Overview
The tape is holding its rebound at midday. Broad indices are grinding higher with large-cap tech and major banks back in charge, while defensives trail. It is a familiar rhythm when macro fear fades just enough for risk to work, but not enough to draw money into bond-like equities.
By the numbers, SPY is trading above its prior close, joined by QQQ, DIA and small-cap proxy IWM. Precious metals remain firm with gold and silver pressing higher, a tell that hedges are not being unwound aggressively. Oil is softer and natural gas is bid. Crypto is the outlier, with bitcoin under 90,000 and heavy. That cross-current, risk-on equities alongside sticky havens and a reluctant crypto complex, speaks to a market that is leaning in but not sprinting.
Geopolitical temperature dropped a notch after conciliatory remarks around Greenland, and the fear spike that rattled options earlier in the week has been erased. The macro center of gravity, however, still sits with rates and inflation. The Fed’s preferred gauge ran at 2.8% in November, and Treasury yields have crept higher from last week’s levels. That mix, easing headline risk but no obvious green light from inflation, is keeping rotations tight and tactical.
Macro backdrop
Inflation and rates are the frame for today’s action. Recent readings show the Fed’s main gauge running at 2.8% in November, with commentary noting it is edging away from target. Market pieces emphasize the same point in plainer terms: inflation remains “stuck” near 3%, which keeps the central bank in no rush to add accommodation. That matters for equity duration, sector leadership and risk budgets.
On the curve, the latest available levels have the 10‑year Treasury near 4.3%, up from last week’s prints, and the 30‑year closer to 4.91%. The 2‑year sits in the 3.6% area, while the 5‑year runs near 3.86%. The direction from mid‑January has been a slow drift higher in long rates, with the front end steady. It is not a tantrum, but it is enough to cap multiples that got ahead of themselves and to keep pressure on defensives that behave like bonds.
Inflation expectations, at least via model-based estimates, remain contained. One‑year expectations moderated into the mid‑2s in January, and 5‑ to 10‑year measures are clustered in the low‑2s. That disconnect stands out: realized inflation has plateaued in the high‑2s, while forward expectations are anchored lower. The market is willing to give the Fed time, but it is not pricing a rapid “mission accomplished.”
Macro growth prints remain sturdy in the rear-view mirror. Third-quarter GDP was pegged at 4.4%, with consumer and business demand still providing thrust. The growth/inflation mix is why the equity bid can coexist with firm yields and why cyclical sectors enjoy support even as gold refuses to fade.
Equities
The broad tone is constructive. SPY trades above yesterday’s finish, joined by the tech-heavy QQQ, industrially tilted DIA, and small caps via IWM. The day’s feel is less relief rally, more methodical repair. Importantly, the recovery in leadership groups is outpacing the bounce in bond-proxy sectors, a sign that dip-buyers are targeting growth and cyclicals rather than hiding in staples and utilities.
Inside mega-cap tech, the gears are turning again. MSFT, AAPL, NVDA, GOOGL, META and AMZN are all trading above prior closes. The news flow reinforces the bid: commentary around AI infrastructure demand, cloud security, and data center power constraints continues to funnel attention toward platform companies with balance sheets to spend. Reports also highlight Intel’s rising profile into earnings and AMD’s momentum streak tied to AI CPUs, which keeps the semiconductor narrative broad.
The other side of the ledger, NFLX remains under pressure after strong results met skepticism around forward guidance and the Warner Bros. deal calculus. The stock trades below its previous close at midday. This is where the market is drawing distinctions: execution and cash generation are not the only variables, perceived deal risk and capital allocation are getting rerated in real time.
Autonomy and energy transitions are a subtler subplot. TSLA is up on the session, even as separate reports flag workforce reductions abroad and competitive share shifts. The stock’s bid alongside broader AI enthusiasm shows the market is still willing to compartmentalize near-term EV softness from longer-horizon autonomy and robotics ambitions, at least through midday.
Financials are doing their job in an up-tape with firm rates. JPM, BAC and GS are all ahead of prior closes. Elevated long-end yields support net interest income optics even as debates rage about credit card caps and Treasury demand. The group is trading the here-and-now curve rather than the policy noise around it.
Healthcare continues its quiet comeback in select names. UNH is higher, JNJ and PFE are also up, while MRK trades lower. It is not a blanket bid. Drugs and payors are splitting by headline and litigation exposure, deal structures, and where the growth is most visible. The sector’s dispersion is consistent with a market that is screening for earnings resilience more than duration.
Energy is mixed. Integrateds diverge with CVX up and XOM down, while the sector ETF sits slightly below its prior close. Oil is off, and the tape is treating the group accordingly. The practical read, cyclicals are fine when growth is solid and yields are firm, but day-to-day beta will still follow the commodity tape.
Industrials are similarly uneven. CAT is modestly higher, while the broader industrial ETF is a touch lower than yesterday’s close. Defense primes like LMT and NOC are up on the day and RTX is slightly down, a reminder that program exposure, backlogs, and quarterly cadence matter more than a single geopolitical headline.
Sectors
Leadership is clean. Technology, via XLK, is above its prior finish, mirroring gains in QQQ. Financials, through XLF, are higher as the curve lifts the group’s baseline. Consumer Discretionary, XLY, is participating, consistent with a growth-led tape and firm mega-cap retail and platforms.
