State of the Market, Close
As of 4:00:58 p.m. America/New_York
Overview
The market closed like it wanted to prove a point. After last week’s bruising risk mood, equities leaned back into the “AI buildout” narrative, with big-cap tech doing the heavy lifting while defensives and parts of healthcare took the other side of the trade. QQQ ended at 614.33 versus 609.65 Friday, while SPY finished at 693.92 versus 690.62.
But the cleanest signal of the day was not in stocks. It was in the hedges. GLD jumped to 466.89 from 455.46, and SLV ripped to 76.00 from 70.19. That combination, risk assets green while precious metals surge, reads less like complacency and more like a market that still wants insurance even while it buys the dip.
Sector action reinforced the split personality. Tech caught air, XLK closed at 143.31 from 141.13. Energy stayed firm with XLE at 53.63 from 53.25. Financials sagged, XLF at 53.93 from 54.26, while healthcare was a notable drag, XLV at 156.29 from 157.71.
Under the surface, today looked like an argument between two market constituencies. One sees last week’s AI drawdown as a reset and a buying window. The other sees a world of geopolitical stress, policy noise, and capital spending that is starting to look more like heavy industry than software. Both camps showed up.
Macro backdrop
The yield curve remains steep enough to keep everyone honest. The latest Treasury yields available show the 2-year at 3.47%, the 5-year at 3.74%, the 10-year at 4.21%, and the 30-year at 4.85% (all dated 2026-02-05). That level of long-end yield is still a gravitational force for high-duration assets, even on days when tech rallies anyway. This is the market’s ongoing tension: the narrative says “future,” the discount rate says “pay me now.”
Inflation data in hand is not fresh enough to explain today’s intraday swings, but it still frames the environment. The latest CPI reading listed is 326.03 (2025-12-01) with core CPI at 331.86. Expectations, though, are calmer, the most recent market-based readings show 5-year inflation expectations at 2.39% and 10-year at 2.31% (2026-01-01). The forward 5-to-10-year measure sits at 2.22%. That matters because it creates room for risk-taking without needing an inflation panic premium every morning.
Still, the market’s “policy imagination” has a habit of getting ahead of itself. Several headlines orbit the same theme: rate expectations are sensitive to the coming jobs and inflation reports, and the bond market is not guaranteeing a smooth transmission from any eventual rate cuts to longer-term borrowing costs. Today’s tape behaved as if investors can look through near-term macro noise, but the gold bid suggests not everyone is convinced.
Equities
The major index ETFs closed mostly higher, with leadership coming from growth. QQQ ended up on the day, closing at 614.33 compared with 609.65. SPY finished at 693.92 versus 690.62. Small caps joined, IWM closed at 266.86 versus 265.02, while the Dow proxy was basically flat, DIA at 501.21 versus 501.03.
The stock-level picture explains the index split. Big tech was active and mixed, but the winners were loud enough to pull the Nasdaq higher. MSFT jumped to 413.625 from 401.14. META climbed to 677.24 from 661.46. GOOGL was modestly higher at 324.12 versus 322.86. NVDA finished at 189.79 versus 185.41, but with a wide range, it traded as high as 198.725 and as low as 183.93 on heavy volume (193,075,074).
Not every megacap played along. AAPL slipped to 274.53 from 278.12, trading down to 271.70 on volume of 41,884,754. AMZN ended lower at 208.66 from 210.32 after trading as low as 203.35. In other words, this was not a blanket “Magnificent” bounce. It was selective, and it skewed toward the software and platform names that read as direct beneficiaries of AI monetization rather than pure capex intensity.
Outside tech, the market felt rotational rather than uniformly confident. CAT rose to 742.19 from 726.20. Defense was mixed, LMT rallied to 638.375 from 623.58 while NOC dropped to 698.01 from 709.11 and RTX slid to 196.21 from 198.66. Consumer and media were soft, NFLX ended at 81.40 from 82.20 and DIS closed at 107.09 from 108.70.
Healthcare, in particular, was the day’s counterweight. LLY fell to 1044.35 from 1058.18 despite news tied to its acquisition of Orna Therapeutics for up to $2.4 billion, and the stock traded as high as 1106.94 and as low as 1042.92. MRK dropped sharply to 117.57 from 121.93. JNJ finished lower at 238.57 from 239.99. When growth leadership is narrow, defensives usually offer ballast. Today, they did not, and that is part of why the gold move stands out.
Sectors
Tech led the conversation and the scoreboard. XLK closed at 143.31, up from 141.13. The narrative support was heavy, multiple stories focused on AI spending, software dislocation, and whether last week’s AI selloff was a warning sign or simply a shakeout. The sector’s job today was simple: stabilize sentiment. It did.
Energy held in the green, XLE ended at 53.63 from 53.25, mirroring strength in oil, USO at 78.02 from 76.99. The backdrop remains geopolitical risk, one widely circulated story highlighted oil markets being on edge over elevated risks tied to Iran. The market did not need a new shock to pay up for optionality, it was already leaning that way.
Financials were a drag. XLF closed at 53.93 from 54.26 even as individual banks were mixed, GS rose to 943.62 from 928.75 while BAC eased to 56.37 from 56.53 and JPM was essentially flat at 322.09 versus 322.40. A market with a steep curve should be friendly to banks in theory. In practice, traders still appear wary of the credit and flow dynamics that show up when equities swing hard and rebalancing demand becomes less reliable.
Healthcare was the clean laggard, XLV ended at 156.29 from 157.71. Staples were softer, XLP at 87.44 from 87.94, and consumer discretionary was fractionally lower, XLY at 117.51 from 117.99. Industrials were slightly higher, XLI at 173.72 from 173.18, and utilities ticked up, XLU at 43.4801 from 43.35.
