State of Market: Midday 11/18/25
Midday market check: Small caps advance while mega-cap tech lags; yields steady, commodities firmer
Rotation persists under the surface with health care, financials and energy bid; gold and oil gain as bitcoin rebounds from a sub-$90,000 dip and the euro eases slightly.
TendieTensor.com State of Market Midday
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Stocks are mixed at midday as investors continue to re-balance exposures ahead of a key earnings print and delayed macro data. Broad benchmarks are modestly lower, led by weakness in mega-cap technology, while small caps and several cyclical/defensive groups trade higher. At 1:30 p.m. ET, SPDR S&P 500 ETF Trust (SPY) is down about 0.3% from Monday’s close, Invesco QQQ Trust (QQQ) is off roughly 0.6%, and SPDR Dow Jones Industrial Average ETF (DIA) is lower by about 0.7%. In contrast, iShares Russell 2000 ETF (IWM) is up roughly 0.7%, signaling ongoing rotation away from the most crowded growth exposures and toward domestically oriented, more economically sensitive stocks.
Under the surface, sector leadership is notably different from much of this year’s pattern. Technology (XLK) is down about 1.0% midday, while Financial Select Sector SPDR (XLF) is up roughly 0.3%, Health Care (XLV) gains about 0.8%, and Energy (XLE) is higher by around 0.4%. The shift lines up with a steadier rates backdrop, a bid in commodities, and mounting investor focus on earnings durability and balance-sheet discipline outside big tech.
Macro backdrop: yields, inflation, and policy expectations
Treasury yields remain anchored above 4% on the long end. As of the latest available readings, the 10-year note yields 4.14% and the 30-year stands at 4.74%, while the 2-year is at 3.62% and the 5-year at 3.74%. The curve is positively sloped between 2s and 10s, reflecting some normalization compared to the deep inversions of recent cycles, and consistent with an outlook of moderating inflation and growth rather than a sharp re-acceleration.
Inflation data in the payload show the CPI index at 324.37 (September) and core CPI at 330.54. While index levels do not provide year-over-year rates here, market-based and model-based inflation expectations remain close to the Federal Reserve’s target range: 5-year market expectations at 2.36% and 10-year at 2.31%, with model estimates around 2.75% for the one-year horizon and near 2.3% for five and ten years. The combination suggests inflation is expected to trend near or just above 2% over the medium term.
On policy, Federal Reserve Governor Christopher Waller recently reiterated support for another 25-basis-point cut in December to support a softening labor market, indicating he is unlikely to change his view absent new information. That guidance, together with contained inflation expectations, has helped steady rate volatility after a jumpy period tied to the government shutdown and delayed data. Some initial claims figures that leaked during the shutdown appeared to show layoffs remaining low in the mid-shutdown period, though investors will want comprehensive, revised releases to confirm the trend.
Equities: rotation favors small caps, health care, financials, and energy
Today’s tape continues the rotation that’s been building: IWM’s roughly 0.7% gain contrasts with an approximate 0.6% decline for QQQ. Investors are balancing concerns about the durability of AI-driven capex cycles and stretched positioning in select mega-caps with opportunities in under-owned areas whose earnings streams may be less rate-sensitive or benefit from cyclical normalization.
Multiple news items frame the day’s narrative in technology. A MarketWatch piece argues that the economics of generative AI could pressure returns for Amazon and Microsoft as capital intensity rises, while another highlights a new multibillion-dollar strategic partnership involving Microsoft, Nvidia, and Anthropic. A separate MarketWatch item notes growing investor unease around AI-related debt issuance, with Amazon joining the recent borrowing wave as tech credit spreads face incremental pressure. Additionally, a widespread internet disruption tied to Cloudflare brought brief outages to major services, an operational reminder of concentration risk in critical infrastructure.
