September’s producer price inflation significantly exceeded expectations, with annual PPI rising 6.3% against 5.3% forecast and monthly growth reaching 1.3% versus 0.5%. The upside surprise reinforces concerns that inflationary pressures remain persistent, prompting Citi to anticipate a December rate hike and UBS to project another in March. However, the Dow’s 1.1% gain alongside a 7-basis-point decline in the 10-year Treasury yield suggests markets may be weighing factors beyond inflation, including earnings optimism, positioning or expectations about future growth. The divergence could also reflect uncertainty over how sustained the inflation shock will be and whether tighter policy is fully priced in.