Overview
The tape is leaning risk-on at midday. Mega-cap tech is putting a bid under the benchmarks while oil and precious metals rip on geopolitics. The counterweight is in defensives and duration. Utilities and long bonds are soggy, a familiar rotation when growth hopes run alongside a small uptick in yields.
By the numbers, the broad proxies are higher. SPY is trading near 687.52, up about 4.67 points from the prior close. The tech-heavy QQQ sits around 608.19, roughly 6.89 points above yesterday, while the industrially tilted DIA is up about 2.48 to 498.33. Small caps via IWM are firmer by about 2.45 to 265.49. That is a broad advance, with leadership coming from technology, energy, and consumer cyclicals.
The day’s character is shaped by two crosswinds. First, geopolitics. Oil is jumping after escalation rhetoric around U.S.–Iran tensions, which is feeding a decisive move in energy equities and a wider pop across commodity baskets. Second, the long-running AI capital cycle remains in the driver’s seat. A fresh multi-year chip supply tie-up between Meta and Nvidia is stabilizing sentiment after software wobbles, and that is visible across semis and platform names.
Under the surface, dispersion still rules. Utilities are down, healthcare is lagging, and bond proxies are on the back foot as Treasury ETFs tick lower. Crypto is softer. The dollar has a slight bid versus the euro midday. The message is consistent with a market rotating toward growth and real-asset exposure while trimming interest-rate sensitivity.
Macro backdrop
Rates remain the fulcrum. The latest available Treasury curve puts the 10-year yield near 4.04%, down from the peak levels seen earlier in the month but still high enough to matter for equity valuation math. The 2-year sits close to 3.40%, with the 30-year around 4.69%. The curve is less inverted than last year’s extremes, yet not fully healed. Into today’s session, Treasury ETFs are trading slightly lower, which implies a modest intraday lift in yields.
Inflation data continue to argue for patience rather than victory laps. The most recent CPI reading shows the headline index near 326.59 and core at roughly 332.79 on the index scale, while modeled inflation expectations remain anchored. The 1-year expectation is just under 2.59%, the 5-year near 2.37%, and the 10-year a touch above 2.36%. That anchoring matters for risk assets because it reduces the odds of a renewed policy shock, even as the price level stays well above the pre-pandemic baseline.
Growth optics have improved at the margin. A jump in housing starts to the best level in five months hints at some thaw in a sector that has been beaten up by mortgage rates. At the same time, several pieces highlight that business investment is emerging from a two-year slump as the AI buildout spreads. That combination, firmer capex with tentative housing stabilization, is the kind of cocktail that keeps soft-landing talk alive. It also explains why cyclicals can rally alongside higher oil without seeing the usual recession alarms trip immediately.
Still, the macro picture carries a tension that experienced traders recognize. The 10-year’s hover near 4% has coincided with a more anxious conversation about AI’s winners and losers, and with recurring bouts of factor whiplash. When capital expenditure plans mushroom but the path to monetization takes time, the market tilts toward proven cash generators and critical suppliers. That is showing up again today.
Equities
Index proxies are green and skewed toward growth. SPY has added about 4.67 points versus the prior close, QQQ is up roughly 6.89, and DIA is higher by about 2.48. IWM is advancing nearly 2.45 points. The pattern fits a relief bid in mega-cap tech with a side of small-cap participation.
On the AI axis, a fresh statement of demand is helping. Reporting points to Meta committing to buy millions of Nvidia chips across current and next-gen architectures. That is not a new narrative, but it is a timely one. NVDA is trading near 188.81, up from a 184.97 prior close. The stock’s gain is modest in points, but psychologically it shores up the broader AI complex after weeks of uneven factor rotation and software stumbles.
Other platform names are participating. MSFT trades around 401.08 versus 396.86 yesterday, a roughly four-point lift. GOOGL sits near 303.48 versus 302.02. AMZN has advanced to about 205.58 from 201.15 as commerce and cloud narratives continue to benefit from incremental AI productivity stories and operational discipline. AAPL is up to around 265.26 from 263.88 amid renewed focus on its early-March product slate and reports of new device and AI features. The point-to-point moves are not explosive, but they signal buyers leaning back into the megacaps that control spend, supply chains, and distribution.
Not all tech is in gear. META is fractionally softer around 637.84 versus 639.29, a reminder that dispersion within the cohort is alive. Software has been the most fragile corner of the stack in recent sessions after cautious outlooks from security names and questions about AI cannibalizing legacy seats. Today’s index-level resilience coexists with that micro volatility.
