(These are the market notes on today's action by Mike Santoli, CNBC's Senior Markets Commentator.) Stocks struggled with a mild hangover after a five-day buying binge that brought the S & P 500 5% off the lows, though shy of its former high, maintaining a two-month trading range. An overnight surge in Japanese bond yields that seems to have undercut a tentative rebound in bitcoin put U.S. equities back on their heels to start December. A modest 1% pickup in Nvidia after its 12% skid in November worked to offset some weakness in the majority of stocks and some profit-taking in Alphabet and Broadcom . The recovery last week took the S & P back above its 50-day moving average and confirmed a range floor near 6500. Though, as is visible here, the index is tussling with the lower end of its former uptrend path. The consensus entering December is to expect an upward tilt based largely on the calendar and the notion that the November gut check put enough of a scare into tactical traders to require that they rebuild market exposure. It's probably not wise to dismiss the seasonal rationale or deny the positive bias, though it's unclear if this alone will be enough. If we're going to cling to the almanac-dictated path, the first half of December is often soft followed by a stronger finish. Pullbacks have been quite shallow and brief, which is positive, though this also means they've stopped short of becoming comprehensively cleansing. Late last week technicians were watching closely to see of a "breadth thrust" signal fired, which would have indicated a substantive momentum surge of the sort that tends to insulate the tape from significant downside over the next six to 12 months. While the Friday rally was fairly broad, the thrust thresholds were not met. Heavy selling in bonds globally after hawkish Bank of Japan commentary and perhaps new-month reallocations had t he 10-year Treasury yield up near 4.1% again after a dip into the 3s last week. Not a threatening level for stock valuations, but notable that both longer-term yields and inflation expectations remain firm in their longstanding zones. The reality is setting in with markets that a December cut doesn't imply an aggressive easing run ahead. Perhaps three cuts priced in before a terminal "neutral" level is hit next year. This should be fine, as slower, measured cutting cycles imply a steadier economy and better stock performance. Decent action in consumer cyclicals , building on last week's bounce, on some reasonably upbeat takes on holiday sales and the cementing of a December rate-cut outlook. Industrials traded heavy, though, after another poor ISM manufacturing print. The bullish case for 2026 revolves around low-teens earnings growth (based on consensus forecasts), steady valuations on top of those earnings, a modest bump in consumer activity thanks to some tax-stimulus measures and continued aggressive AI investment. Plausible, as the popular takes always are, though midterm election years and fourth years of bull markets can sometimes throw curveballs. As more sell-side 2026 targets come in, the picture of a quite-bullish collective outlook solidifies. RBC Monday added a 7750 target, up some 14%, and the average projection is now for an 11% gain, with (so far) no strategists calling for a flat or down 2026. This is no urgent warning of excess optimism, but it can form the basis for another overshoot into next year. For now, retail traders have calmed a bit as the continued downside stabs in crypto prices seems to keep this cohort off-balance and less bold. Robinhood shares were off some 4% on the day and remain about 20% below their recent high.
