(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.) The market broadly hesitated just below record highs, finding nothing much to react to in the latest Fed-White House drama as stocks generally held to the broad expectation created by Fed Chair Powell’s speech on Friday that a rate cut in a few weeks alongside a still-steady U.S. economy is plausible. The assertion by President Trump that he is firing Fed Governor Lisa Cook could be part of a broader plan to create a majority on the Fed board, though the markets aren’t finding much in the moment to reprice based on hypotheticals about a less-independent Fed. For one thing, it’s a few too many links down the chain to confidently trade the implications yet. For another, Powell signaled a bias to resume trimming rates, which has been built into bond pricing. Finally, equities would initially be fine with overly easy Fed policy and allowing inflation to run near 3% before it created distortions or a real-income shock to consumers. The long end of the Treasury curve leaked higher just a touch , the 30-year back above 4.9% while the 2-year yield settled back a touch. Here again a steeper curve is palatable unless and until it suggests inflation expectations blowing out the long end in a way that would be punitive to the economy and stock valuations. Meantime, the economic inputs continue to come in “OK but mixed.” Core durable goods orders in July were ahead of forecasts , feeding into a modest rise lately in the Citi US Economic Surprise Index, though labor-market readings remain more pressured. The spread between those in the Conference Board consumer confidence survey saying jobs are “plentiful” versus “hard to get” narrowed to a new cycle low. Internally, the market has resumed its rotational churn while holding the S & P 500 roughly flat, this time favoring small-caps, banks and industrials, reinforcing cyclical leadership that has both sent a reassuring macroeconomic message and raised the bar for how the economy must perform from here on out in order to satisfy the Street. Hard to see much edge in trading Nvidia ahead of tomorrow’s quarterly results, but a couple of observations: Its sheer heft means investors might simply be standing aside before setting new bets . With a 6% options-implied move and 8.1% weighting in the S & P 500, this suggests an as-expected NVDA reaction would spur a 0.5% move in the index, all else staying equal. Beyond that, though, the history of the past couple of years shows that NVDA’s stock move isn’t a reliable directional driver of the broad tape beyond the reflex reaction. The broad rethink of the AI-investment theme in recent weeks has coincided with an overdue cooling-off of the high-momentum stocks, raising the possibility that this was a narrative developing to fit the price action. Still, the underwhelmed response to ChatGPT-5, Sam Altman’s AI-bubble comments , worry over the crowding out of other capital spending by data centers, the upward pressure on electricity prices and the noise around NVDA sales to China are all legitimate tests of conviction for AI believers. Nvidia is pegged to earn $146 billion next fiscal year on $262 billion in revenue. The gross tonnage of incremental AI-infrastructure spending looking out several quarters simply has to be pretty significant and assured to keep this story moving, given the company’s $4.4 trillion market value. The consensus revenue forecast for fiscal 2030 is up $100 billion from next year’s bogey. Is that a lot or not so much, given the overall scale of this spending binge?
