(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.) A new quarter but the same old routine in the markets: A mixed but resilient tape pushing the benchmark index to new highs through persistent momentum in core AI plays, retail-trader favorites and opportunistic rotation into a laggard sector. After bumping up against the 6700 level twice last week, the S & P 500 has poked above it for now. Tesla , Apple and Nvidia added to recent gains, while the lifting of some regulatory threats has driven a sudden buying panic in pharmaceutical and other healthcare names. Eli Lilly was the top upside contributor to the S & P on the day with a near-9% pop. Healthcare was clearly deeply out of favor and spring-loaded for a mean-reversion rebound. Note how its vertical move has merely allowed it to re-converge with the other traditional defensive sector, consumer staples . Both are deeply underwater against the broad market. A decline in private payrolls last month in the ADP survey was a wide miss of forecasts and is all Wall Street will likely get with the government shutdown preventing the release of Friday’s planned payroll report. Bonds liked the soft ADP print though did not overreact, yields retracing lower toward week-ago levels, as an October Fed rate cut is priced as a near sure thing. The markets are working on the hopeful, though not fully implausible, assumption that slack labor conditions are both opening the way for another rate cut or two but aren’t clearly signaling a broader downturn in the economy. The “no hire/no fire” dynamic maintains Jay Powell’s “curious kind of balance” in the jobs arena, but torrid corporate capex spending, still-wide fiscal deficits and oncoming tax benefits from the fiscal package passed over the summer lie ahead. By some estimates, the early-2026 tax-refund season will return 40% more to households than in recent years. This idea that the Fed is taking the pressure off an economy that is not at acute risk remains at the center of the bullish thesis. As does the notion that institutional investors have remained more lightly exposed to stocks than they’d prefer given the strength of the monster six-month rally. Whether the big money is truly under-positioned or simply reluctant to sell depends on the metric observed, but the market itself behaves as if this is the case — shallow dips, rotation rather than retreat, late-day phantom buying programs. For how long, it’s hard to say, as almost no one seems eager to fight the 75%-80% probability that the fourth quarter will be positive for the indexes. At some point this will build toward a fragile complacency, if not yet. The index uptrend remains pretty orderly, even with torrents of erratic action in the red-hot speculative, thematic portions of the market. Here’s a six-month look at two quantum-computing plays, and two drone makers. Very different businesses, financial results ranging from solid to hardly there at all, but the stocks have traced out similar gear-melting gains. Some of the consumer-credit proxies that were crushed Tuesday bounced at least faintly ( Capital One , Upstart , Affirm ), though Ally Financial reversed lower after an early upside try. Hard to say whether the market is registering deeper concern over lower-income solvency or it was a noisy rotation out of lesser-quality financials, but for now whatever it was appears on tentative hold. Market breath is merely OK, with around 60% of NYSE volume in advancing stocks. VIX slipping to 16, an unthreatening level though a notch above the sub-15 readings from late August, when the S & P 500 was 2% lower. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
