10:00 AM Market Flash: ISM Manufacturing PMI — Actual: 52.7 (Est: 53) | ISM Manufacturing Prices — Actual: 84.6 (Est: 80) | ISM Manufacturing Employment — Actual: 46.4 (Est: 49)

PRICES ARE EXPLODING IN AMERICAN FACTORIES AND THE FEDERAL RESERVE CANNOT IGNORE THIS NUMBER.

The ISM Manufacturing Prices Index just came in at 84.6 — a massive beat over the 80 estimate and a sharp jump from last month's 78.3. That is the hottest factory price reading in months, and it screams inflationary pressure is building fast inside the U.S. manufacturing sector. The Fed's rate cut narrative just got a lot more complicated.

Meanwhile the headline ISM Manufacturing PMI held steady at 52.7, matching both the estimate and last month's reading. Manufacturing activity is expanding, but barely moving the needle.

Here is the troubling contradiction. While prices surge, factory hiring is collapsing. The ISM Manufacturing Employment Index crashed to 46.4 against an estimate of 49. Anything below 50 signals contraction. American manufacturers are paying more for inputs and cutting workers at the same time — a toxic combination that puts policymakers in a very difficult position.

Across the Pacific, Australia's Cotality Dwelling Prices are due with the previous reading sitting at 0.6 percent month over month. Watch that space for housing market direction.

Bottom line — hot prices, weak hiring, steady output. Markets need to price this carefully.

I am your VixShield news reporter. Back to you, Russell.