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(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’s ability to absorb the unwind of the AI-infrastructure trade is being tested more urgently; its efforts to rotate away from danger by moving to banks, value stocks and consumer cyclicals hitting some near-term limits. The ongoing pressure on the companies at the edge of the data-center buildout – which have come to be seen as potential perpetrators of eventual malinvestment – is overcoming the bid in Old Economy plays on a revitalized economy next year. The S & P 500 has sagged back toward early-October levels, first reached before the latest gangbusters earnings-reporting season. While within 3% of record highs, the index chart has taken on a more tired, stuck appearance unable to surmount the former intraday high and now back below the 50-day moving average. While not acutely oversold, the index is about as stretched to the downside as it got on Oct. 10 before a healthy bounce took hold. There remains a rotation underway – financials over tech , value over growth , defensives over high-beta stocks – simply not enough to hold the indexes harmless. The AI-food-chain plays are starting to be treated as guilty until proven otherwise, as investors fixate on competition for Nvidia in chips, wavering commitments to financing new data centers for Oracle and a general skepticism toward the eventual payoffs. Nvidia is now officially underperforming large-cap banks so far this year. Because Nvidia’s earnings forecasts have not budged, the stock is becoming cheaper, at least cosmetically. Its forward P/E based on year-ahead estimates is now 23.5, essentially the same as the S & P 500 as a whole. All of this is a refresher on a lesson I cite often, that a broader, more inclusive market less reliant on a handful of mega-caps is not necessarily a safer or more reliable market, at least at the index level. Treasury yields remain sticky , not far below multi-month highs on the long end. Expectations of run-it-hot policies, persistent global government deficits and still-elevated inflation are keeping the yield curve somewhat steep. Thursday brings a delayed CPI report, which could give bonds something to react to, though the market in general quit fixating on inflation as a major threat more than a year ago. Big picture, this stall-out phase in the S & P and chop-and-churn below the highs is confounding widely-held expectations for a late-year levitation. And it might be signaling some unfinished business into early 2026 as excesses in the AI-adjacent subsectors get drained away, while an anticipated economic reacceleration has perhaps already been fully priced. Investor equity exposures have been high, sell-side 2026 index targets aggressively upbeat, the bull cases on AI and the economy pretty well saturated. Still, once this week’s options expiration is through and indexes face a couple of holiday-inflected weeks with share prices freshly off the boil, would it be all that surprising if the tape firmed up thanks to a belated end-of-year bid?