Against that backdrop, XLK is lower about 1.0%, and QQQ is underperforming SPY. The market’s focus is squarely on Nvidia’s upcoming earnings, where investors will look for clarity not only on 2026 but also on the 2027 roadmap, given prior hints about next year’s trajectory. Recent commentary has highlighted bubble worries in parts of tech and noted that the sector is on pace to snap a months-long winning streak; Monday’s session also marked the worst day in about a month for the S&P 500 and Nasdaq, adding to a more cautious tone heading into the print.
Elsewhere in single-name news flow that informs sector tone, Home Depot shares fell after an earnings miss and a downbeat outlook tied to housing-market softness and limited storm activity—factors that speak to consumer and housing demand dynamics. In consumer durables, Energizer reported a rare profit miss and lowered outlook, citing tariff drag, with shares experiencing an outsized selloff. On the positive side for communication services and AI-adjacent software, Alphabet received a boost after Berkshire Hathaway disclosed a multibillion-dollar stake, while analysts continue to flag its AI roadmap (including anticipated Gemini updates) as a key catalyst.
Financials are firm, with XLF up roughly 0.3%. Stabilizing yields and a steeper curve versus the front end (relative to last year’s extremes) provide a constructive backdrop for net interest margins, even as overall loan demand remains a watch item. Health care outperformance (XLV up about 0.8%) reflects a mix of defensiveness and idiosyncratic drivers, including ongoing developments around drug pricing and access (recent headlines included price moves on GLP-1s) that can reshuffle sub-sector expectations. Energy’s gains (XLE up about 0.4%) align with firmer crude and resilience in broader commodity baskets.
Bonds: mixed tone with long duration softer
The Treasury ETF complex shows a mixed signal midday. Long duration is slightly weaker, with iShares 20+ Year Treasury Bond ETF (TLT) down about 0.3% from Monday’s close. By contrast, the belly and front end are marginally firmer: iShares 7–10 Year Treasury Bond ETF (IEF) is up about 0.1% and iShares 1–3 Year Treasury Bond ETF (SHY) is fractionally higher. The pattern is consistent with a modest bear-steepening impulse—long-end yields edging up relative to the front and belly—despite stable medium-term inflation expectations and an anticipated December cut. Positioning and supply technicals are likely in play until fuller economic data releases reset the macro narrative.
Commodities: gold, silver, and oil advance; broad basket firmer
Gold and silver are higher. SPDR Gold Shares (GLD) is up about 0.6%, while iShares Silver Trust (SLV) gains roughly 1.1%. The move comes amid discussion of gold’s evolving correlation with risk assets; several analyses noted that gold has recently traded more in lockstep with equities and bitcoin, potentially reflecting a shared sensitivity to liquidity conditions. Another piece highlighted central banks as the dominant buyers in this cycle and pointed to longer-term upside scenarios even after recent shakeouts.
Crude is firmer, with United States Oil Fund (USO) up about 1.2%. Bloomberg reports that buying from India and China has helped cushion a market grappling with glut concerns, aided by disruptions and sanctions affecting Russian flows; separate reporting noted signs of Russia’s Novorossiysk Port resuming operations, which could temper supply risk premiums. A MarketWatch article underscored that major integrated producers such as Chevron and Exxon plan to keep boosting production despite price variability—an industry stance that can anchor longer-cycle supply expectations. Broad commodities are higher as well, with Invesco DB Commodity Index Tracking Fund (DBC) up about 0.7%. Natural gas (UNG) is up roughly 0.5%.
FX and crypto: euro dips slightly; bitcoin rebounds sharply from intraday lows
On the currency side, EURUSD is modestly softer versus its provided open, around 1.158 at midday compared to an open near 1.160. With long-end U.S. yields holding north of 4%, the dollar remains a factor for global asset pricing, though the limited intraday move in the euro suggests rates are the primary lever for equities today.
Crypto is volatile but off the lows. Bitcoin (BTCUSD) marked a session low below $90,000 earlier and now trades near $93,000, above the provided open, illustrating an intraday rebound after testing levels last seen in April. Several reports frame the selloff as driven more by profit-taking among larger holders than forced liquidations, though liquidity absorption has weakened. Ether (ETHUSD) is firmer, trading well above its provided open and near the top end of today’s range.
