State of Market: Close 12/12/25
Tech-led pullback into the close as investors rotate defensively; long bonds slip, gold firms, crypto retreats
SPY and QQQ fell on Friday with the AI trade wobbling again; financials and health care steadied the tape. Long-duration Treasurys and broad commodities eased, while gold rose and bitcoin slipped despite this week’s Fed cut.
TendieTensor.com State of Market Close
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Overview
U.S. equities finished lower Friday in a broad but tech-led decline, capping a volatile week that followed the Federal Reserve’s final 25 bp rate cut of 2025. The S&P 500 proxy SPY settled at 681.72, down 1.08% from Thursday’s 689.17 close. The Nasdaq-100 proxy QQQ fell 1.92% to 613.57, while the Dow proxy DIA slipped 0.51% to 485.36. Small caps underperformed, with the Russell 2000 proxy IWM down 1.51% to 253.91. The pattern aligned with Friday’s tone highlighted in coverage of the session’s selloff and questions about whether the post-Fed optimism had simply run ahead of itself (Stocks are selling off Friday. Is it fatigue, or something else?).
Under the surface, sector leadership rotated. Financials edged higher and health care firmed, while technology lagged. In fixed income, short duration was little changed but the long end came under pressure, leaving long-duration bond ETFs modestly lower. Commodities were mixed: gold rose, silver and energy proxies eased, and a broad commodities basket ticked lower. In digital assets, bitcoin and ether traded below their session opens, echoing commentary earlier in the week that crypto failed to find a durable bid after the Fed decision.
Macro backdrop: yields, inflation, expectations
Treasury yields available as of December 10 show a 2-year at 3.54%, 5-year at 3.72%, 10-year at 4.13%, and 30-year at 4.78. While intraday yield prints for today aren’t provided, the ETF tape suggests a small bear-steepening bias on the day (long duration off more than short). Earlier market commentary flagged that the bond market rallied on the Fed’s cut but that such strength could prove fragile into January, a caution that fits with today’s softness in long-duration proxies.
On inflation, the latest available readings (September) show headline CPI at 324.368 and core CPI at 330.542. Market-based inflation expectations from November place the 5-year breakeven around 2.35%, 10-year at 2.27%, and the 5y/5y forward at 2.18%. Together, these point to medium-term inflation expectations anchored near the Fed’s target band, even as some Fed officials dissented this week on concerns that “inflation remains too high” and that the central bank should have waited for additional data before cutting again. That internal debate keeps policy path uncertainty elevated into year-end and early 2026.
Equities and sectors
- SPY closed at 681.72, down 1.08% from 689.17. The broad-market step-down tracked a modest de-risking day and partial giveback of Wednesday’s post-Fed strength.
- QQQ finished at 613.57, down 1.92% from 625.58, underperforming as the AI complex remained in focus following mixed corporate developments. Reports earlier in the week noted Oracle’s results pressured AI shares and rekindled concerns about the sustainability and financing of big-ticket AI spending. Separate coverage around Broadcom showed strong AI momentum yet also highlighted investor confusion about disclosure surrounding a new AI customer, underscoring how sentiment within the theme remains sensitive to headlines.
- DIA ended at 485.36, down 0.51% from 487.87. That comparatively smaller decline is consistent with the day’s partial rotation toward value and financials.
- IWM closed at 253.91, down 1.51% from 257.80, lagging large caps as investors backed away from higher-beta exposures.
Sectors were mixed:
- XLF (Financials) edged up to 54.945 from 54.87 (+0.14%). Friday’s bid in financials dovetailed with separate reports noting Visa’s strength among Dow components, and more broadly reflects positioning where lower rate volatility and stabilizing growth expectations can support card networks and lenders.
- XLK (Technology) declined to 143.67 from 147.97 (-2.91%), the weakest of the major sector proxies listed today. The retreat tracked the AI/software complex’s wobble following Oracle’s mixed update and renewed scrutiny of capex paybacks. Even supportive Broadcom commentary elsewhere was not enough to lift the sector on the day.
- XLV (Health Care) ticked up to 154.035 from 153.58 (+0.30%). Health care’s defensive and cash-flow attributes often attract flows on risk-off days; today’s uptick fits that pattern. Separately, news about weight-loss drug progress at Eli Lilly this week has kept attention on the group’s innovation pipelines.
