell America” impulse abates. While the broader dollar trend is not specified here, the modest euro dip is consistent with the day’s calmer risk tone and rates stabilization.
Crypto
Crypto-assets are softer at midday. Bitcoin (BTCUSD) is marked around 87,951 versus an open near 89,335, while Ether (ETHUSD) trades around 2,905 versus an open near 2,976. The pullback follows a spate of headlines in artificial intelligence and advertising that may be reorienting incremental speculative flows. In the context of rising gold prices and headline-sensitive macro, today’s crypto weakness looks more like position adjustment than a fundamental break of trend, but near-term momentum is clearly cooling.
Notable corporate and thematic headlines
- Calmer tariff rhetoric: Markets found some relief after remarks in Davos signaled a preference for negotiations regarding Greenland, which has helped equities stabilize midday. This follows recent anxiety around potential tariffs on European allies and the associated market volatility.
- Treasuries stabilize after prior shock: Yesterday’s selloff in long-dated Treasuries—characterized as the worst day in six months—has eased, with TLT and IEF recovering some ground as headline pressure abates.
- Precious metals: Coverage emphasized recent record-setting moves in gold and silver amid geopolitical tensions. Today, GLD extends higher, while SLV consolidates, reflecting a common pattern after sharp advances.
- Natural gas: Reports highlighted a 20% upswing in natural-gas futures tied to an impending cold wave, a move reflected in UNG’s sharp advance today. This introduces potential knock-on effects for winter energy demand and utility margins, though sector performance is mixed at midday.
- Semiconductors and AI: Intel’s stock was noted for a strong run-up into earnings, reflecting optimism around AI and manufacturing initiatives even as analysts flagged execution risks. The broader tech ETF (XLK) is modestly higher, while investors remain selective amid debate over sustainable AI monetization.
- Media and streaming: Netflix shares were described as under pressure as investors weigh an all-cash bid for Warner Bros. Discovery’s studio and streaming assets alongside 2026 guidance. Strategically, analysts see potential ad growth as a fundamental cushion, though M&A uncertainty is a current overhang.
- Consumer and tariffs: Amazon’s CEO warned that tariff-driven cost pressures are beginning to creep into prices as inventory buffers wane. This speaks to a prospective shift in consumer mix and margin management across retail and consumer internet businesses should tariff pressures persist.
- Staples and portfolio rotation: Reports indicated Berkshire may exit a large Kraft Heinz stake, underscoring idiosyncratic pressures within packaged foods and the willingness of large investors to rotate capital away from challenged legacy exposures.
- Airlines: United Airlines’ latest results highlighted better-than-expected profits and momentum tied to loyalty strategy and business travel, signaling areas of cyclical strength within transportation even as macro risks ebb and flow.
How it connects
The crosscurrents line up with a familiar macro mosaic: inflation expectations near 2.3%–2.6% leave room for policy stability; the long end of the curve embeds risk premia and growth uncertainty but is not spiraling; and geopolitical/tariff headlines act as the near-term governor on risk-taking. In that context, today’s modest equity recoveries (SPY, QQQ, DIA, IWM) are consistent with a market that is not ready to abandon the soft-landing narrative but is keenly aware of headline sensitivity. Sector-wise, health care’s leadership (XLV) fits an environment favoring durable earnings while tech (XLK) participates selectively and energy (XLE) diverges from commodity moves—a reminder that factor exposures, index compositions, and company-specific catalysts can overwhelm first-order macro linkages in the short run.
In fixed income, the stabilization across TLT and IEF after yesterday’s shock aligns with calmer rhetoric and a still-anchored inflation-expectations profile. Commodities present a bifurcated picture: gold as the macro hedge extends gains; silver consolidates; crude oil is firmer; and natural gas volatility is elevated on weather dynamics. FX and crypto reflect a reduction in extreme risk reactions rather than a decisive new trend, with the euro modestly lower intraday and major tokens giving back some recent strength.
Outlook and near-term watch list
- Tariff trajectory: Watch for additional clarity from Davos and any follow-on comments that could re-ignite or further calm tariff risk. The Supreme Court’s prior stance on tariffs has also been cited as a potential factor in the timing and feasibility of new measures; any legal developments bear monitoring.
- Treasury market tone: After a sharp move and partial rebound, rates remain sensitive to headline risk. The 10-year at 4.24% (latest) is a key reference; sustained calm would support higher-beta equities, while renewed volatility could favor defensives and gold.
- Earnings cadence: Semiconductors, cloud/AI infrastructure, media/streaming, and industrial bellwethers are all in focus this week. Positive delivery versus elevated expectations (e.g., names with AI tailwinds) could extend sector leadership, while guidance missteps would reinforce selectivity and dispersion.
- Consumer resilience vs. tariffs: Company commentary indicating rising pass-through of tariff costs will remain a key variable for discretionary demand and margin outlooks across retail and e-commerce.
- Energy and weather: The natural gas spike underscores weather sensitivity; continued cold and storage dynamics could keep volatility high, with potential spillovers into power markets and related equities.
Key risks
- Geopolitics and trade: A re-escalation of tariff threats or signs of “weaponization of capital” could spark renewed selling in Treasuries and the dollar complex, re-tighten financial conditions, and pressure equities.
- Earnings execution: Elevated expectations in AI-adjacent technology and semiconductors raise the bar for delivery. Disappointments could trigger rapid factor rotations.
- Policy and legal uncertainty: Tariff-related legal path dependencies and broader policy unpredictability could extend volatility in rates and cyclicals.
- Commodity shocks: Weather-driven energy price spikes or disorderly moves in precious metals could tighten financial conditions indirectly via volatility channels.
Midday bottom line: The market is stabilizing after a sharp risk-off episode, with broad indices modestly higher, health care leading, and energy equities mixed despite firmer commodities. Bonds are rebounding, gold is firm, and crypto is softer. Near-term direction remains tethered to tariff rhetoric, the tone of the Treasury market, and the next wave of corporate earnings updates.