(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.) Stocks are idling to start a new week, holding just below record highs as Wall Street awaits some potentially consequential updates on the consumer and Federal Reserve policy. The S & P 500 was nearly flat, sitting in its narrowest daily range of the year, holding tight to its closing level both from Friday and last Tuesday, the day that a mostly benign Consumer Price Index report for July solidified expectations for a Fed rate cut next month. Here’s the index with last Tuesday’s closing level highlighted … Below the surface, a firmer bid was evident. A modest majority of stocks were up on the day Monday, the equal-weighted S & P 500 barely was in the green, with the longtime laggard Russell 2000 small-cap gauge lifting by about 0.3%. Cyclicals hung tough, with equal-weight consumer discretionary and industrials both outperforming the broad market . In the absence of material macroeconomic news or a strong impetus to move the top-heavy indexes, the market rotated around, lifting some of the weakest 2025 performers. The bottom ten S & P 500 stocks in terms of year-to-date return were all up on the day, with an average gain of more than 2%. They included busted growth stocks such as Trade Desk , Deckers Outdoor and Fiserv , along with some beleaguered healthcare names. Meantime, some marquee AI plays came under pressure as investors took in a few conflicting signals on the sustainability and ultimate return on all the AI capex. Meta Platforms was by far the biggest drag on the S & P 500, down 2.2%, apparently on a report in The Information detailing another restructuring of its AI efforts, perhaps exacerbated by OpenAI founder Sam Altman granting that some AI investing activity is looking a bit bubbly. Much commentary about the strength of corporate earnings as the core support for the market’s summer advance. Goldman Sachs documents how extreme the magnitude of profit beats relative to forecasts was in the second quarter. True enough, though this is largely a measure of how much estimates were chopped down in the first third of the year. S & P 500 aggregate earnings for Q2 started the year at $67, fell to about $62.50 and after this blockbuster reporting season migrated back up to $66.50. Ahead of the Fed’s Jackson Hole symposium late this week, the Street is getting itself wound pretty tight over how Chair Jay Powell might characterize the chances of a September cut. On the one hand, circumstances are plausibly converging around one idea: In June, FOMC officials anticipated two more rate cuts by year end and there are only three more meetings. And since that June outlook, we got a truly weak July jobs report. On the other hand, Powell probably has little incentive to commit firmly given high lame-duck status and the fact that more employment and inflation numbers will hit before the September meeting. With stock indexes near records, equity valuations full, credit spreads tight, volatility down and the economic-surprise indexes hanging tough in positive territory, shouldn’t investors be able to handle a somewhat longer wait for another rate cut, if it comes to that? Or are markets this strong across the board based on cuts resuming soon?