- Note: The payload lists an XLE entry whose internal “symbol” field shows XLU. Using the provided figures, this fund closed at 42.85 versus 43.04 (-0.44%). Regardless of the label mismatch, the fund declined modestly, consistent with a mixed day for defensives and commodities.
Beyond indexes and sectors, notable company headlines offered additional context:
- Oracle’s earnings pressured AI leaders, amplifying bubble concerns around the pace and financing of AI infrastructure. That aligns with XLK’s underperformance and QQQ’s larger decline.
- Broadcom remained a focal point. One report emphasized strong AI semiconductor momentum, while another highlighted investor unease around disclosure of a new AI customer. The mixed sentiment captures why tech traded heavy despite pockets of strength.
- Visa’s outperformance within the Dow contrasted with the broader pullback and aligned with financials’ resilience.
- Consumer and media updates were mixed. Travel-related shares had rallied Thursday post-Fed on hopes for steadier consumer demand, but the broader tape cooled Friday. Separately, Costco posted sales and revenue ahead of expectations, and Disney-related headlines ranged from a strong box office trajectory for Zootopia 2 to an investment in OpenAI that could broaden digital engagement with Disney IP. These developments reinforce that consumer spend is uneven—resilient for value and select experiences—yet still hostage to macro confidence and rates.
- Cannabis shares surged earlier on reports of potential federal reclassification, a reminder that policy catalysts can create idiosyncratic moves independent of the broader market tone.
Bonds
The bond ETFs reflected a modest risk-off with a long-end tilt to weakness:
- TLT (long Treasurys) fell to 87.35 from 88.19 (-0.95%).
- IEF (intermediate) slipped to 96.19 from 96.45 (-0.27%).
- SHY (short) was essentially flat at 82.88 versus 82.86 (+0.02%).
The pattern is consistent with a small rise in longer-dated yields relative to short rates, which fits commentary warning that the post-cut bond rally could face a different tone in January. With the 10-year last available at 4.13% (Dec 10 data) and 5-year at 3.72%, the curve remains modestly positive from 2s to 10s in the latest snapshot, but day-to-day positioning appears cautious into year-end.
Commodities
- Gold: GLD rose to 395.43 from 393.24 (+0.56%). The bid for gold on a day of equity weakness and long-duration bond softness suggests continued demand for portfolio hedges, even as medium-term inflation expectations remain contained in market-based measures.
- Silver: SLV fell to 56.09 from 57.62 (-2.66%), underperforming gold and reflecting the metal’s higher beta to growth and industrial sentiment.
- Energy: USO eased to 68.84 from 69.25 (-0.59%), and UNG declined to 12.74 from 13.08 (-2.60%). A broad commodity basket (DBC) slipped to 22.905 from 23.11 (-0.89%). Headlines around a U.S. seizure of an oil tanker off Venezuela earlier in the week heightened geopolitical attention, but today’s price action leaned modestly lower across energy proxies.
FX and crypto
- EURUSD: The mark was 1.17355 as of the close snapshot. Directional change versus prior sessions is not provided in the payload. As such, we do not infer day-over-day dollar direction.
- BTCUSD: Bitcoin’s mark was 90,223.57 versus an open of 92,422.12, down about 2.4% on the session, with a range between 89,465.66 and 92,771.64.
- ETHUSD: Ether marked 3,082.43 versus a 3,248.42 open, down roughly 5.1%, with a range between 3,044.02 and 3,267.41.
This week’s narrative that bitcoin “didn’t budge” on the Fed cut was borne out again today by crypto’s inability to sustain a post-policy bid, suggesting macro liquidity alone isn’t a sufficient near-term upside catalyst for digital assets.
Putting it together
Friday’s declines centered on technology and higher-beta areas, while financials and health care provided ballast. The move was consistent with a market digesting a strong stretch into new highs earlier in the week and reassessing AI spending trajectories after mixed signals. In rates, a small bearish tilt at the long end aligned with warnings that the bond rally could cool into January, especially amid Fed communication that remains mixed (two dissents against cutting, one explicitly citing still-elevated inflation).
