(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 wan, unconvincing bounce attempt from Tuesday’s stumble, but with enough pep in Mag 7 names to support the broad indexes. -The pops in Alphabet and Apple after a favorable antitrust ruling – the stock gains exceeding 8% and 3%, respectively – are so far holding the S & P 500 harmless against a bare majority of stocks trading in the red. -The equal-weighted S & P 500 off half a percent and small caps negative after an early rally attempt show a modest undertow of selling, though unlike Tuesday higher bond yields are not to blame. A pronounced pullback in Treasury yields instantly followed the JOLTS report showing a notable decline in job openings, which in total no longer exceed the total number of unemployed workers for the first time in four years. -Combined with predictably dovish comments to CNBC by Fed governor Christopher Waller, the data further solidified expectations for a rate cut the week after next. The market puzzle now is whether they will continue to be seen as “good news” or “insurance” cuts in a still-steady economy. The two-year Treasury yield fell just about back to its April tariff-panic low near 3.6%. -The market action – with banks and cyclicals unable to pull much strength from the decline in yields today – hints at some sensitivity to the risk of slower growth, even as the Citi US Economic Surprise Index has been on a fairly strong run. It could also simply be that the market is coiling in advance of Friday’s nonfarm payrolls report. -There’s a genuine and sharp debate in the investment community about the underlying economic trend, with Bank of America and a couple of other firms holding to a “reacceleration” call under which rate cuts are unneeded and perhaps ill-advised. Meantime, trackers of labor demand and those calculating the impact of lagged tariff drag are shooting warning flares about the Fed being too slow in resuming rate cuts. -Semiconductor stocks are refusing to give the wink to would-be bulls, with Nvidia down small as it undergoes trench warfare near the $170 price level which has so far acted as the floor to its post-July range. The iShares Semi ETF has a bit to prove here, having failed below its July 2024 high and now flirting with losing its old breakout threshold. -Big picture: The S & P 500 came through the summer on a four-month win streak, feeding off uncommonly extreme upside surprises to second-quarter earnings, a new leg in the AI enthusiasm trade and swelling anticipation of a Fed rate cut. The result is a sturdy uptrend, full valuations, hopeful but not overly giddy investor sentiment and solid credit conditions. Another bout of rotational digestion seems underway, which is for now keeping volatility subdued in the face of known seasonal tendencies for turbulence. -Speaking of credit, the post-Labor Day corporate-debt-offering surge is underway, with issuers and buyers finding current tight spreads but reasonable real yields a pleasing equilibrium. All else equal, companies locking in longer-term paper and reloading cash reserves for M & A, capex and stock buybacks is equity-positive, at least as a background factor.
