State of Market: Midday 12/29/25
Stocks soften into the year-end stretch as precious metals slump; bonds firmer, energy bid
Utilities and energy lead defensives while technology and small caps lag. Gold and silver retreat sharply; oil and natural gas rise. Bonds edge up as long-end yields remain elevated versus the front-end.
TendieTensor.com State of Market Midday
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U.S. equities are modestly lower at midday on Monday, with major index ETFs easing after a strong year-to-date run and a seasonally favorable “Santa Claus rally” window. The S&P 500 proxy (SPY) is trading at 687.33 versus a previous close of 690.31, modestly lower by roughly 0.4%. The Nasdaq-100 proxy (QQQ) is near 620.01 against 623.89 previously, off approximately 0.6%, while the Dow proxy (DIA) is around 484.72 versus 487.03, down about 0.5%. Small caps (IWM) are underperforming, at 249.83 versus 251.42 previously, lower by roughly 0.6%. The tone reflects mild risk-off and sector rotation typical of thin year-end liquidity, with defensives showing relative strength.
Macro backdrop and rates
Treasury yields remain the key macro anchor as 2025 winds down. The most recent available curve snapshot shows the 2-year at 3.44%, the 5-year at 3.71%, the 10-year at 4.17%, and the 30-year at 4.84% (as of 12/22). The curve remains upward sloping from the front end to the long end, with term premiums at the back end still elevated versus the front end. Against that backdrop, long-duration Treasurys are modestly bid today: TLT is at 87.96 compared with 87.74 previously (about +0.3%), and IEF is at 96.58 versus 96.44 (about +0.1%). The short-duration SHY is fractionally higher at 82.84 versus 82.79. Slight bid in duration alongside an upward-sloping curve often aligns with a cautious-but-stable risk tone, and today’s modest equity pullback fits that pattern.
On inflation, the latest prints (November) show the CPI index level at 325.031 and core CPI at 331.068. While year-over-year rates aren’t included in the data provided, inflation expectations continue to frame the market’s medium-term view: model-based expectations sit at 3.20% for 1-year, 2.42% for 5-year, and 2.34% for 10-year horizons, with 30-year at 2.44% (December). Longer-run expectations in the mid-2s remain broadly consistent with a “disinflation with volatility” path that markets have rewarded in 2025. That said, an article noting a very low “fear gauge” (VIX) heading into 2026 underscores that investors may be pricing a benign path and could be vulnerable to negative surprises.
Equities and sectors
Within sectors, leadership today tilts defensive. Utilities are higher based on the provided sector print. Note: the sector feed shows an XLE entry that maps to XLU (utilities) at the symbol level; using the symbol provided, the utilities ETF is at 43.09 versus 42.78 previously, up roughly 0.7%. Financials (XLF) trade at 55.35 versus 55.62 previously, down about 0.5%. Technology (XLK) is at 145.59 versus 146.53 previously, lower by roughly 0.6%, in line with the Nasdaq’s modest underperformance. Health care (XLV) is nearly unchanged at 155.97 versus 156.05 previously, slightly negative.
At the index level, the downshift is measured, consistent with a consolidation of recent gains and some rebalancing before year-end. The mild de-risking from growth-oriented exposures (QQQ, XLK) and small caps (IWM) toward defensives (utilities) can be consistent with investors locking in winners and insulating portfolios into the final trading days of the year. News flow around AI remains active—both in corporate developments and forward-looking analysis—but that did not translate into intraday outperformance for tech as a group today.
Bonds
Treasuries are modestly firmer at midday, with price gains across the curve: TLT +0.3%, IEF +0.1%, SHY +0.1% versus the previous closes. With the last reported 10-year yield at 4.17% and 30-year at 4.84% (12/22), today’s slight bid in bond ETFs suggests a still-cautious appetite for duration, helping offset some equity multiple pressure. In year-end conditions, even small flows can nudge prices; the key takeaway is that bonds are providing ballast as equities consolidate.
Commodities
The standout move is in precious metals, where gold and silver are sharply lower. GLD is at 397.96 versus 416.74 previously, down roughly 4.5%, while SLV is at 64.31 versus 71.12, lower by about 9.6%. The pullback lines up with multiple articles flagging near-term risks into the New Year, including the potential for year-end, tax-related selling to weigh on appreciated assets, and a strategist’s warning that the pre-holiday surge in precious metals looked “unhinged.” Another piece noted that a veteran investor remains bullish long term on silver, but the near-term risk/reward can be challenging—an assessment today’s tape appears to validate.
