(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.) Wall Street holds near record highs in a government-data blackout , with enough rotational energy toward left-behind groups, refreshed confidence in the AI spending frenzy, certainty of a Fed rate cut this month and speculative aggression in lower-quality longshots to keep the indexes aloft. In the absence of a monthly jobs report to create a concentrated node of repriced expectations and market volatility, the tape reverts to the prevailing slow-grind uptrend and investors defer to pre-existing assumptions of a slack labor market eliciting looser policy but not foretelling broad economic pain. A weak ISM Services report seemed to give an extra push to a rotation toward small-caps and away from mega-tech ( Russell 2000 up 0.8% to a 0.4% decline in the Nasdaq-100 ), as if executing the “easy Fed” playbook, though the bond market heard no such message, yields holding steady. Some signs of overheating and exhaustion arguably raise an alert for potential erratic energy and emerging fragility, but this market has rendered plenty such alarms false. Large-cap cult momentum names Tesla and Palantir exerted pressure on the S & P 500, even as micro-caps fly , quantum-computing lottery tickets surge , crypto presses to former highs , and Robinhood shares add 2% today, 22% this month and almost 300% year to date. Some odd extreme readings are observable from the remarkable degree of big-cap index resilience and wide-swinging/fast-rotating individual stocks and sectors. Here’s the ratio of the average stock’s realized volatility relative to the S & P 500’s realized vol. An extraordinary amount of fast-shifting, offsetting action occurring. There’s at least a chance this breaks containment at some point, but so far it’s merely keeping things orderly on the surface. Big picture: The bull market is nearing its third anniversary with a hard-to-fight technical setup, elevated valuations, broad investor agreement that we have an AI bubble in the making and not poised to burst and the Fed executing its second soft-landing rate-cut campaign in a year’s time. The market still trades as if the pros don’t feel exposed enough to stocks, and strategists have had to pursue the index higher after the springtime confidence crash reversed faster than expected. We’ll see if this persists long enough to make the widespread expectations for a fourth-quarter performance chase a reality.
