Feeling Dovish. Federal Reserve Chair Kevin Warsh may be taking a pared-back approach to official communications, but that's not stopping other Fed governors from saying their piece-and moving markets in the process.

That is exactly what happened today. Equities rallied behind Fed Governor Christopher Waller's prepared remarks at an event in Washington, D.C., which had a more dovish tone than Warsh's speech at Jackson Hole last week.

Waller said that while inflation is still "meaningfully" above the Fed's 2% target, he's seeing signs of cooling in recent data. That could push him to vote to keep rates steady at the Federal Open Market Committee meeting that takes place Sept. 15-16, reports my colleague, Megan Leonhardt.

Following his comments, the odds of a September rate hike fell to 50.5% on Thursday, from 63.2% on Wednesday, according to the CME FedWatch tool. Investors rallied behind the prospect of stable rates. The Nasdaq Composite rose 1.4% on Thursday. The S&P 500 gained 1.1%. The Dow Jones Industrial Average added 1.2%, or 623 points.

Of course, there's still a lot that could derail a Fed decision to hold rates steady. Waller himself noted that his vote hinges on the next spate of data, particularly August's inflation statistics, which will start to trickle in next week.

A soft report could "revive fears that labor conditions are not strong enough to handle higher interest rates," Megan writes, making a hike harder to justify.

But equities could very well rally behind a weaker jobs report-even if it means the economy is in a tight spot.

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The Hot Stock: Robinhood Markets +16.6% The Biggest Loser: Ciena -10.4%

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Trouble in the Water

The Iran war has taught the world a terrible lesson about the power of a single waterway. But a different maritime threat is emerging to menace the global economy. A powerful El Niño is already causing damage to oceans and rivers around the world, and it could have a huge impact on trade.

Today, the Panama Canal will begin cutting the number of vessels allowed to pass through from around 38 to 25 per day, due to low water levels. The Danube and Rhine rivers have also suffered major water problems this summer, forcing companies to come up with alternative strategies and even transport their goods via rail.

Other key shipping chokepoints, including the Caspian Sea, Mississippi River, and Amazon basin, could see El Niño-related water problems in coming months, causing delays and pushing up shipping costs. Global consumers will eventually shoulder that burden, as higher costs trickle into commodity pricing.

And there's another drought-related risk that markets likely haven't considered yet: more geopolitical conflicts. Violence related to water access increases during El Niño years, according to a recent paper published in the scientific journal PNAS.

I dive deeper into how drought is affecting global waterways in this week's issue of Barron's Global Signals newsletter. Read the full piece here.

The Calendar

The BLS releases the jobs report for August tomorrow. The consensus call is for a 65,000 increase in nonfarm payrolls, after a 23,000 decline in July. The unemployment rate is expected to tick up to 4.2% from July's 4.1%.

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