Energy is firmer. USO is at 69.71 versus 68.48 previously, up roughly 1.8%. Natural gas (UNG) is at 13.11 versus 12.81, higher by approximately 2.3%. A Bloomberg report that Ukraine said drones hit Russia’s largest gas processing plant adds a geopolitical layer that can support the energy complex, particularly natural gas, given the infrastructure implications. Broad commodities (DBC) are fractionally lower at 22.48 versus 22.70, off about 1.0%, reflecting precious metals’ weight despite firmer energy.
FX and crypto
In foreign exchange, EURUSD is quoted near 1.1756, slightly below its open (1.1767) and near session lows (1.1754). A modestly firmer dollar intraday can reinforce headwinds for precious metals, and today’s gold/silver declines are consistent with a stronger USD tone.
Crypto is softer. Bitcoin (BTCUSD) is marked near 87,628 versus an open around 90,050, down about 2.7% on the session, with a range between roughly 86,666 and 90,277. Ether (ETHUSD) is about 2,933 versus a 3,037 open, lower by ~3.4%, within a 2,906 to 3,044 range. A recent article noted that, despite substantial industry milestones in 2025, crypto prices struggled, and market participants are looking for clearer policy support into 2026. Today’s risk-off tilt across growth assets and a firmer dollar likely contribute to the pressure.
Company and thematic news
- Biotech volatility: MarketWatch reports record selloffs for Ultragenyx and Mereo BioPharma after disappointing trial results for setrusumab, underscoring binary risk in clinical-stage therapeutics and the importance of diversification within biotech.
- AI leadership and spending: Multiple articles assess the AI landscape heading into 2026. There is ongoing discussion of Nvidia’s position and catalysts for the coming year, where data center build-out and large-model launches will be telling. A MarketWatch report highlights a non-exclusive licensing agreement between Nvidia and Groq, with some Groq executives joining Nvidia—a detail that supports narratives of continued consolidation of talent and know-how around leading AI hardware vendors. Separate pieces examine AMD’s scope to gain share in AI accelerators and rack-scale systems next year, the competitive dynamics for Microsoft and Alphabet, and whether Meta could pivot from a year of elevated AI investment back toward efficiency and monetization. While tech leadership has been a backbone of 2025 performance, today’s sector softness shows that year-end positioning can override thematic enthusiasm on a single session.
- Utilities and power: A strategist commentary suggests the “AI gravy train” for power stocks may give way to a focus on execution—namely, which utilities are positioned to capture actual cash flows from rising data center power demand. Utilities’ relative strength today (based on the XLU symbol data) fits with a defensives bid and the market’s desire for visible cash returns and regulated earnings.
- Energy and geopolitics: The reported Ukrainian drone strikes on a major Russian gas processing facility resonate with today’s firmer oil and natural gas pricing. Such events augment the geopolitical risk premium and can keep energy supported, even as broader commodities slip on precious metals.
- Autos and consumer: CNBC notes GM’s best stock performance year since its post-bankruptcy reemergence, reflecting cyclical and execution improvements in 2025. Separately, Tesla faces renewed regulatory scrutiny tied to Model 3 doors, which adds to the ongoing headline risk around autonomy and safety as the company doubles down on robotaxi ambitions. These narratives emphasize how 2026 may be more about delivery against high expectations than thematic headlines alone.
- Retail and activism: MarketWatch highlights a report of a significant investment in Target by Toms Capital, lifting sentiment in a challenged retailer amid a value-focused consumer backdrop. Year-end trading often sees idiosyncratic moves on activist and strategic news.
- Sentiment and seasonality: The “Santa Claus rally” period (from the last five trading days of the year through the first two days of the new year) has historically been supportive, and one article noted a solid start this year. Another piece observed that the VIX sits near cycle lows, suggesting confidence but also the risk of complacency. Today’s modest consolidation fits a narrative of digestion rather than deterioration.