At the same time, consumer signals remained nuanced. Warehouse retail strength, ongoing travel interest, and selective media/entertainment momentum point to durable pockets of spend, while housing-related headlines about weakening prices and equity givebacks underscore the pressure higher financing costs have exerted. Commodities were no refuge beyond gold, with silver and energy softer and the diversified basket lower, consistent with a modestly risk-off tone.
Outlook—what to watch next
- Follow-through on sector rotation: Does financials’ relative strength versus tech persist into next week, or do buyers return to AI and megacaps on dips?
- AI spending cadence: Post-Oracle and Broadcom headlines, investors will scrutinize disclosures around AI capex, financing structures, and near-term revenue conversion. Execution updates could drive dispersion within tech.
- Rates and curve behavior: With long-end Treasury proxies softer today and the last 10-year read around 4.13% (Dec 10), watch whether the curve bear-steepens or reverts. A tighter policy debate inside the Fed raises the bar for additional near-term easing.
- Consumer durability vs. budget fatigue: Warehouse retail beats and travel interest face holiday budget constraints, as several reports flagged mixed consumer health. Incoming data timing is not provided; monitor retailer commentary and payments trends instead.
- Crypto tone: After failing to rally on the Fed cut and sliding today, watch whether digital assets stabilize around recent ranges or extend lower.
Risks
- Policy and communication risk: Fed dissents and uneven data could jar rate expectations and repricing along the curve.
- AI-capex digestion: Any slowdown in cloud/AI build-outs or concerns about funding and returns could weigh on tech multiples and the broader QQQ complex.
- Consumer and housing strain: Signs of equity erosion in housing and stretched budgets could sap discretionary demand.
- Geopolitics and commodities: Energy markets remain sensitive to headline risk, including developments around Venezuela and broader supply dynamics.
- Liquidity and year-end flows: Thinner liquidity can amplify moves across equities, bonds, commodities, and crypto.
Bottom line
Friday’s close reflected consolidation after a strong week: broad indexes slipped, tech led lower, and defensives plus financials steadied the tape. Long-duration bonds eased and commodities were mixed, with gold the exception. Macro inputs show medium-term inflation expectations anchored, but an active policy debate and a potentially fickle bond bid argue for selectivity. Into year-end, leadership may remain rotational as investors balance AI execution risk against still-constructive growth signals in select consumer and health care pockets. Maintaining diversified exposure and a close eye on rates and AI-related disclosures appears prudent after today’s rotation-heavy session.
Overview
U.S. equities finished lower Friday in a broad but tech-led decline, capping a volatile week that followed the Federal Reserve’s final 25 bp rate cut of 2025. The S&P 500 proxy SPY settled at 681.72, down 1.08% from Thursday’s 689.17 close. The Nasdaq-100 proxy QQQ fell 1.92% to 613.57, while the Dow proxy DIA slipped 0.51% to 485.36. Small caps underperformed, with the Russell 2000 proxy IWM down 1.51% to 253.91. The pattern aligned with Friday’s tone highlighted in coverage of the session’s selloff and questions about whether the post-Fed optimism had simply run ahead of itself (Stocks are selling off Friday. Is it fatigue, or something else?).
Under the surface, sector leadership rotated. Financials edged higher and health care firmed, while technology lagged. In fixed income, short duration was little changed but the long end came under pressure, leaving long-duration bond ETFs modestly lower. Commodities were mixed: gold rose, silver and energy proxies eased, and a broad commodities basket ticked lower. In digital assets, bitcoin and ether traded below their session opens, echoing commentary earlier in the week that crypto failed to find a durable bid after the Fed decision.
Macro backdrop: yields, inflation, expectations
Treasury yields available as of December 10 show a 2-year at 3.54%, 5-year at 3.72%, 10-year at 4.13%, and 30-year at 4.78. While intraday yield prints for today aren’t provided, the ETF tape suggests a small bear-steepening bias on the day (long duration off more than short). Earlier market commentary flagged that the bond market rallied on the Fed’s cut but that such strength could prove fragile into January, a caution that fits with today’s softness in long-duration proxies.
On inflation, the latest available readings (September) show headline CPI at 324.368 and core CPI at 330.542. Market-based inflation expectations from November place the 5-year breakeven around 2.35%, 10-year at 2.27%, and the 5y/5y forward at 2.18%. Together, these point to medium-term inflation expectations anchored near the Fed’s target band, even as some Fed officials dissented this week on concerns that “inflation remains too high” and that the central bank should have waited for additional data before cutting again. That internal debate keeps policy path uncertainty elevated into year-end and early 2026.
