1. Moving the market

Stocks shot higher this morning as traders cheered the latest inflation data, hoping the numbers wouldn’t get in the way of a long-awaited Fed rate cut next week.

All three major indexes notched new all-time highs during the session, thanks in part to a hefty short-squeeze that sent the bears running.

The CPI report was a bit of a head-scratcher: monthly inflation ran a touch hotter than hoped, up 0.4%, but annual inflation landed right in line at 2.9%. Core CPI—excluding food and energy—looked steady, also meeting forecasts.

Still, with the jobs market flashing some cracks and weekly jobless claims jumping to the highest point since 2021, investors are convinced the Fed will be forced to cut rates, maybe even by more than a quarter-point.

Bond yields tumbled on the news, the dollar sold off, and bitcoin built on its recent run. Gold took a breather after its hot streak, digesting its latest gains.

So, with inflation nerves mostly calm for now, will the Fed’s next move keep this rally rolling, or will another surprise knock things off course?

1. Moving the market

The S&P 500 jumped to another record this morning after wholesale inflation surprised traders by falling—a welcome sign for anyone hoping the Fed will finally pull the trigger on a rate cut next week.

Oracle stole the show, with its shares rocketing more than 40% after a blockbuster AI-fueled forecast that rippled out across the tech sector.

The latest Producer Price Index (PPI) showed wholesale prices dipping 0.1% in August instead of rising, and even core PPI dropped when economists had expected an increase.

That was music to Wall Street’s ears, especially with tomorrow’s Consumer Price Index (CPI)report on deck, and the mood was optimistic that inflation might be cooling at just the right time for the Fed to act.

By the close, though, early gains fizzled, and the indexes slipped back toward the flatline—so not much changed in the end.

The Mag 7 group lagged, but Goldman’s AI Leaders basket surged as investors piled into the hottest tech names.

Bond yields and the dollar both dipped, gold closed at a fresh high (even if it couldn’t hold its best levels), and bitcoin pushed above $114k for the first time in weeks.

The way I see it, the market is hanging on every inflation headline now. The real question: Will tomorrow’s CPI print keep the Fed on track for a cut—or throw a wrench in the rally?

1. Moving the market

The push to extend yesterday’s rally sputtered out pretty quickly today. After some early enthusiasm, the major indexes slipped back and mostly hovered near unchanged before managing to eke out modest gains by the closing bell.

The big news from the Labor Department was a huge revision to last year’s job growth—turns out they overestimated by 911,000 jobs.

Since the report covers data from six months back, most traders shrugged it off for now, but it definitely plays into the broader narrative: expectations for Fed rate cuts this year keep getting stronger, and many seem to be rooting for a bigger move when the Fed meets next week.

It’s clear the jobs picture keeps softening, which could grease the wheels for rate cuts—but it also raises real questions about whether stocks have come too far, too fast.

The next wild card will be this week’s pair of inflation reports. If the numbers come in hot, the familiar threat of “stagflation” comes right back into focus, possibly forcing the Fed’s hand in the opposite direction.

Mag 7 stocks outperformed again, with Apple as a laggard. Bond yields pushed higher on inflation jitters, sending gold to a sharp intraday high before it reversed course in the afternoon.

Bitcoin saw a classic “pump and dump,” undoing its early gains as the dollar gained steam and finished higher.

So, with all eyes now on the inflation data, the big question is: will we see another leg up for equities, or does the slowdown in jobs and sticky inflation finally bring this rally to a halt?

1. Moving the market

The Nasdaq popped to a new record this morning, while the S&P 500 held mostly flat as Wall Street geared up for a week packed with crucial inflation numbers.

Nvidia bounced nearly 2% and Meta added over 1%, joining gains from other big tech names like Amazon and Microsoft, which helped the “Magnificent Seven” keep some heat under the market.

Traders are fixated on the upcoming Producer Price Index on Wednesday and Consumer Price Index on Thursday—two reports that could set the tone for what’s next with the Fed.

The weak jobs print from Friday has traders betting the Fed will finally go ahead with a rate cut at its September meeting, with chatter about the chance for a half-point move growing a bit louder.

Gold’s bull run hasn’t missed a beat, conquering $3,600 for a fresh record, while the dollar softened, and bitcoin raced back up toward Friday’s highs as bond yields drifted lower.

The way I see it, this “bad news is good news” vibe has powered rate cut hopes, but it all hinges on how these inflation reads come in.

Odds are now around 15% that we get a 0.5% cut from the Fed. But the question on my mind is: If the Fed finally delivers that cut, will equities rally—or will we get another bout of “buy the rumor, sell the fact”?