Putting it together
Today’s cross-asset setup—equities a touch lower, bonds slightly higher, a firmer dollar, precious metals sharply down, and energy bid—maps well to a defensives-and-quality tilt into year-end. The curve structure (2s at ~3.44% vs 10s at ~4.17% and 30s at ~4.84%) implies that duration still carries a premium, but the small bid for Treasurys today suggests investors are comfortable holding some protection while allowing equity risk to cool after strong gains. Sector-wise, utilities and energy leadership over technology and small caps is classic late-December positioning, amplified by thin liquidity.
Outlook—what to watch next
- Macro updates: CNBC flags a handful of macroeconomic updates on deck this week. With inflation expectations anchored in the mid-2s beyond the 1-year horizon, any data that challenge that anchoring could matter for early-2026 positioning.
- Precious metals follow-through: After today’s steep declines in GLD and SLV, watch for stabilization or extended profit-taking as tax-related flows and thin liquidity play out into the New Year. Articles warned of near-term risks; price action is validating that caution.
- AI spending cadence: Multiple pieces highlight 2026 as a year where investors will scrutinize AI monetization and capital efficiency. The Nvidia–Groq licensing news, AMD’s upcoming portfolio, and debates around Meta’s spending posture are all part of that broader assessment.
- Energy and geopolitics: The reported strike on Russian gas infrastructure raises the possibility of further supply-side headlines. UNG and USO strength today merit monitoring should geopolitical risks escalate.
- Seasonality and sentiment: The Santa period remains in effect. With a low “fear gauge” heading into 2026, any unexpected macro or regulatory headline could test complacency.
Risks
- Liquidity and year-end flows: Thin conditions can exacerbate moves, especially in metals and smaller-cap equities.
- Policy and regulation: From energy projects (offshore wind pauses) to auto safety reviews, sector-specific policy risks could drive dispersion.
- AI execution risk: As noted by strategists, 2026 focus shifts to who captures AI economics; disappointments could pressure richly valued leaders and the broader tech complex.
- Geopolitical shocks: Energy infrastructure risks can ripple into broader commodities and inflation expectations.
- Sentiment extremes: With volatility gauges low, negative surprises may have outsize impact in early 2026.
Overall, today’s session looks like orderly consolidation with a classic defensive tilt: utilities and energy firm, tech and small caps softer, bonds providing some ballast, and precious metals resetting lower after a strong pre-holiday run. Into the final trading days of 2025, positioning and liquidity dynamics are likely to dominate, with early-2026 macro updates and AI execution narratives quickly reclaiming center stage after the calendar turns.
U.S. equities are modestly lower at midday on Monday, with major index ETFs easing after a strong year-to-date run and a seasonally favorable “Santa Claus rally” window. The S&P 500 proxy (SPY) is trading at 687.33 versus a previous close of 690.31, modestly lower by roughly 0.4%. The Nasdaq-100 proxy (QQQ) is near 620.01 against 623.89 previously, off approximately 0.6%, while the Dow proxy (DIA) is around 484.72 versus 487.03, down about 0.5%. Small caps (IWM) are underperforming, at 249.83 versus 251.42 previously, lower by roughly 0.6%. The tone reflects mild risk-off and sector rotation typical of thin year-end liquidity, with defensives showing relative strength.
Macro backdrop and rates
Treasury yields remain the key macro anchor as 2025 winds down. The most recent available curve snapshot shows the 2-year at 3.44%, the 5-year at 3.71%, the 10-year at 4.17%, and the 30-year at 4.84% (as of 12/22). The curve remains upward sloping from the front end to the long end, with term premiums at the back end still elevated versus the front end. Against that backdrop, long-duration Treasurys are modestly bid today: TLT is at 87.96 compared with 87.74 previously (about +0.3%), and IEF is at 96.58 versus 96.44 (about +0.1%). The short-duration SHY is fractionally higher at 82.84 versus 82.79. Slight bid in duration alongside an upward-sloping curve often aligns with a cautious-but-stable risk tone, and today’s modest equity pullback fits that pattern.
On inflation, the latest prints (November) show the CPI index level at 325.031 and core CPI at 331.068. While year-over-year rates aren’t included in the data provided, inflation expectations continue to frame the market’s medium-term view: model-based expectations sit at 3.20% for 1-year, 2.42% for 5-year, and 2.34% for 10-year horizons, with 30-year at 2.44% (December). Longer-run expectations in the mid-2s remain broadly consistent with a “disinflation with volatility” path that markets have rewarded in 2025. That said, an article noting a very low “fear gauge” (VIX) heading into 2026 underscores that investors may be pricing a benign path and could be vulnerable to negative surprises.
