"Who do people say the Son of Man is?" was Jesus's first question, no doubt with this verse in mind. Was it John the Baptist? Elijah? Jeremiah or some other prophet? No doubt this question was more than likely a hot topic among Rabbi's and Jews of the age.
"Who do you think the Son of Man is?" Jesus's second question should've logically followed from the first, but his actual question "Who do you say I am?" seems to both teach and inquire from Peter. A rhetorical question, however Peter's response seems to catch Jesus off his guard.
"You are the Christ, Son of the Living God." You might have expected Peter to say "You are the Son of Man." in typical Sunday School fashion where "Jesus" is the answer. Peter doesn't say Jesus is the Son of Man, but Jesus calls him blessed because God has revealed to Him this truth. Jesus is not only the Son of Man, but the Son of the Living God, a mysterious marriage of earthly and divine.