Rate hike odds collapsed after Fed governor Chris Waller made a strong case against raising rates, which is good news for stock investors.

• Waller publicly attacked the idea of hiking, and market bets on a September hike fell from two-thirds likely to under half.
• His main argument: the Fed should follow real economic data, not stock prices, since using markets as a guide means tightening just because stocks fell.
• He also argued a growing economy does not have to mean higher prices, because supply can expand alongside demand, and rate hikes can't fix a temporary shortage anyway.
• Bond yields fell across the board even as oil prices rose, showing the move was about the Fed and not the Iran conflict.
• Software stocks bounced hard on the news, with Palantir, Tesla and Salesforce all up sharply.

Outlook: The inflation report next week is the next big test, and a hot number would flip the hike odds back fast.