Outside big tech, autos and platforms linked to consumer demand are doing their part. TSLA is higher near 414.00 against a 410.63 prior mark, modest in magnitude but additive to cyclical tone. Home improvement bellwether HD is slightly firmer at about 383.39 from 383.04, consistent with the housing-starts pulse and a market willing to price some stability in big-ticket discretionary categories.
Banks are leaning higher with the curve tone. JPM sits around 310.09 versus 307.13, BAC trades near 53.22 versus 52.74, and GS is up to roughly 937.15 from 916.04. A slightly steeper curve setup helps the psychology for net interest margins, and the cyclical lift is enough to keep a bid in the money-center names at midday.
Healthcare is mixed to weaker. LLY is off to about 1019.00 from 1036.05. MRK is lower near 120.68 from 121.57, and UNH is a touch below its prior mark near 288.72 from 289.09. There are stock-specific headlines in the group, including trial and designation updates that keep the pipeline narrative constructive. But the day’s factor setup penalizes duration and bond proxies, and healthcare is taking some of that hit. JNJ is marginally up at 243.50 from 243.33, bucking the drift on discrete drug news flow, while PFE is fractionally higher at 27.39 from 27.37.
Media, telecom and streaming sit in the middle. NFLX is trading near 77.85 versus 77.00, a small gain as M&A chatter and content economics continue to frame the landscape. DIS is up to 107.23 from 105.44, and CMCSA is slightly higher at 31.62 from 31.55.
Sectors
Leadership is clear and it has teeth. Technology, energy and consumer discretionary are carrying the advance.
- XLK sits near 141.72, up from 139.48. The stabilizing AI spend narrative and incremental platform strength are enough to offset lingering software nerves.
- XLE is up sharply to about 54.56 from 53.75. Oil-linked equities are catching beta from a crude spike tied to potential supply risk, and investors are leaning into the group that monetizes higher realized prices most directly.
- XLY at 117.41 from 116.04 shows discretionary participation, aided by platform gains and a slightly warmer housing read.
Financials are firm. XLF at around 52.56 from 52.20 reflects the modestly friendlier curve tone and a rotation back into cyclicals. Industrials are tagging along, with XLI near 175.49 from 175.08. Defense names in particular have a geopolitical bid, while capital-goods exposure benefits from capex optimism.
On the back foot, defensives are where the damage is. XLU at 45.83 is down from 46.38. Utilities rarely shine when yields even inch higher and when oil and commodities are stealing the macro spotlight. Healthcare via XLV is a touch lower to 157.09 from 157.37, a small but telling move consistent with the day’s factor pressure. Staples are roughly flat to slightly higher with XLP at 88.29 from 88.20, reflecting the ongoing tug-of-war between defensive cash flows and rotation toward growth and cyclicals.
Put simply, today is classic dispersion. Growth plus real assets on, bond proxies off. That matters.
Bonds
Duration is slipping. Long Treasurys via TLT are near 89.80, a shade below the 89.87 prior close. Intermediates via IEF are around 97.07 from 97.20, and front-end exposure via SHY is just below its previous mark at 82.99 from 83.03.
These are small moves, not a rout. But they line up with an intraday lift in yields from the prior settle and with a 10-year that remains parked near 4.04% on the latest reading. The market is not celebrating a new disinflation impulse. It is reconciling anchored medium-term expectations with a still-elevated policy rate and a fiscal backdrop that keeps term premium from collapsing.
For equities, that trade-off keeps valuation discipline front and center. High-quality cash generators and critical suppliers continue to earn a premium. Highly levered duration plays and bond-like equities get faded on days like this. That is the rhythm showing up in today’s cross-asset tape.
Commodities
Crude is the headline act. USO is up decisively to about 78.56 from 75.73 after signals that U.S.–Iran tensions are not cooling. Traders are repricing supply risk in and around key shipping lanes, and that feedthrough is straightforward in energy equities and the broad commodity basket. The diversified commodity ETF DBC is higher around 24.11 from 23.59.
Precious metals are ripping in a notable reversal from this week’s wobble. GLD is up sharply to roughly 459.50 from 448.20. SLV is stronger at about 70.51 from 66.37. That is a sizable intraday and day-on-day jump. The irony is not lost. Recent pieces flagged gold’s slide below a round-number threshold as China holidays sapped demand. Today’s move shows how quickly the haven and real-asset bid can return when geopolitical risk and inflation hedging impulses collide.
