Frenemies: "China May Be Exporting Two Pandas, But It Would Much Rather Export Millions Of Cars"

By Molly Schwartz, cros-aset macro strategist at Rabobank 

Frenemies

The US-China summit officially began after Xi arrived in Washington, DC, late on Wednesday. Topics including trade, the Strait of Hormuz, and the AI (AGI?) races are expected to arise, but little tangible progress is anticipated.

After all that, Trump and Xi agreed to... rename AI to SI https://t.co/gLaNhLT18I pic.twitter.com/YZ9s2pvGBA

— zerohedge (@zerohedge) September 25, 2026

Instead, the goal is to “prevent something very bad from happening.” Frenemies, Xi and Trump, hailed “healthy competition,” rather than competition “in which one wins and one loses.” In a show of friendship (frenemyship?), China is sending two giant pandas, Ping Ping and Fu Shuang, to Zoo Atlanta. According to Politico, “one person close to the White House” said: “Trump likes to be like, ‘oh, we get along great,’ and it’s like, okay, well, at the same time, these guys are a massive threat to us. We’re in an AI race with them. They’re supplying Iranians with intelligence and weapons…He’s missing the message here. No one cares whether you’re friends with the guy or not… are you advancing [the US’] objectives or not?”

But a friendly veneer is unlikely to temper the tensions simmering below the surface. Although Trump and Xi may have a “personal rapport”, their respective objectives are diametrically opposed. China may be exporting two pandas, but it would much rather export tens of thousands of Chinese-made electric vehicles. For now, the US-China trade-war truce has been extended to January 10, 2027, but what follows remains unclear.

Moreover, the trade-war truce still accommodates a slew of US and Chinese trade barriers, including legacy Section 301 tariffs related to Chinese forced labour from 2018, new Section 301 tariffs, and broad-based Section 232 tariffs. Meanwhile, China continues to enforce its own 10% retaliatory tariff on US goods, alongside barriers affecting American agricultural products.

A similar pattern emerged in the AI discussion: both leaders again emphasized cooperation over confrontation, but few are convinced that either will slow the development of their respective AI capabilities.

The UN General Assembly is still under way in New York City. Some question the organization’s effectiveness in fulfilling its stated mission, which includes “saving succeeding generations from the scourge of war.” Scourge or not, brent has continued to surge, rising another $5 after gaining $5 the previous day, to close at $107/bbl.

After briefly diverging yesterday morning, with the 2-year yield edging lower and the 10-year yield creeping higher, both were again pulled into line with intraday moves in Brent crude. The 2-year yield has struggled to break above resistance at 4.90% but remains near Wednesday’s two-year high, while the 10-year yield continues to reach levels not seen since 2002, most recently at 5.16%. With Brent still climbing and little currently pushing back against inflation expectations, the OIS curve suggests investors are pricing a 68% probability of a hike at the October meeting and more than 93bp of tightening by October next year.

By extension, the USD is the best-performing G10 currency for a second consecutive day. The Brent crude à higher yields à stronger USD pipeline was in full swing, sending EUR/USD to 1.13—its lowest level since late July. The 14-day RSI suggests EUR/USD is somewhat oversold, and nearby support at 1.1325 indicates that a reversal may be imminent. Rabobank’s head of FX strategy, Jane Foley, recently revised her EUR/USD forecast and now expects the pair to trade sideways around 1.14 over a one-month horizon before retracing to 1.16–1.17. Read more here.

The Danish Defence Intelligence Service published a report yesterday stating that there is a “low but growing risk that Russia will launch a limited military attack against one or several NATO countries bordering Russia,” although it remains “highly unlikely that Russia will launch an invasion.” The report also highlights an intensification of Russian cyber and drone attacks, including “the foiled drone attack on Leipzig/Halle Airport, which…had been planned by Russia over a period of several months.” Meanwhile, reports indicate that an AI agent hacked into an Australian government health-data portal in June. As the AI race continues, the risk of hybrid warfare across both land and fibre-optic networks is growing rapidly.

