CPI data is out one ️⃣ Breaking down the four data points: Unseasonally adjusted CPI annual rate of 3.8% (expected 4.2%, previous value 4.2%) → significantly lower than expected, indicating a strong positive outlook on the surface. The seasonally adjusted CPI monthly rate is 0.6% (expected 0.5%, previous value 0.5%) → higher than expected, indicating that short-term inflation is still hot. The seasonally adjusted core CPI monthly rate is 0.4% (expected to be 0.3%, previously 0.2%) → This is the most troublesome figure tonight, as core inflation rebounds. The non seasonally adjusted core CPI annual rate is 2.8% (expected 2.9%, previous value 2.9%) → slightly lower than expected, and the long-term trend is still declining. → Four pieces of data, two good and two bad, but the two bad ones have a greater weight. two ️⃣ The annual rate is good, the monthly rate is bad. The annual rate of 3.8% is much lower than 4.2% → The general direction of inflation is indeed decreasing, and this is a fact. But the monthly rate of 0.6% and the core monthly rate of 0.4% are both higher than expected → Price pressure has risen again in the past month. The market focuses on marginal changes, not stock. Monthly rate rebound=Fed cannot immediately turn dovish. three ️⃣ The core CPI monthly rate of 0.4% is the most troublesome. The core CPI excludes energy and food, reflecting service inflation, wage stickiness, rent, and insurance. Jumping from 0.2% to 0.4% → indicates that the Fed's toughest bone is still hard. Expectations of interest rate cuts pushed back → Short term rebound in US bond yields → Pressure on growth stock valuations. four ️⃣ For the US stock market: not a crash data, but enough to wash the market once. The decrease in the core annual rate to 2.8% is a real development and does not support a comprehensive bearish view. The core monthly rate rebounded to 0.4%, which is enough for the market to take the opportunity to retrace and clear the leverage of AI/semiconductor. This is completely consistent with what we previously said: CPI is not a fundamental variable, but an emotional tool. The data is just enough to 'wash the market', not enough to 'crash'. One sentence: This CPI does not support an immediate bearish trend, but it is sufficient to create a correction. What really matters is the yield of US Treasury bonds and the acceptance of AI leaders.