The U.S. economy just posted its strongest growth signal in 5 years, and stocks fell anyway. Rising business costs sent the 10-year Treasury yield to its highest level since 2007 and pushed October Fed hike odds to about 70%. Here's why good news became bad news, and why next week's inflation report could decide what happens next.

The August jobs report was a blowout: 162,000 jobs added against a 56,000 forecast, with unemployment steady at 4.1%. Stocks fell anyway. The reason isn't complicated once you see it — this report didn't change the economy, it changed the Fed's constraint. Here's the mechanism, why the 2-year Treasury moved before equities did, how oil at $91.48 opens a second inflation channel, and what Thursday's PPI and Friday's CPI will actually decide.