Banxico held the overnight policy rate at 6.50% yesterday but adjusted its statement. Previously, the Bank had indicated that it was satisfied with the reference rate; however, the Fed’s decision to hike a few weeks ago has put Banxico in an uncomfortable position. Banxico has historically followed the Fed to some extent, and diverging policy paths could have significant consequences for USD/MXN, which is quickly approaching 17.8. The peso is particularly sensitive to interest-rate differentials because of its status as an attractive carry currency. Three-month USD/MXN implied volatility has risen from 9% to 10.3%, which is the highest level since April. Elevated volatility, combined with expectations of rapidly narrowing interest-rate differentials between Mexico and both the US and Japan, could point to USD/MXN moving above the 18-handle. However, Rabobank is currently maintaining its forecast of USD/MXN predominantly trading between 17 and 18. Read more here.

Tyler Durden Fri, 09/25/2026 - 10:40

UMich Consumer Confidence Slides In September As Republicans Lose Faith

After July's rebound to pre-war levels, a re-escalation in the MidEast (and soaring fuel costs) has sent confidence back towards YTD lows. Today's final September data was expected to show UMich headline sentiment sliding further (and inflation expectations re-accelerating).

And while sentiment is lower overall (month to month), it did actually pick up modestly intra-month from preliminary levels.

Consumer sentiment ticked down less than four index points in September, reaching the lowest reading in four months and back down notably from January 2026.

Views of current and year-ahead expected personal finances also both weakened notably this month, with concerns over high prices continuing to climb.

Year-ahead inflation expectations jumped from 4.0% last month to 4.6% this month, the highest reading since June. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations ticked up to 3.4%, ending three consecutive months at 3.3%. These expectations remain higher than their 2024 range of 2.8% to 3.2%.

Democrats are the most fearful of inflation once again...

Since the start of the year, consumer sentiment has declined for all groups by age, education, geography, political party and income, according to the report.

A gauge of the outlook for the economy in the year ahead slumped in September to the lowest since 2022. Consumers' expectations for their personal finances also deteriorated.

Buying conditions for durable goods improved slightly, but it was partly “due to a perception that completing such purchases now would help consumers avoid higher prices in the future,” Joanne Hsu, director of the survey, said in a statement.

Perhaps most ominously from the report is the finding that after particularly large declines in sentiment this month, Republican sentiment is now 20% lower than January 2026; Democrats are down 13% over the same period.

“Despite political differences, consumers unanimously believe that the outlook for the economy has diminished,’’ Hsu said.

Tyler Durden Fri, 09/25/2026 - 10:10

New York Audits Utility AI Use, Cites Risk In "Growing Dependency"

By Robert Walton of UtilityDive

The New York Public Service Commission last week launched an inquiry into public utility use of artificial intelligence, noting that AI systems “create risk for organizations” but are also increasingly used to perform basic tasks.

The Sept. 17 order requires electric, gas and water utilities to respond within 60 days with “a written inventory report that describes all use cases of AI systems in their operations.”

Consolidated Edison, which serves New York City, said it uses AI for a range of uses, including customer service and system inspections. “As technology evolves, we will continue to evaluate opportunities,” a spokesperson said in an email to Utility Dive.

Public utilities are increasingly using AI systems for day-to-day operations, and New York regulators are concerned they are “susceptible to hallucinations, algorithmic biases, transparency issues, data privacy concerns, misconfiguration errors, cybersecurity attacks, and functional brittleness.”

“These potential risks may have negative consequences for the safety and reliability of New York’s critical infrastructure,” they said.

The PSC’s order directs utilities to file “a complete inventory” of all AI use cases in their operations and “disclose their policies, procedures, and protocols” around the burgeoning technology. The commission said it will “evaluate those procedures and protocols for adequacy and robustness against commonly accepted AI Governance frameworks.”

The commission’s order defines an “AI system” as a machine-based system that “can, for a given set of human-defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments.”

New York utilities are already utilizing AI systems in various ways, including model outage predictions and electric usage. National Grid has deployed a system known as GridCARE to help free up interconnection capacity for large-load customers, regulators pointed out. The New York Power Authority has used AI to analyze drone-captured data for enhanced vegetation management.

Con Edison told Utility Dive the utility is using AI “to improve customer service, proactively identify potential equipment issues before they affect customers or public safety, and to strengthen our inspection and mapping capabilities.”

But more broadly, regulators noted “the actual extent and scope of AI systems in New York utility operations remains unclear.”

