(These are the market notes on today’s action by Mike Santoli, CNBC’s Senior Markets Commentator. See today’s video update from Mike above.) Reassuring results from Micron breathed life back into the AI-infrastructure theme while a cool CPI reading allowed investors concerned about a hawkish Fed to exhale, allowing for a relief bounce in the indexes that for now looks welcome but inconclusive. The S & P 500 , down four straight days, has seemed more stuck than stressed, pressure from the unwind of AI-levered mega-caps proving a bit too much for cyclical and financial stocks to offset fully. Still, while the index has remained within 3% of its record high, that was eight weeks ago, and the benchmark backed off decisively from those peak readings in the past week. The relief rally Thursday morning cracked briefly about noon, the S & P having failed to hold above Wednesday’s high and coinciding with a flash selloff in bitcoin . It has remained twitchy and irresolute, darting around the 6800 level in a way that suggests a cluster of options exposure sits there as Friday’s expiration nears. Semiconductors were up more than 2% as a group but remain almost 8% below their highs, investors persistently stingy about giving the group the benefit of the doubt that scarcity economics around AI will continue deep into next year. The Treasury market is having a positive but measured response to the softer-than-forecast CPI report. Noise around some assumptions used to plug missing data from the government shutdown kept investors from extrapolating too much from the benign reading. Still, it helps bolster the market’s longstanding view — based on the pricing of forward inflation protection — that inflation is no longer a scary threat, even if the Fed outlook didn’t move much on the day. After Thursday, there are 7.5 trading sessions left in 2025. If the historical patterns hold any relevance, right about now is when the December action would be expected to lean more distinctly to the upside. This chart of December’s average path comes courtesy of Goldman Sachs. The market is up 15% for the year, achieved around a near-20% mini-crash in the spring. It follows two straight 20%+ annual gains and has placed the market’s trailing three-year return in the very upper tier of historical performance. This isn’t an omen of bad times ahead (the majority of three-year bull runs continue to a fourth), but reflects some moderation in anticipated upside (unless we’re entering melt-up/bubble territory). One sign that the tactical trading community is already positioned for a levitation: here’s the National Association of Active Investment Managers weekly equity exposure gauge, now above 100 (leveraged long) for the first time since the week the S & P 500 peaked in late October.