The takeaway is not “rotation is back” so much as “leadership is conditional.” The market is willing to own AI beneficiaries again, but it is also buying hard insurance in metals and keeping one eye on policy and geopolitics.
Bonds
Treasuries were calm on the surface. TLT finished essentially unchanged at 87.515 versus 87.54. Intermediate duration was slightly firmer, IEF at 96.10 versus 96.07. Cash-like duration stayed stable, SHY at 82.8799 versus 82.86.
That quiet is deceptive. With the 10-year yield last marked at 4.21% and the 30-year at 4.85% (latest available), it does not take much to rekindle the “term premium” conversation. Several stories in circulation pointed to a steepening curve and to the idea that longer-term borrowers might not feel the full benefit of any 2026 Fed easing if long rates remain sticky.
For equities, the bond market’s message is familiar: rallies are allowed, but they are not free. When duration refuses to cooperate, equity multiples have to earn their keep through earnings and narrative credibility. Today’s tech bounce was a vote of confidence in narrative credibility, at least for one session.
Commodities
Gold stole the show. GLD closed at 466.89, up from 455.46, in line with headlines noting gold reclaiming the $5,000 mark in futures. Silver was even hotter, SLV finished at 76.00 versus 70.19. Those are not gentle moves. They are urgency moves.
Oil pushed higher as well, USO ended at 78.02 from 76.99, consistent with an energy complex that remains sensitive to geopolitical risk. Broad commodities, DBC closed at 24.255 versus 24.01, modestly higher.
Natural gas was the notable loser. UNG slid to 12.1666 from 13.27. The commodity tape, taken as a whole, looked less like synchronized global growth and more like hedging and headline-driven positioning. Energy and metals bid, gas offered.
FX & crypto
The dollar story showed up through euro strength. EURUSD was marked at 1.19123479898606, with an intraday high of 1.19232635747774, low of 1.18218028067913, and open of 1.18222105442164. A MarketWatch headline explicitly flagged “Sell America” fears dragging the dollar toward a four-year low on Japan election and a China-related report. Even without a DXY print here, the message is readable: the market is willing to challenge the dollar’s safe-haven role when politics and capital flows get noisy.
Crypto was mixed to soft. Bitcoin’s mark price was 70,706.14859103, below its open of 70,962.049474375, with a low of 68,224.93546575 and a high of 71,126.96260285. Ethereum’s mark price was 2,122.67703474, above its open of 2,088.402504005, with a low of 2,006.2376514 and a high of 2,147.12869645.
The psychological contrast with gold is hard to ignore. One headline noted bitcoin’s attempt at a rebound running into gold’s resurgence, and today’s price action lined up with that framing. Bitcoin was trying to stabilize, but gold and silver were the assets getting paid.
Notable headlines
Software and AI narratives stayed front and center, but the tape picked its favorites.
- AI spending, ecosystem winners, and skepticism about the hyperscalers. Several stories pushed the same pressure point: big tech is spending enormous sums on AI infrastructure, and markets are debating whether that capex buys durable advantage or just creates an expensive arms race. This context matters for today’s tech rebound in XLK and strength in names like MSFT, META, and NVDA.
- Software stress remains real. A MarketWatch piece highlighted WDAY falling on a CEO change, framed as “really bad news” by one analyst. Another pair of stories emphasized how crushed software stocks have been and where investors are looking as the dust settles. The market can rally tech broadly, but software’s internal dispersion is still sharp.
- Gold back in the driver’s seat. MarketWatch noted gold futures reclaiming $5,000. Today, that bid showed up clearly in GLD and SLV.
- Energy risk premium persists. A MarketWatch story flagged elevated risks tied to Iran and the possibility of a U.S. strike. Oil-linked USO finished higher, and XLE stayed green.
Risks
- Cross-asset divergence. A risk-on close in QQQ alongside a sharp jump in GLD and SLV is a reminder that hedging demand remains elevated.
- Long-end yield gravity. With the latest 10-year yield at 4.21% and 30-year at 4.85%, equity duration remains vulnerable if rates reassert themselves.
- AI capex scrutiny. The market is increasingly sensitive to whether massive AI infrastructure spending translates into cash flow, especially for hyperscalers. That tension is showing up even when tech rallies.
- Policy and political noise. Headlines about “Sell America” fears and government shutdown risk highlight how quickly macro narratives can spill into FX, rates, and equity risk premia.
- Geopolitical tail risk in energy. Oil’s bid alongside related headlines keeps the energy complex in the “one headline away” category.
What to watch next
- Whether tech leadership broadens or narrows. Today’s XLK strength helped stabilize the tape, but megacaps were not all aligned, with AAPL and AMZN down.
- Precious metals follow-through. After big one-day moves in GLD and SLV, the next sessions will show whether this is a burst of fear-buying or a sustained re-rating.
- Rates, especially the long end. Watch whether the curve continues to steepen, and whether bond ETFs like TLT stay pinned while equities attempt to rally.
- FX pressure points. EURUSD near 1.19 keeps the “dollar confidence” narrative in play, especially with “Sell America” headlines circulating.
- Energy sensitivity. With USO higher and geopolitical risk elevated in headlines, watch for volatility spillover into XLE and energy majors like XOM and CVX.
- Healthcare dispersion. XLV was weak even as company-specific news hit the tape for LLY and JNJ. That sector has been a hiding spot at times. Today it was not.
- Crypto’s footing versus gold. Bitcoin’s mark price finished below its open while gold surged. That relative trade will stay on traders’ radar.