“The rapid evolution of AI is a double-edged sword for utilities,” PSC Chair Rory Christian said in a statement. “While AI can be a powerful tool that can result in cost efficiencies and improved operations, it also presents serious risks that must be evaluated and addressed appropriately.”

Tyler Durden Fri, 09/25/2026 - 09:55

Citizenship Is Not A Product: Rubio Hits Birth-Tourism Fixers After SCOTUS Blocked Broader Ban

The United States is no longer pretending that a tourist visa plus a delivery room equals a legitimate path to American citizenship.

On September 23, Secretary of State Marco Rubio announced a new visa-restriction policy under Section 212(a)(3)(C) of the Immigration and Nationality Act aimed at the people who actually run the business: owners and managers of commercial birth-tourism networks, visa "fixers" who coach applicants to lie, foreign medical providers who arrange the trips and allegedly tap Medicaid, and anyone else who knowingly enables the trade. Family members of those targets can be swept in as well.

In short, people selling packages to facilitate US entry are on notice (perhaps they should focus on EB-5s like the Kushners).These foreign commercial networks advertise U.S. citizenship as a package - collecting tens of thousands of dollars to coach clients on what to say at the consulate, book housing near hospitals, and deliver a passport-eligible infant. The State Department's position is that this is fraud against the immigration system, not "tourism."

With six weeks until midterms, Rubio's announcement follows of President Trump's August 6 Executive Order 14419, Ending Birth Tourism - aimed at those entering on a nonimmigrant visa for the purpose of giving birth on U.S. soil - or helping someone else do it - and directed State and Homeland Security to deny visas, revoke them, bar re-entry, and act against facilitators. Days after Trump's EO, a Birth Tourism Prevention Task Force was assembled. About a month ago, officials said more than 750 visas tied to suspected birth-tourism activity had been revoked, with more coming. Meanwhile, embassy investigations earlier in the year claimed to have dismantled networks in West Africa (100-plus cases with fraudulent documents and fixers), Europe (400-plus suspected cases since 2024 tied to at least six companies), and North Africa (100-plus visa revocations).

Here's How The Sausage Is Made

Pregnant women - disproportionately from China, Russia, Nigeria, Turkey, and a handful of other countries - fly in on B-1/B-2 visitor visas, stay in "maternity hotels" or rented houses, deliver, obtain a birth certificate and Social Security number, and leave. The child is treated as a U.S. citizen, and when 21 years later, that child can petition for parents. Neat trick.

It's not just the poors either - packages have been marketed for $20,000 to $100,000: housing, nannies, shopping trips, coaching on how to answer consular questions, and sometimes advice on how to keep hospital bills off the books or shift them onto public programs. In 2019, federal prosecutors in Southern California took down operations charging Chinese clients six figures. This month, Texas Attorney General Ken Paxton announced a Houston-area postpartum center had agreed to close after the state alleged it facilitated more than 1,000 births to Chinese nationals. Gov. Greg Abbott had already ordered state agencies to hunt licensed providers participating in the schemes. The 2020 Trump-era consular rule already advised officers they could deny visas if they believed the primary purpose of travel was to obtain citizenship for a child.

The H-1B pipeline is getting the same treatment: a wage-weighted lottery cut FY2027 registrations 38%, even as the courts have blocked Trump's $100,000 fee.

How Many Are We Talking About?

The conservative Center for Immigration Studies, using older Census-to-vital-records comparisons, has estimated 20,000 to 26,000 tourist births a year. CIS research director Steven Camarota told Congress this month that if those rates held, 200,000 to 300,000 children were born to birth tourists over the last decade. CDC data show fewer than 10,000 births in 2024 to mothers listing a foreign address - a figure almost everyone agrees undercounts women who use a U.S. hotel or rental as their "residence."

Globally - Jus soli in its American form is an outlier among developed states. Australia, New Zealand, the UK, Ireland, and much of Europe require a citizen or permanent-resident parent. The United States and Canada remain the G7 holdouts. A Conservative amendment to Bill C-3 that would have required at least one citizen or permanent-resident parent was voted down in October 2025; Canadian citizenship still attaches automatically to nearly anyone born on Canadian soil, diplomats excepted. The United States spent decades treating a plane ticket and a due date as sufficient allegiance.