Positioning and sentiment
Positioning remains a key macro factor. A recent survey highlighted elevated equity allocations and low cash balances among fund managers—conditions that can amplify drawdowns if catalysts disappoint. Monday’s pullback and today’s ongoing rotation suggest investors are trimming the most extended tech exposures ahead of a binary event while adding to areas with more stable valuation frameworks or improving relative fundamentals.
What to watch next
- Nvidia earnings: The quarter’s marquee report. Investors will scrutinize commentary on supply-demand balance, data center capex durability, networking, and the multiyear product cadence into 2027.
- Backlog of macro releases: With shutdown-related delays and partial leaks, the next full claims and labor-market reads will matter for validating Waller’s case for a December cut.
- Yield dynamics: After a steadier stretch, any renewed volatility in the long end could quickly ripple through tech valuations and financials’ relative performance.
- Sector breadth: Can the current leadership—financials, health care, energy, small caps—sustain if mega-cap tech wobbles, or will rotations be short-lived?
- Crypto spillovers: Bitcoin’s stabilization or renewed weakness can modulate risk appetite at the margin given the recent cross-asset correlation episodes.
Risks
- Event risk around a single mega-cap earnings report that disproportionately influences index-level sentiment.
- Crowding/positioning unwinds if growth leadership disappoints or if AI-capex returns compress faster than expected.
- Credit-market sensitivity to rising tech issuance and any widening in spreads.
- Operational/cyber risks highlighted by today’s internet infrastructure disruptions.
- Policy and geopolitical risks, including tariff and regulatory shifts and evolving energy supply headlines.
Bottom line
Midday trading reflects a still-constructive macro backdrop—anchored inflation expectations and the prospect of a December rate cut—with an equity market rotating toward under-owned groups as investors de-risk into a pivotal earnings catalyst. Long-end rates are a touch higher, commodities are firmer, and crypto has bounced from earlier lows. The path into the close will likely hinge on how much pre-positioning investors choose ahead of the evening’s and week’s data flow, and whether breadth in financials, health care, energy, and small caps can offset continued consolidation in the tech complex.
Stocks are mixed at midday as investors continue to re-balance exposures ahead of a key earnings print and delayed macro data. Broad benchmarks are modestly lower, led by weakness in mega-cap technology, while small caps and several cyclical/defensive groups trade higher. At 1:30 p.m. ET, SPDR S&P 500 ETF Trust (SPY) is down about 0.3% from Monday’s close, Invesco QQQ Trust (QQQ) is off roughly 0.6%, and SPDR Dow Jones Industrial Average ETF (DIA) is lower by about 0.7%. In contrast, iShares Russell 2000 ETF (IWM) is up roughly 0.7%, signaling ongoing rotation away from the most crowded growth exposures and toward domestically oriented, more economically sensitive stocks.
Under the surface, sector leadership is notably different from much of this year’s pattern. Technology (XLK) is down about 1.0% midday, while Financial Select Sector SPDR (XLF) is up roughly 0.3%, Health Care (XLV) gains about 0.8%, and Energy (XLE) is higher by around 0.4%. The shift lines up with a steadier rates backdrop, a bid in commodities, and mounting investor focus on earnings durability and balance-sheet discipline outside big tech.
Macro backdrop: yields, inflation, and policy expectations
Treasury yields remain anchored above 4% on the long end. As of the latest available readings, the 10-year note yields 4.14% and the 30-year stands at 4.74%, while the 2-year is at 3.62% and the 5-year at 3.74%. The curve is positively sloped between 2s and 10s, reflecting some normalization compared to the deep inversions of recent cycles, and consistent with an outlook of moderating inflation and growth rather than a sharp re-acceleration.
Inflation data in the payload show the CPI index at 324.37 (September) and core CPI at 330.54. While index levels do not provide year-over-year rates here, market-based and model-based inflation expectations remain close to the Federal Reserve’s target range: 5-year market expectations at 2.36% and 10-year at 2.31%, with model estimates around 2.75% for the one-year horizon and near 2.3% for five and ten years. The combination suggests inflation is expected to trend near or just above 2% over the medium term.
