TL;DR
Long the December hike is on notice while it stays alive: 62% odds hold the trade for now, but a clean break below 70% closes it.
Today was a narrow AI unwind, with tech alone draining 1.05pp from the index while staples rallied.
Duration is still my hedge, with 10Y at 5.12% rallying as equities sold; gold no longer does that job.
HY at 333bp is where I watch for the first real stress; IG at 87bp says nothing yet.
The oil premium is real with WTI near 99.26, but the strip is treating the AI scare as the bigger force.
Where We Stand
Yesterday I said I stay long the December hike near 78% priced, dead only below 70%. Today's close challenges that directly: the strip no longer fully prices a 25bp hike, with December sliding to roughly 62% odds as the AI scare took the front out of the money. I'm not reversing yet, but I'm putting the thesis on notice, because the move came from growth fear while the inflation print stayed firm. My oldest open view, that housing weakness doesn't dislodge the inflation narrative, is now the thing being tested by a different crack entirely. The duration hedge earned its place today, and the HY stress flag I raised is still live with the index at the wide end of its range.