Stocks soar after the cooler inflation report

• The bond market rallied, too. The yield on the 10-year Treasury note dropped more than 30 basis points to 3.81%, the biggest single-day drop since 2009.

Where it stands: Financial markets have endured a brutal sell-off in recent months. Even with Thursday's big gains, the S&P 500 is still down 17% so far this year.

• The selloff has been welcomed by the Fed. So-called tightening financial conditions is how the Fed slows demand. The opposite, loosening financial conditions, may put the Fed in a potentially tricky spot — particularly if it persists.
• The inflation report gives Fed policymakers cover to dial back rate hikes to a (still huge) half-point move. But chair Jerome Powell went to great lengths last week to signal to markets that slowing doesn't mean the central bank is backing down from its inflation fight.
• A parade of Fed officials welcomed Thursday's softer inflation reading, but warned the battle against inflation is far from over. Speaking at a conference in Houston, Dallas Fed president Lorie Logan said: "This morning's [Consumer Price Index] data were a welcome relief, but there is still a long way to go."

Go deeper: Inflation cools more than expected in October