On the lag list, Energy XLE is fractionally lower with crude soft. Industrials XLI and Utilities XLU are down, while Staples XLP is just under yesterday’s mark. The split is textbook: when the market relaxes about the macro, money rotates away from bond-like sectors and toward duration growth and rate beneficiaries.
Healthcare XLV is slightly green, reflecting that “quality growth” bid rather than a defensive scramble. It is a nuance worth respecting. The market is not hiding, it is curating.
Bonds
Long bonds are fractionally bid, while the belly and front end are flat to softer. TLT trades a touch above yesterday’s close, IEF sits just below, and SHY is marginally lower. Against the latest yield set, the curve remains gently upward sloping from 2 to 30 years, with long rates sitting near their recent highs.
The fixed income message is straightforward. There is no rush to price cuts, and the market is comfortable that inflation cools over time rather than collapses. That is why equities can breathe while long-end yields refuse to roll over. It also explains why bond-proxy equities are out of favor and why financials can catch a bid without euphoria.
Commodities
Gold’s resilience is back on display. GLD is higher on the session, adding to this week’s gains and tracking a broader narrative that central banks and private buyers continue to underpin demand. Strategists have been lifting targets into 2026, and the price action is confirming steady sponsorship rather than speculative froth.
Silver is keeping pace. SLV trades above its prior close as well, countering views that the trade is “tired.” The divergence with crypto speaks volumes. When the market wants insurance but not volatility, it prefers metal over tokens.
Energy is a split screen. U.S. Oil Fund USO is lower from yesterday’s close, while U.S. Natural Gas Fund UNG is climbing, in keeping with reports of weather-driven demand and recent price surges in the commodity futures complex. Broad commodities, via DBC, are slightly softer midday, reflecting oil’s pullback outweighing metals’ firmness.
FX & crypto
In currencies, the euro is firmer. EURUSD trades around 1.1737, above its quoted open for the session, consistent with a softer dollar tone as immediate tariff anxiety fades.
Crypto is having a different day. Bitcoin’s reference price sits near 89,000, below the 90,000 marker and well off its intraday highs. Reports point to large sellers, fading haven bids, and a vacuum of incremental demand this week. Ethereum is also lower from its open. The takeaway, risk capital is favoring cash-flow generators and tangible hedges over high-beta tokens in this phase of the rebound.
Notable headlines
- Fed inflation gauge at 2.8% in November. Commentary characterizes the move as edging away from target and consistent with a central bank in no hurry to cut. The equity market is digesting that fine point by leaning into growth and avoiding the most rate-sensitive defensives.
- Inflation “stuck near 3%.” The phrasing is blunt but aligns with the PCE read. It acts like a speed governor on rate-cut hopes and keeps a ceiling over long-duration equity multiples.
- GDP at 4.4% in Q3. Growth remained solid, validating why cyclicals can work even when yields are firm.
- ‘Fear gauge’ spike erased after Greenland pivot. The sequence matters. Tariff talk ignited hedging demand, and a quick rhetorical pivot unwound it. The market is getting used to this cadence and is trading through it rather than around it.
- AMD’s run and Intel setup. Coverage highlights AMD’s longest winning streak in years and rising enthusiasm around AI data center CPUs, while separate notes raise the bar for Intel into earnings. That duo supports sector breadth in semis beyond a single name.
- Netflix still under pressure. Despite topping expectations, skepticism around guidance and M&A strategy keeps the stock pinned. Capital allocation risk is back in fashion as a valuation input.
- BitGo prices an IPO above range as bitcoin sags. A custody name finding demand while the underlying token sells off is a reminder that the crypto ecosystem is segmenting by business model quality.
- Gold targets raised into 2026. Strategists cite central bank and private-sector demand, which squares with the steady bid in GLD even as equities rally.
Risks
- Policy volatility. Rapid shifts in tariff rhetoric and cross-Atlantic relations can reprice risk assets faster than hedges can be reset.
- Rates creeping higher. With the 10‑year around 4.3% and inflation not yet back to target, a further grind up in yields would pressure equity duration and defensives simultaneously.
- Earnings credibility. Guidance and capital allocation, not just prints, are moving stocks. Missteps could widen dispersion.
- Liquidity pockets. Crypto weakness and persistent demand for gold hint at selective de-risking that could broaden if macro shocks reappear.
- Regulatory crosswinds. Credit card rate caps, healthcare pricing frameworks, and potential tech scrutiny each carry sector-specific headline risk.
What to watch next
- Intel’s earnings and AI capital spending color. How hyperscalers balance GPUs, custom silicon, and fabs will shape semi breadth.
- PCE and CPI trend into year‑end and January. Confirmation that inflation is moving back toward target, rather than stalling, would reset rate cut timing and sector rotations.
- Curve behavior as the 10‑year hovers near 4.3%. A decisive move in either direction will ripple through banks, utilities, staples, and high-multiple tech.
- Gold versus bitcoin. If gold keeps climbing while crypto fades, the market is telling you which “hedge” it trusts in this regime.
- Discretionary follow‑through. With XLY up midday, durability of consumer strength becomes the next check, especially as oil dips and household balance sheets adjust to rates.
- Healthcare dispersion. Watch UNH, JNJ, MRK, and PFE for whether litigation, pricing, and pipeline narratives converge or continue to split the group.
- Credit market tone. Bank leadership works best when spreads stay quiet. Any sign of stress would quickly rotate money back toward defensives.
Midday levels referenced reflect latest available quotes.