Supreme Pivot

After the Supreme Court struck down Trump's broader day-one attempt to withhold birthright citizenship from children of illegal aliens and temporary visa holders, the White House went in a different direction - going after visa fraud, commercial facilitation, and the use of nonimmigrant categories for a permanent benefit.

Here's their angle:

1. Integrity of citizenship. A passport is not supposed to be a concierge product.
2. Taxpayers foot the bill for their medical care to a disputed extent.
3. Security and chain migration. A U.S.-citizen child creates a future immigrant-petition pipeline - with officials singling out China and Russia as high-volume sources. Whether one accepts the "hundreds of thousands" rhetoric from some administration figures or the lower CIS range, the screening problem is the same: the parent was never vetted as a future American.

So - in about three seconds, advocacy groups will call it racial profiling of Chinese and Russian applicants. Hospitals that marketed "birth packages" will lawyer up. Fixers will move advertising off open WeChat groups and into quieter channels, and pregnant women will keep trying to make it onto US soil. The order also contemplates denial of entry and removal for prior participants.

Legislation is already in the hopper - including a Ban Birth Tourism Act that would make seeking admission as a B visa holder for birth tourism an explicit ground of inadmissibility. The administration is not waiting for Congress.

American citizenship shouldn't have loopholes. 

* * *

Tyler Durden Fri, 09/25/2026 - 09:35

Yen Jumps As Japan PM Admits Weak Currency "Problematic"

President Trump reportedly expressed concern over the weakness of the yen when he met Japan’s prime minister this week as the currency came under more pressure against the dollar.

The FT reports that Finance Minister Satsuki Katayama Satsuki Katayama told reporters in Tokyo that Trump and Sanae Takaichi discussed the yen in talks in New York on Tuesday.

The US president “expressed his concern” while Takaichi told Trump that she saw an undervalued yen as “problematic”, Katayama said.

The yen jumped around 1% against the dollar following the remarks - its best day in two weeks...

The finance minister also said she would continue to coordinate with her US counterpart Scott Bessent, reinforcing the signal that both governments are paying close attention to the currency’s depreciation.

“In light of [the Trump-Takaichi] meeting, Treasury secretary Bessent and I will continue to communicate closely on a range of matters, including foreign exchange,” Katayama added.

Last week, the BoJ raised rates to the highest level in 31 years, but the move did little to structurally strengthen the yen, even as the central bank’s governor Kazuo Ueda hinted strongly that there could be further tightening this year.

Options sentiment toward the yen turned more bullish lately, reflecting increased hedging demand against the risk of Japanese intervention.

“Intervention risk should put a ceiling on further yen weakness,” said Moh Siong Sim, a strategist at Oversea-Chinese Banking Corp.

“More importantly, the yen may be nearing a turning point as Trump’s concerns over its weakness point to deeper US-Japan coordination to support the currency.”

Japan and the US carried out their first coordinated yen-buying intervention since 1998 this summer after the currency weakened beyond 160. Japan spent a record ¥15.4 trillion ($97.4 billion) intervening in the month through Aug. 26, according to Finance Ministry data.

“This is largely another way of jawboning in my view,” said Charu Chanana, chief investment strategist at Saxo Markets.

“Unless it is followed by actual policy coordination, intervention or a clearer BOJ tightening path, I don’t think it changes the underlying yen story materially”

Bessent has also continued to signal support for a stronger yen, potentially giving Japanese warnings greater weight with traders than in previous episodes of currency weakness.

Tyler Durden Fri, 09/25/2026 - 09:12

Ukraine Drone Strike Knocks Out Russia's Novoshakhtinsk Refinery

Authored by Tsvetana Paraskova via OilPrice.ocm,

Another Russian refinery was taken offline on Friday following a Ukrainian drone attack, in a sign that Ukraine and Russia continue to trade strikes on energy infrastructure despite separate talks with U.S. officials in New York aimed at de-escalation.

The Novoshakhtinsk refinery in the southern Russian region of Rostov was hit by drones and had to be taken offline, regional governor Yury Slyusar said in a post on Telegram early on Friday.

As a result of the drone attacks, the Novoshakhtinsk refinery, which has the capacity to process 110,000 barrels of crude oil per day, was damaged and halted operations, the official said.

