For two weeks, one thing has bullied this market:

Every day, the 10-year Treasury seemed to climb—and stocks had to fight against it.

This morning?

The Fed's preferred inflation gauge came in cooler than expected, Treasury yields finally ticked lower, and stocks responded.

The S&P 500 and Nasdaq moved higher.

AI stocks bounced.

Nebius gained roughly 4%.

Intel climbed about 3%.

NVIDIA recovered from Tuesday's weakness.

And the catalyst was inflation.

Core PCE—the inflation measure watched closely by the Federal Reserve—rose about 3% over the past year, cooler than economists expected.

That helped push the 10-year Treasury yield back toward:

That's not a dramatic drop.

But after two weeks of relentless increases, it's the first genuine crack we've seen in the rate pressure.

And there's another encouraging trend in today's report: inflation has continued ticking lower over the past several months. Daily Read #33

We didn't get just one economic number this morning.

We got three.

And they don't all tell the same story.

🟢 INFLATION: Cooler

🔥 GDP: Revised up to 2.2%

🔥 PRIVATE PAYROLLS: +90,000

That's where today's story gets interesting.

Cooler inflation is clearly positive.

It takes pressure off the Fed.

It takes pressure off Treasury yields.

And that helps stocks.

But stronger economic growth and hiring?

That's a double-edged sword.

A strong economy is good for corporate earnings.

But it also gives the Federal Reserve less reason to ease monetary policy.

So today's message isn't:

And it certainly isn't:

Instead:

One cooler inflation report is meaningful.

But the 10-year Treasury remains around 5.25%.

The economy remains strong.

And the Fed hasn't signaled an all-clear. Daily Read #33

Two major events remain this week.

💾 MICRON — TONIGHT

Micron reports after the close.

With earnings expected in the episode to grow more than 900% from a year ago, this is an important test of AI memory demand.

As a memory-chip bellwether, Micron's report could influence the entire semiconductor group tomorrow.

Then:

🇺🇸 SEPTEMBER JOBS REPORT — FRIDAY

Today's private hiring data came in strong.

Friday gives us the government's official employment report.