Equities and sectors
Within sectors, leadership today tilts defensive. Utilities are higher based on the provided sector print. Note: the sector feed shows an XLE entry that maps to XLU (utilities) at the symbol level; using the symbol provided, the utilities ETF is at 43.09 versus 42.78 previously, up roughly 0.7%. Financials (XLF) trade at 55.35 versus 55.62 previously, down about 0.5%. Technology (XLK) is at 145.59 versus 146.53 previously, lower by roughly 0.6%, in line with the Nasdaq’s modest underperformance. Health care (XLV) is nearly unchanged at 155.97 versus 156.05 previously, slightly negative.
At the index level, the downshift is measured, consistent with a consolidation of recent gains and some rebalancing before year-end. The mild de-risking from growth-oriented exposures (QQQ, XLK) and small caps (IWM) toward defensives (utilities) can be consistent with investors locking in winners and insulating portfolios into the final trading days of the year. News flow around AI remains active—both in corporate developments and forward-looking analysis—but that did not translate into intraday outperformance for tech as a group today.
Bonds
Treasuries are modestly firmer at midday, with price gains across the curve: TLT +0.3%, IEF +0.1%, SHY +0.1% versus the previous closes. With the last reported 10-year yield at 4.17% and 30-year at 4.84% (12/22), today’s slight bid in bond ETFs suggests a still-cautious appetite for duration, helping offset some equity multiple pressure. In year-end conditions, even small flows can nudge prices; the key takeaway is that bonds are providing ballast as equities consolidate.
Commodities
The standout move is in precious metals, where gold and silver are sharply lower. GLD is at 397.96 versus 416.74 previously, down roughly 4.5%, while SLV is at 64.31 versus 71.12, lower by about 9.6%. The pullback lines up with multiple articles flagging near-term risks into the New Year, including the potential for year-end, tax-related selling to weigh on appreciated assets, and a strategist’s warning that the pre-holiday surge in precious metals looked “unhinged.” Another piece noted that a veteran investor remains bullish long term on silver, but the near-term risk/reward can be challenging—an assessment today’s tape appears to validate.
Energy is firmer. USO is at 69.71 versus 68.48 previously, up roughly 1.8%. Natural gas (UNG) is at 13.11 versus 12.81, higher by approximately 2.3%. A Bloomberg report that Ukraine said drones hit Russia’s largest gas processing plant adds a geopolitical layer that can support the energy complex, particularly natural gas, given the infrastructure implications. Broad commodities (DBC) are fractionally lower at 22.48 versus 22.70, off about 1.0%, reflecting precious metals’ weight despite firmer energy.
FX and crypto
In foreign exchange, EURUSD is quoted near 1.1756, slightly below its open (1.1767) and near session lows (1.1754). A modestly firmer dollar intraday can reinforce headwinds for precious metals, and today’s gold/silver declines are consistent with a stronger USD tone.
Crypto is softer. Bitcoin (BTCUSD) is marked near 87,628 versus an open around 90,050, down about 2.7% on the session, with a range between roughly 86,666 and 90,277. Ether (ETHUSD) is about 2,933 versus a 3,037 open, lower by ~3.4%, within a 2,906 to 3,044 range. A recent article noted that, despite substantial industry milestones in 2025, crypto prices struggled, and market participants are looking for clearer policy support into 2026. Today’s risk-off tilt across growth assets and a firmer dollar likely contribute to the pressure.
Company and thematic news
- Biotech volatility: MarketWatch reports record selloffs for Ultragenyx and Mereo BioPharma after disappointing trial results for setrusumab, underscoring binary risk in clinical-stage therapeutics and the importance of diversification within biotech.
- AI leadership and spending: Multiple articles assess the AI landscape heading into 2026. There is ongoing discussion of Nvidia’s position and catalysts for the coming year, where data center build-out and large-model launches will be telling. A MarketWatch report highlights a non-exclusive licensing agreement between Nvidia and Groq, with some Groq executives joining Nvidia—a detail that supports narratives of continued consolidation of talent and know-how around leading AI hardware vendors. Separate pieces examine AMD’s scope to gain share in AI accelerators and rack-scale systems next year, the competitive dynamics for Microsoft and Alphabet, and whether Meta could pivot from a year of elevated AI investment back toward efficiency and monetization. While tech leadership has been a backbone of 2025 performance, today’s sector softness shows that year-end positioning can override thematic enthusiasm on a single session.
