What is the poet thinking of as he watches the waves in "Break, Break, Break"?

In the poem "Break, Break, Break" by Alfred, Lord Tennyson, the speaker contemplates waves breaking upon the seashore, the children of fishermen playing together, a young sailor singing in his boat, and ships heading into port. He finds it difficult to put into words the thoughts he is having.
In fact, the poet is mourning the recent death of a loved one. He is heartbroken that he will never again be able to hear his friend's voice or touch his hand. When he writes of "the tender grace of a day that is dead," he is using the word "day" figuratively to refer to the era of time during which his friend was still alive. He is lamenting that he will no longer experience the joyous times that he was able to spend with his friend.
Tennyson wrote this poem shortly after the death of his friend Arthur Henry Hallam, who died on August 15, 1833, at the age of twenty-two. Tennyson and Hallam were very close friends, and Hallam was also engaged to Tennyson's sister Emily. The poem brings out Tennyson's sense of isolation and loss after Hallam's unexpected death.
https://www.poetryfoundation.org/poets/alfred-tennyson