On policy, Federal Reserve Governor Christopher Waller recently reiterated support for another 25-basis-point cut in December to support a softening labor market, indicating he is unlikely to change his view absent new information. That guidance, together with contained inflation expectations, has helped steady rate volatility after a jumpy period tied to the government shutdown and delayed data. Some initial claims figures that leaked during the shutdown appeared to show layoffs remaining low in the mid-shutdown period, though investors will want comprehensive, revised releases to confirm the trend.
Equities: rotation favors small caps, health care, financials, and energy
Today’s tape continues the rotation that’s been building: IWM’s roughly 0.7% gain contrasts with an approximate 0.6% decline for QQQ. Investors are balancing concerns about the durability of AI-driven capex cycles and stretched positioning in select mega-caps with opportunities in under-owned areas whose earnings streams may be less rate-sensitive or benefit from cyclical normalization.
Multiple news items frame the day’s narrative in technology. A MarketWatch piece argues that the economics of generative AI could pressure returns for Amazon and Microsoft as capital intensity rises, while another highlights a new multibillion-dollar strategic partnership involving Microsoft, Nvidia, and Anthropic. A separate MarketWatch item notes growing investor unease around AI-related debt issuance, with Amazon joining the recent borrowing wave as tech credit spreads face incremental pressure. Additionally, a widespread internet disruption tied to Cloudflare brought brief outages to major services, an operational reminder of concentration risk in critical infrastructure.
Against that backdrop, XLK is lower about 1.0%, and QQQ is underperforming SPY. The market’s focus is squarely on Nvidia’s upcoming earnings, where investors will look for clarity not only on 2026 but also on the 2027 roadmap, given prior hints about next year’s trajectory. Recent commentary has highlighted bubble worries in parts of tech and noted that the sector is on pace to snap a months-long winning streak; Monday’s session also marked the worst day in about a month for the S&P 500 and Nasdaq, adding to a more cautious tone heading into the print.
Elsewhere in single-name news flow that informs sector tone, Home Depot shares fell after an earnings miss and a downbeat outlook tied to housing-market softness and limited storm activity—factors that speak to consumer and housing demand dynamics. In consumer durables, Energizer reported a rare profit miss and lowered outlook, citing tariff drag, with shares experiencing an outsized selloff. On the positive side for communication services and AI-adjacent software, Alphabet received a boost after Berkshire Hathaway disclosed a multibillion-dollar stake, while analysts continue to flag its AI roadmap (including anticipated Gemini updates) as a key catalyst.
Financials are firm, with XLF up roughly 0.3%. Stabilizing yields and a steeper curve versus the front end (relative to last year’s extremes) provide a constructive backdrop for net interest margins, even as overall loan demand remains a watch item. Health care outperformance (XLV up about 0.8%) reflects a mix of defensiveness and idiosyncratic drivers, including ongoing developments around drug pricing and access (recent headlines included price moves on GLP-1s) that can reshuffle sub-sector expectations. Energy’s gains (XLE up about 0.4%) align with firmer crude and resilience in broader commodity baskets.
Bonds: mixed tone with long duration softer
The Treasury ETF complex shows a mixed signal midday. Long duration is slightly weaker, with iShares 20+ Year Treasury Bond ETF (TLT) down about 0.3% from Monday’s close. By contrast, the belly and front end are marginally firmer: iShares 7–10 Year Treasury Bond ETF (IEF) is up about 0.1% and iShares 1–3 Year Treasury Bond ETF (SHY) is fractionally higher. The pattern is consistent with a modest bear-steepening impulse—long-end yields edging up relative to the front and belly—despite stable medium-term inflation expectations and an anticipated December cut. Positioning and supply technicals are likely in play until fuller economic data releases reset the macro narrative.