25 September 2026: Reported Ukrainian strikes overnight hit at least five sites across Russia and occupied Ukraine:

• Novoshakhtinsk Oil Products Plant, near Novoshakhtinsk, Rostov Oblast
• NPP Zavod Iskra, Ulyanovsk, Ulyanovsk Oblast
• Lukoil-Permnefteorgsintez refinery,… pic.twitter.com/9E3lHv9MtV

— OSINT Intuit™ (@UKikaski) September 25, 2026

Ukraine continues its campaign to cripple Russian refining capacity, fuel supply, and export revenues. Due to the low refinery production, Russia has been forced to ban diesel exports for months and is likely to extend the ban beyond September 30. The ban was initially introduced in July as Ukraine has continuously taken Russian refineries offline.

Last week, Ukraine hit an oil refinery near Moscow, damaging a processing plant co-owned by Rosneft and Gazprom Neft.

Recent attacks from both sides show that there isn't any truce in attacking energy sites.

Ukraine's forces hit the refinery in Yaroslavl with drones last week, while Russia attacked infrastructure in Kyiv.

Russian daily Vedomosti reported last week that the government would extend its ban on diesel exports for all fuel producers to October 31, due to delayed refinery maintenance and the need to rebuild fuel reserves before winter.

Russia has been suffering from a gasoline and diesel crunch since the spring, when Ukraine intensified its drone attacks at Russian refineries, aiming to cripple fuel supply to the front lines and to the domestic Russian market.

The Russian ban on diesel exports has added to the Middle East crisis to tighten global middle distillate markets.

Tyler Durden Fri, 09/25/2026 - 09:01

AI Spend Lifts Core US Durable Goods Orders Rise For 17th Straight Month In August

With PMIs soaring to multi-year highs earlier in the week, US durable goods orders were expected to be mixed in preliminary August data.

And mixed it was (with plenty of revisions)... the headline print was unchanged MoM (better than the 0.3% MoM decline expected) with a small revision lower for July.

Boeing reported fewer orders in August compared with the prior month.

However, Ex-Transports disappointed, rising just 0.3% MoM (half the expected 0.6% MoM rise) with a revision higher for July. That leaves core orders up 11.1% YoY - the highest since Q2 2022.

But, that is still the 17th straight monthly rise in core durable goods orders...

Additionally, Capital Goods Orders (non-defense, Ex-Air) soared 1.6% MoM (more than double the 0.56% MoM expected)

Under the hood, the big driver appears to be AI Spend (rather unsurprisingly)...

This segment includes:

• Telephone Apparatus: Wired and wireless telephones, private branch exchange (PBX) equipment, and VoIP equipment.

• Broadcast and Wireless Equipment: Radio and television broadcast antennas, cellular tower electronics, and two-way radios.

• Network Equipment: Routers, switches, local area network (LAN) and wide area network (WAN) equipment, and fiber-optic transmission gear

Is it any wonder that Trump doesn't want a 'pause' on AI Spend.

Finally, shipments figures (which actually plug into GDP) were in line with expectations (with July revised up), suggesting resilience to Q3 forecasts.

Tyler Durden Fri, 09/25/2026 - 08:43

Futures Rise As Oil, Yields Drop On Iran Diplomacy Hopes

US futures erased earlier losses and are trading at session highs led by tech, as bonds steadied (with the 10Y at multi-decade highs of 5.17%) after oil’s latest rally lost steam, helping US stocks to extend gains for the week. As of 8:00am ET, S&P futures are up 0.4% setting up the benchmark to post its first weekly advance in three; Nasdaq futures gain 0.7% with chipmakers and memory storage names bouncing and Mag 7 stocks mostly higher, led by NVDA (+0.7%) and TSLA (+0.8%). Overnight, focus remains on the improved US-Iran rhetoric since noon yesterday: Iran proposed a 7-day plan to end the war (NYT), and the president says Tehran wants a deal with the US before the midterm elections (NBS). However, the reactions from the oil market were fairly modest, suggesting the market is still pricing a meaningful geopolitical premium; WTI fell 1.8% to $92.98. Bond yields fell 2-3bp at the front end; precious metals are higher, and ags are lower. US economic data slate includes August durable goods orders (8:30 a.m.), and the September University of Michigan sentiment (10 a.m.).

