• Lean hogs rallied significantly, gaining +10.94% (4.04σ) as supply concerns intensified. • Gasoline prices fell sharply by -6.20% (-2.91σ), driven by oversupply signals. • The Nasdaq Composite rose +1.36%, buoyed by tech giants like Alphabet, which surged +4.02%. **Recommendations** • Consider hedging against inflation — the high breakeven rates suggest persistent price pressures. • Look to position in energy equities — despite gasoline price drops, crude oil remains elevated, pointing to volatile demand-supply dynamics. • Engage in short-term plays on tech stocks — Alphabet's strong showing indicates ongoing investor interest as market sentiment leans risk-on. Today, markets exhibited a risk-on tone, underscored by positive performance in key U.S. equity indices, including the Nasdaq Composite, which rose +1.36%. Key headlines highlighted Alphabet's impressive gains (+4.02%), driven by interest in AI capabilities and cloud growth. This was followed by the broader tech sector’s fluctuations, notably with other giants like NVIDIA and Tesla also posting solid performances. On the flip side, gasoline prices fell significantly following reports of increased domestic supplies, sending ripples through the energy sector where heating oil and crude oil also declined. According to the economic calendar, today's key release of the Core PPI showed a modest increase of 0.1% against an expectation of 0.3%. This moderate performance aligns with the prevailing narrative of inflation persistence but also indicates that pressures might not be intensifying as expected — a nuance that the market digested cautiously. Concurrently, initial jobless claims remained stable at 200,000, indicating resilience in the labor market which supports growth prospects. Overall, this mixed data adds complexity for future Fed rate decisions. In the fixed income sphere, U.S. Treasury yields rose across the board, with the 5-year and 2-year yields leading with increases of +5 bps each. This aligns with a dovish macro outlook but reflects ongoing inflation concerns. The continued sell-off in longer duration bonds appears consistent with the overheating macro regime classification, in which robust growth persists despite rising inflation metrics. Nevertheless, short-term rates remain under pressure as market participants speculate on potential future hikes. Sector performance was mixed; while technology surged, the broader healthcare sector gained +1.69%, indicating defensive repositioning by investors. In contrast, the energy sector, despite strong fundamentals, saw some weakness, reflecting the divergence in expected energy prices. Lean hogs' massive gain further emphasizes supply concerns in the agricultural sector, signifying potential volatility as agricultural commodities face similar pressures. Today's liquidity regime signal indicates deterioration (-0.038 momentum, -0.125 acceleration), suggesting that investors may need to prepare for tightening conditions ahead. This environment raises the stakes for market moves, as persistent inflation contradicts the broader dovish Fed stance. Lastly, prediction markets reflect an increasing probability of sustained inflation, with a 75% probability pegged for Fed action at the upcoming June meeting. As we look ahead to the economic calendar, focus on the upcoming Core Retail Sales (forecasted at 0.7%) and Unemployment Claims (expected at 205K) this Thursday appears critical in shaping the trajectory of market expectations. As always, investors should remain vigilant towards the interplay of inflationary pressure and interest rate expectations moving forward. Overall, while sentiment today leaned optimistic, the interplay between inflation data, interest rate expectations, and market positioning suggests that caution is warranted amid rising economic complexities.