Commodities: gold, silver, and oil advance; broad basket firmer
Gold and silver are higher. SPDR Gold Shares (GLD) is up about 0.6%, while iShares Silver Trust (SLV) gains roughly 1.1%. The move comes amid discussion of gold’s evolving correlation with risk assets; several analyses noted that gold has recently traded more in lockstep with equities and bitcoin, potentially reflecting a shared sensitivity to liquidity conditions. Another piece highlighted central banks as the dominant buyers in this cycle and pointed to longer-term upside scenarios even after recent shakeouts.
Crude is firmer, with United States Oil Fund (USO) up about 1.2%. Bloomberg reports that buying from India and China has helped cushion a market grappling with glut concerns, aided by disruptions and sanctions affecting Russian flows; separate reporting noted signs of Russia’s Novorossiysk Port resuming operations, which could temper supply risk premiums. A MarketWatch article underscored that major integrated producers such as Chevron and Exxon plan to keep boosting production despite price variability—an industry stance that can anchor longer-cycle supply expectations. Broad commodities are higher as well, with Invesco DB Commodity Index Tracking Fund (DBC) up about 0.7%. Natural gas (UNG) is up roughly 0.5%.
FX and crypto: euro dips slightly; bitcoin rebounds sharply from intraday lows
On the currency side, EURUSD is modestly softer versus its provided open, around 1.158 at midday compared to an open near 1.160. With long-end U.S. yields holding north of 4%, the dollar remains a factor for global asset pricing, though the limited intraday move in the euro suggests rates are the primary lever for equities today.
Crypto is volatile but off the lows. Bitcoin (BTCUSD) marked a session low below $90,000 earlier and now trades near $93,000, above the provided open, illustrating an intraday rebound after testing levels last seen in April. Several reports frame the selloff as driven more by profit-taking among larger holders than forced liquidations, though liquidity absorption has weakened. Ether (ETHUSD) is firmer, trading well above its provided open and near the top end of today’s range.
Positioning and sentiment
Positioning remains a key macro factor. A recent survey highlighted elevated equity allocations and low cash balances among fund managers—conditions that can amplify drawdowns if catalysts disappoint. Monday’s pullback and today’s ongoing rotation suggest investors are trimming the most extended tech exposures ahead of a binary event while adding to areas with more stable valuation frameworks or improving relative fundamentals.
What to watch next
- Nvidia earnings: The quarter’s marquee report. Investors will scrutinize commentary on supply-demand balance, data center capex durability, networking, and the multiyear product cadence into 2027.
- Backlog of macro releases: With shutdown-related delays and partial leaks, the next full claims and labor-market reads will matter for validating Waller’s case for a December cut.
- Yield dynamics: After a steadier stretch, any renewed volatility in the long end could quickly ripple through tech valuations and financials’ relative performance.
- Sector breadth: Can the current leadership—financials, health care, energy, small caps—sustain if mega-cap tech wobbles, or will rotations be short-lived?
- Crypto spillovers: Bitcoin’s stabilization or renewed weakness can modulate risk appetite at the margin given the recent cross-asset correlation episodes.
Risks
- Event risk around a single mega-cap earnings report that disproportionately influences index-level sentiment.
- Crowding/positioning unwinds if growth leadership disappoints or if AI-capex returns compress faster than expected.
- Credit-market sensitivity to rising tech issuance and any widening in spreads.
- Operational/cyber risks highlighted by today’s internet infrastructure disruptions.
- Policy and geopolitical risks, including tariff and regulatory shifts and evolving energy supply headlines.
Bottom line
Midday trading reflects a still-constructive macro backdrop—anchored inflation expectations and the prospect of a December rate cut—with an equity market rotating toward under-owned groups as investors de-risk into a pivotal earnings catalyst. Long-end rates are a touch higher, commodities are firmer, and crypto has bounced from earlier lows. The path into the close will likely hinge on how much pre-positioning investors choose ahead of the evening’s and week’s data flow, and whether breadth in financials, health care, energy, and small caps can offset continued consolidation in the tech complex.