- Utilities and power: A strategist commentary suggests the “AI gravy train” for power stocks may give way to a focus on execution—namely, which utilities are positioned to capture actual cash flows from rising data center power demand. Utilities’ relative strength today (based on the XLU symbol data) fits with a defensives bid and the market’s desire for visible cash returns and regulated earnings.
- Energy and geopolitics: The reported Ukrainian drone strikes on a major Russian gas processing facility resonate with today’s firmer oil and natural gas pricing. Such events augment the geopolitical risk premium and can keep energy supported, even as broader commodities slip on precious metals.
- Autos and consumer: CNBC notes GM’s best stock performance year since its post-bankruptcy reemergence, reflecting cyclical and execution improvements in 2025. Separately, Tesla faces renewed regulatory scrutiny tied to Model 3 doors, which adds to the ongoing headline risk around autonomy and safety as the company doubles down on robotaxi ambitions. These narratives emphasize how 2026 may be more about delivery against high expectations than thematic headlines alone.
- Retail and activism: MarketWatch highlights a report of a significant investment in Target by Toms Capital, lifting sentiment in a challenged retailer amid a value-focused consumer backdrop. Year-end trading often sees idiosyncratic moves on activist and strategic news.
- Sentiment and seasonality: The “Santa Claus rally” period (from the last five trading days of the year through the first two days of the new year) has historically been supportive, and one article noted a solid start this year. Another piece observed that the VIX sits near cycle lows, suggesting confidence but also the risk of complacency. Today’s modest consolidation fits a narrative of digestion rather than deterioration.
Putting it together
Today’s cross-asset setup—equities a touch lower, bonds slightly higher, a firmer dollar, precious metals sharply down, and energy bid—maps well to a defensives-and-quality tilt into year-end. The curve structure (2s at ~3.44% vs 10s at ~4.17% and 30s at ~4.84%) implies that duration still carries a premium, but the small bid for Treasurys today suggests investors are comfortable holding some protection while allowing equity risk to cool after strong gains. Sector-wise, utilities and energy leadership over technology and small caps is classic late-December positioning, amplified by thin liquidity.
Outlook—what to watch next
- Macro updates: CNBC flags a handful of macroeconomic updates on deck this week. With inflation expectations anchored in the mid-2s beyond the 1-year horizon, any data that challenge that anchoring could matter for early-2026 positioning.
- Precious metals follow-through: After today’s steep declines in GLD and SLV, watch for stabilization or extended profit-taking as tax-related flows and thin liquidity play out into the New Year. Articles warned of near-term risks; price action is validating that caution.
- AI spending cadence: Multiple pieces highlight 2026 as a year where investors will scrutinize AI monetization and capital efficiency. The Nvidia–Groq licensing news, AMD’s upcoming portfolio, and debates around Meta’s spending posture are all part of that broader assessment.
- Energy and geopolitics: The reported strike on Russian gas infrastructure raises the possibility of further supply-side headlines. UNG and USO strength today merit monitoring should geopolitical risks escalate.
- Seasonality and sentiment: The Santa period remains in effect. With a low “fear gauge” heading into 2026, any unexpected macro or regulatory headline could test complacency.
Risks
- Liquidity and year-end flows: Thin conditions can exacerbate moves, especially in metals and smaller-cap equities.
- Policy and regulation: From energy projects (offshore wind pauses) to auto safety reviews, sector-specific policy risks could drive dispersion.
- AI execution risk: As noted by strategists, 2026 focus shifts to who captures AI economics; disappointments could pressure richly valued leaders and the broader tech complex.
- Geopolitical shocks: Energy infrastructure risks can ripple into broader commodities and inflation expectations.
- Sentiment extremes: With volatility gauges low, negative surprises may have outsize impact in early 2026.
Overall, today’s session looks like orderly consolidation with a classic defensive tilt: utilities and energy firm, tech and small caps softer, bonds providing some ballast, and precious metals resetting lower after a strong pre-holiday run. Into the final trading days of 2025, positioning and liquidity dynamics are likely to dominate, with early-2026 macro updates and AI execution narratives quickly reclaiming center stage after the calendar turns.