For two weeks, one thing has bullied this market:

RISING INTEREST RATES.

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

This morning?

THE VILLAIN FINALLY BLINKED.

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: 3.0%

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:

5.24%

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

BUT THERE'S A CATCH

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:

INFLATION IS FIXED.

And it certainly isn't:

THE RATE PROBLEM IS OVER.

Instead:

WE FINALLY GOT A CRACK IN THE PRESSURE.

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

WHAT I'M WATCHING NEXT

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.

Foreign folks, welcome to today's daily read here on Exit Rich Retire Free with Jeff Kickel.

So let's get started.

For two weeks, one thing has bullied the market.

It's been rising interest rates every day.

The 10 year climbed and stocks fell into it.

This morning, the market is green and it's because the villain finally blinked.

Federal Reserve's favorite inflation gauge came in cooler than expected.

And for the first time in a while, yields ticked down.

Interestingly enough, if you look at the last four months since May, it's continually ticked down every single month.

So this morning, regime lab flipped back towards green.

The S and P and the NASDAQ are up and the AI trade is bouncing.

Nebius is up 4%.

Intel up 3.

Nvidia recovered from Tuesday and the fuel is coming.

This morning's data, the core PCE index, the inflation number the Fed watches most closely, rose just 3% over the past year, cooler than economists expected.

On that news, the 10 year treasury yield ticked down to 5.24%.

A small, a small move, but the first real relief after two weeks of relentless climbing.

And at the same time, the economy looks strong.

GDP is revised or was revised up and the private hiring beat expectations.

So cooler inflation and a solid economy.

On the surface that's a dream combo, right?

But here's the nuance worth understanding because it's the whole story.

You got three data points this morning and they don't all pull in the same way.

Cooler inflation is unambiguously good.

It's what takes pressure off the Fed and off yields.

And it's why stocks are up.

But the other two, GDP revised up 2.2% and private payrolls beating with 90,000 new jobs.

That's the ADP number.

Those show an economy that is running hot.

And a hot economy is a double edged sword.

It's great for company earnings, which is bullish, but it also gives the Fed every reason to stay tight.

Because if growth and hiring are strong, the Fed feels no pressure to ease.

So the honest read, isn't inflation cooled?

We're saying that, we're saying it's like this.

The market got its first genuine piece of good news on inflation.

The villain blinked.

But one cool report against a still hot economy and a yield still up at five and a quarter percent is a crack in the pressure, not the end of it.

So enjoy the relief, but read it right.

One cool inflation print is a real positive.

The first evidence the rate story might be topping.

But don't confuse a crack with a collapse in the 10 year that is still elevated.

The economy's still hot and the Fed hasn't signaled a thing.

A steady move is welcome news.

Notice that the leadership is back in the AI names and stay balanced.

Let the trend confirm before being or betting the rate villain is fan or is finished.

So a couple things to keep an eye on for this week.

Two big ones.

Micron reports after the close tonight.

Huge for the whole AI story.

With earnings expected to grow more than 900% from a year ago.

As a memory chip bellwether, its report can move the entire semiconductor group tomorrow and Friday brings the government's official September jobs report.

After today's strong private read, that's the next test of how hot this economy really is.

Cool inflation hot jobs.

Watch which one the the market decides matters more.

So that's your daily read.

After two weeks of rising rates running the show, the villain finally blinked.

Inflation cooled and yields eased.

A crack in the pressure, not an end to it.

I'm Jeff Kickle here with exit rich retire Free.

This of course is always education and not advice.

Thanks and we'll see you guys back here the next time.