Natural gas is a countertrend pocket. UNG is down to about 11.62 from 11.90. Seasonal and storage dynamics have leaned against gas even as the oil complex tightens on headline risk and regional supply stories.
Within energy equities, the integrated majors are following the barrel. XOM is up to around 150.07 from 146.19. CVX is higher at 182.81 from 180.55. The linkage is tight today because this is a price-led rally with a geopolitical tailwind, not a nuanced factor shuffle where oil lags. That tight coupling is why XLE is one of the session’s leaders.
FX & crypto
The dollar has a modest midday lift versus the euro. EURUSD marks near 1.1810, down from its open around 1.1847. The move is small in absolute terms, but it aligns with a day where U.S. growth proxies outperform and yields firm at the margin.
Crypto is softer. Bitcoin trades near 67,120 on a composite mark versus an open around 67,798. Ethereum is near 1,971 versus an open close to 1,999. The drift lower in crypto while equities rally is a familiar divergence on days when traditional risk rallies on earnings and macro headlines rather than liquidity impulses.
Notable headlines
- Oil repricing on geopolitics: Reports this morning highlighted a more hawkish tilt in U.S.–Iran rhetoric and the possibility of military options on the table. Crude is higher more than 2% on those headlines, which is flowing through directly to energy stocks.
- AI capex keeps rolling: Meta is reported to have committed to buying millions of NVDA chips across current and next-gen platforms, a fresh reminder that the AI buildout is still in acceleration mode. That helps tech steadiness at midday and keeps the supplier complex in focus.
- Business investment momentum: Coverage points to business investment emerging from a two-year slump as the AI boom broadens. That macro shift is consistent with today’s cyclicals strength and small-cap participation.
- Rates and AI anxiety: A recent piece framed the 10-year’s approach to 4% as an anxiety valve for AI trades, capturing the push and pull we have seen between software and semis. Today’s action validates the split, with semis steadier and software still uneven.
- Housing pulse: Housing starts jumped to the best in five months late last year, a small but welcome data point that the sector retains momentum into the new year. It is relevant given the modest lift in home-improvement and rate-sensitive cyclicals today.
- Precious metal whipsaw: Earlier in the week, gold’s hold above a psychological threshold cracked. Today, the move is the other way, with haven and real-asset hedging back in demand as oil jumps and geopolitical risk rises.
- Software shakiness persists: Recent cautious outlooks from cybersecurity names and analyst resets have left software vulnerable. While megacaps are stabilizing the indices, the software subsector still looks like the pressure valve when the market rethinks AI cannibalization risk.
- Policy and spending watch: Pieces highlighting concerns over the pace and monetization of AI capex remain in the background. The market is giving the benefit of the doubt today, but that skepticism caps upside for the more speculative parts of the stack.
Risks
- Escalation risk in the Middle East that disrupts energy supply routes and drives a sharper commodity shock.
- Re-acceleration in yields that pressures equity multiples, particularly for long-duration assets and bond proxies.
- AI capex monetization gaps, where spend outruns cash returns and triggers rotation out of higher-multiple tech.
- Software revenue cannibalization from AI tools that undermines seat-based pricing and renewals.
- Demand air pockets in housing or consumer durables if rates back up or labor softens.
- Liquidity and volatility spikes around policy headlines that challenge today’s risk-on posture.
What to watch next
- 10-year Treasury versus 4% on a closing basis. A sustained move higher would likely deepen the defensive selloff and cap tech’s relief bounce.
- Follow-through in NVDA and the broader semi complex ahead of upcoming catalysts. Supplier resilience remains the litmus test for AI capex credibility.
- Energy equities’ sensitivity to incremental Middle East headlines. Watch XLE, XOM, and CVX against crude proxies like USO.
- Software guidance and billings updates across security and enterprise names. The sector is still the pressure point for AI cannibalization fears.
- Housing data flow versus home improvement and building products exposure. The recent uptick in starts needs confirmation to sustain rate-sensitive cyclicals.
- Utilities and healthcare as yield gauges. Continued weakness in XLU and XLV would confirm the day’s factor tilt if yields edge up into the close.
- Dollar tone against the euro. Further USD strength would reinforce the small lift in U.S. yields and could weigh on commodities at the margin.
- Crypto divergence. Continued softness in BTC and ETH while equities rally would underscore that today’s bid is about earnings and macro, not liquidity waves.