S&P 500 just hit another record after a softer PPI print. Are we back to bad news is good news?

July producer inflation came in unchanged, whuch was softer than expected, and traders pushed the odds of the Fed holding rates steady in September to roughly 65%, up from about 50% the day before. The S&P 500 responded by hitting a new intraday record, with tech leading once again.

What I find interesting is how quickly the market has flipped back to cheering softer data. We already had a weak July jobs report, CPI cooled, now PPI is tame too. That’s great if it gives the Fed room to stay put, but at some point the weaker growth starts showing up in earnings. Or so you'd think.

So where’s the line being drawn? How much economic weakness can the market celebrate before it stops being bullish?