Equities and sectors
- SPY closed at 681.72, down 1.08% from 689.17. The broad-market step-down tracked a modest de-risking day and partial giveback of Wednesday’s post-Fed strength.
- QQQ finished at 613.57, down 1.92% from 625.58, underperforming as the AI complex remained in focus following mixed corporate developments. Reports earlier in the week noted Oracle’s results pressured AI shares and rekindled concerns about the sustainability and financing of big-ticket AI spending. Separate coverage around Broadcom showed strong AI momentum yet also highlighted investor confusion about disclosure surrounding a new AI customer, underscoring how sentiment within the theme remains sensitive to headlines.
- DIA ended at 485.36, down 0.51% from 487.87. That comparatively smaller decline is consistent with the day’s partial rotation toward value and financials.
- IWM closed at 253.91, down 1.51% from 257.80, lagging large caps as investors backed away from higher-beta exposures.
Sectors were mixed:
- XLF (Financials) edged up to 54.945 from 54.87 (+0.14%). Friday’s bid in financials dovetailed with separate reports noting Visa’s strength among Dow components, and more broadly reflects positioning where lower rate volatility and stabilizing growth expectations can support card networks and lenders.
- XLK (Technology) declined to 143.67 from 147.97 (-2.91%), the weakest of the major sector proxies listed today. The retreat tracked the AI/software complex’s wobble following Oracle’s mixed update and renewed scrutiny of capex paybacks. Even supportive Broadcom commentary elsewhere was not enough to lift the sector on the day.
- XLV (Health Care) ticked up to 154.035 from 153.58 (+0.30%). Health care’s defensive and cash-flow attributes often attract flows on risk-off days; today’s uptick fits that pattern. Separately, news about weight-loss drug progress at Eli Lilly this week has kept attention on the group’s innovation pipelines.
- Note: The payload lists an XLE entry whose internal “symbol” field shows XLU. Using the provided figures, this fund closed at 42.85 versus 43.04 (-0.44%). Regardless of the label mismatch, the fund declined modestly, consistent with a mixed day for defensives and commodities.
Beyond indexes and sectors, notable company headlines offered additional context:
- Oracle’s earnings pressured AI leaders, amplifying bubble concerns around the pace and financing of AI infrastructure. That aligns with XLK’s underperformance and QQQ’s larger decline.
- Broadcom remained a focal point. One report emphasized strong AI semiconductor momentum, while another highlighted investor unease around disclosure of a new AI customer. The mixed sentiment captures why tech traded heavy despite pockets of strength.
- Visa’s outperformance within the Dow contrasted with the broader pullback and aligned with financials’ resilience.
- Consumer and media updates were mixed. Travel-related shares had rallied Thursday post-Fed on hopes for steadier consumer demand, but the broader tape cooled Friday. Separately, Costco posted sales and revenue ahead of expectations, and Disney-related headlines ranged from a strong box office trajectory for Zootopia 2 to an investment in OpenAI that could broaden digital engagement with Disney IP. These developments reinforce that consumer spend is uneven—resilient for value and select experiences—yet still hostage to macro confidence and rates.
- Cannabis shares surged earlier on reports of potential federal reclassification, a reminder that policy catalysts can create idiosyncratic moves independent of the broader market tone.
Bonds
The bond ETFs reflected a modest risk-off with a long-end tilt to weakness:
- TLT (long Treasurys) fell to 87.35 from 88.19 (-0.95%).
- IEF (intermediate) slipped to 96.19 from 96.45 (-0.27%).
- SHY (short) was essentially flat at 82.88 versus 82.86 (+0.02%).
The pattern is consistent with a small rise in longer-dated yields relative to short rates, which fits commentary warning that the post-cut bond rally could face a different tone in January. With the 10-year last available at 4.13% (Dec 10 data) and 5-year at 3.72%, the curve remains modestly positive from 2s to 10s in the latest snapshot, but day-to-day positioning appears cautious into year-end.
Commodities
- Gold: GLD rose to 395.43 from 393.24 (+0.56%). The bid for gold on a day of equity weakness and long-duration bond softness suggests continued demand for portfolio hedges, even as medium-term inflation expectations remain contained in market-based measures.
