(These are the market notes on as we speak’s motion by Mike Santoli, CNBC’s Senior Markets Commentator. See as we speak’s video replace from Mike above.) The market took a better-than-feared CPI report as a signal that it is free to play looser and extra aggressively. Given the magnitude of the draw back shock in the Aug. 1 payroll report , CPI would have had to are available in piping sizzling to undermine the Street’s conviction that the window is vast open for the Fed to resume charge cuts in September. The modest upside to core CPI fell nicely wanting that threshold. The end result was a tension-release rally in a market that wasn’t all that clenched-up to start with. Rate-sensitive shares are flying as merchants execute the Fed-easing playbook – small-caps, transports, homebuilders, retailers. The First Trust Nasdaq Community Bank ETF (QABA) is up 3.9% on the day. Economists will, and may, level out that CPI inflation stays sticky and nicely above the Fed’s 2% goal, however markets, politics and Fed rhetoric are forcing a view that charges have room to fall to make them “less restrictive.” The market sees CPI as the final identified potential catalyst that might have really upended the bullish case till Labor Day, regardless that we’ll get retail gross sales, some client earnings and a variety of Fed rhetoric in coming weeks. The VIX dropping appreciably beneath 15 for the first time in six months exhibits this collective rest. Are we calling off the August hurricane watch? Treasury yield curve steepening a bit, longer-term yields holding up as short-term yields slip to value in considerably extra certainty about imminent charge cuts. The rally to new highs in the S & P 500 and Nasdaq got here after a pair weeks of inside consolidation when the majority of shares have been in pullback/digestion mode whereas the elite AI-propelled mega-cap tech names held the indexes aloft. Today was a bit extra of an inclusive push greater fairly than a rotation, Big Tech collaborating absolutely whereas cyclical stuff regained some pep. Around the edges, the frisky, gamy shares are effervescent up once more. AST SpaceMobile up 8.3% on a quarterly miss. The current IPO ETF (ticker FPX) was up 1.4% at a brand new excessive. The BUZZ meme-stock proxy forward by 1.8%. None of this quantities to broad, worrisome euphoria. The two-week rally pause allowed optimism to cool and, in accordance to Goldman Sachs institutional positioning stays close to impartial. Still, this meltup-type motion suggests risk-aversion is being penalized, the valuation-based margin of security is getting additional compressed and the anticipated charge reduce(s) may find yourself getting used recreationally fairly than medicinally to heal an ailing actual economic system. Or, maybe, it may do a few of each.