- Silver: SLV fell to 56.09 from 57.62 (-2.66%), underperforming gold and reflecting the metal’s higher beta to growth and industrial sentiment.
- Energy: USO eased to 68.84 from 69.25 (-0.59%), and UNG declined to 12.74 from 13.08 (-2.60%). A broad commodity basket (DBC) slipped to 22.905 from 23.11 (-0.89%). Headlines around a U.S. seizure of an oil tanker off Venezuela earlier in the week heightened geopolitical attention, but today’s price action leaned modestly lower across energy proxies.
FX and crypto
- EURUSD: The mark was 1.17355 as of the close snapshot. Directional change versus prior sessions is not provided in the payload. As such, we do not infer day-over-day dollar direction.
- BTCUSD: Bitcoin’s mark was 90,223.57 versus an open of 92,422.12, down about 2.4% on the session, with a range between 89,465.66 and 92,771.64.
- ETHUSD: Ether marked 3,082.43 versus a 3,248.42 open, down roughly 5.1%, with a range between 3,044.02 and 3,267.41.
This week’s narrative that bitcoin “didn’t budge” on the Fed cut was borne out again today by crypto’s inability to sustain a post-policy bid, suggesting macro liquidity alone isn’t a sufficient near-term upside catalyst for digital assets.
Putting it together
Friday’s declines centered on technology and higher-beta areas, while financials and health care provided ballast. The move was consistent with a market digesting a strong stretch into new highs earlier in the week and reassessing AI spending trajectories after mixed signals. In rates, a small bearish tilt at the long end aligned with warnings that the bond rally could cool into January, especially amid Fed communication that remains mixed (two dissents against cutting, one explicitly citing still-elevated inflation).
At the same time, consumer signals remained nuanced. Warehouse retail strength, ongoing travel interest, and selective media/entertainment momentum point to durable pockets of spend, while housing-related headlines about weakening prices and equity givebacks underscore the pressure higher financing costs have exerted. Commodities were no refuge beyond gold, with silver and energy softer and the diversified basket lower, consistent with a modestly risk-off tone.
Outlook—what to watch next
- Follow-through on sector rotation: Does financials’ relative strength versus tech persist into next week, or do buyers return to AI and megacaps on dips?
- AI spending cadence: Post-Oracle and Broadcom headlines, investors will scrutinize disclosures around AI capex, financing structures, and near-term revenue conversion. Execution updates could drive dispersion within tech.
- Rates and curve behavior: With long-end Treasury proxies softer today and the last 10-year read around 4.13% (Dec 10), watch whether the curve bear-steepens or reverts. A tighter policy debate inside the Fed raises the bar for additional near-term easing.
- Consumer durability vs. budget fatigue: Warehouse retail beats and travel interest face holiday budget constraints, as several reports flagged mixed consumer health. Incoming data timing is not provided; monitor retailer commentary and payments trends instead.
- Crypto tone: After failing to rally on the Fed cut and sliding today, watch whether digital assets stabilize around recent ranges or extend lower.
Risks
- Policy and communication risk: Fed dissents and uneven data could jar rate expectations and repricing along the curve.
- AI-capex digestion: Any slowdown in cloud/AI build-outs or concerns about funding and returns could weigh on tech multiples and the broader QQQ complex.
- Consumer and housing strain: Signs of equity erosion in housing and stretched budgets could sap discretionary demand.
- Geopolitics and commodities: Energy markets remain sensitive to headline risk, including developments around Venezuela and broader supply dynamics.
- Liquidity and year-end flows: Thinner liquidity can amplify moves across equities, bonds, commodities, and crypto.
Bottom line
Friday’s close reflected consolidation after a strong week: broad indexes slipped, tech led lower, and defensives plus financials steadied the tape. Long-duration bonds eased and commodities were mixed, with gold the exception. Macro inputs show medium-term inflation expectations anchored, but an active policy debate and a potentially fickle bond bid argue for selectivity. Into year-end, leadership may remain rotational as investors balance AI execution risk against still-constructive growth signals in select consumer and health care pockets. Maintaining diversified exposure and a close eye on rates and AI-related disclosures appears prudent after today’s rotation-heavy session.