In premarket trading, Mag 7 stocks are mostly higher (Tesla (TSLA) +1.1%, Nvidia (NVDA) +0.7%, Amazon (AMZN) +0.6%, Alphabet (GOOGL) +0.4%, Apple (AAPL) +0.1%, Microsoft (MSFT) little changed, Meta Platforms (META) -0.5%).

• Akamai Technologies (AKAM) rallies 20% after the cloud provider inked a seven-year $11.6 billion deal to provide computing power to Anthropic.
• Atlas Energy (AESI) gains 6.9% after it announced a purchase agreement with Wyoming Machinery Company for $340.5 million of Balance of Plant equipment for a power generation project. The companies also separately agreed to a 328 megawatt power deal under an agreement with Caterpillar Inc.
• Comcast Corp. (CMCSA) is down 1.9% after KeyBanc Capital Markets cut its recommendation to underweight from sector weight on weakness in broadband.
• Nike Inc. (NKE) is down 2% after BofA cut its recommendation on the athletic footwear and apparel company to underperform from neutral, and pushes the expectation for a sales turnaround into F2028. Nike reports 1Q earnings on Oct. 1.
• People Inc. (PPLI) jumps 9.9% on a report that MGM Resorts is discussing making a bid to purchase the Barry Diller-owned media giant.
• Twilio Inc. (TWLO) is down 3.5% as HSBC downgrades the communications software company to reduce from hold, seeing “limited evidence that Twilio will capture higher-margin AI software” revenue.
• Zscaler (ZS) falls 3.4% after the security software company announced the appointment of Ross Tackett as chief revenue officer, effective Oct. 1.

In other corporate news Elon Musk said Colossus 2, an AI computing cluster built by his xAI business, may more than double its current Nvidia chip count by the end of the year. Shares of People Inc. rise 6.5% after the Wall Street Journal reports that MGM Resorts is discussing making a bid to purchase the Barry Diller-owned media giant. Temasek names BlackRock co-founder Susan Wagner to its board with effect from Oct. 1, according to a statement.

Fluctuations in oil prices are likely to remain a key driver for markets at a time when elevated energy costs are stoking inflationary pressures and underpinning the outlook for further monetary policy tightening. Swaps fully price three additional Federal Reserve quarter-point hikes over the next year, a prospect that could hold back risk appetite and keep bond yields high for some time.

“We are in a one-factor world over the coming days, with oil prices driving rates and rates driving all asset classes,” wrote Mohit Kumar at Jefferies. “Equity markets have behaved relatively well despite the rise in rates. Optimism over AI and demand for AI infrastructure has helped.”

Longer-dated bond yields continue to reflect fiscal concerns and the likelihood of strong government borrowing, said Francisco Simon at Santander Asset Management. While the prospect of restored crude flows from the Middle East will ease pressure on rates, a run of strong economic data suggests the global economy can withstand tighter financial conditions, he said.

“Market direction will likely be determined by whether easing geopolitical tensions can outweigh the ongoing message from the macro data,” Simon said. “Growth remains resilient, and that is keeping upward pressure on yields despite some relief on the energy front.”

Trump’s reception for China’s Xi has been heavy on pageantry and platitudes but light on substantive announcements, with the events shadowed by the US president’s preoccupation with construction projects and personal grievances. This is how Goldman wrapped up the pageantry:

• Trade truce extended for 2 months mentioned by Bessent. Xinhua news mentioned Xi said both sides agreed on a new joint arrangement on trade.
• Xinhua news mentioned Xi hope US to insist "oppose Taiwan independence" stance, and deal with Taiwan issue with prudence. (note current official US stance is "do not support Taiwan independence" instead of "oppose")
• On AI, Xi mentioned US and China should not set up defences against each other, and should have dialogue, prevent AI being abused and ensure human control of AI.
• Chinese news mentioned Xi supports US and Iran to return to MOU and maintain talks.
• Both leaders support APEC (Nov in Shenzhen) and G20 (Dec in Miami) meetings, indicating Xi and Trump may meet two more times this year.
   
• One-Liner: So far nothing major market moving. We wait for official statement/readout. Still, the important area to watch is related to Iran (and any efforts from China to mediate talks

Elsewhere, AI is back in focus as the selloff in bond markets eases. A Goldman Sachs study (available to pro subscribers) estimates about $1 trillion in end user spending is needed to drive solid returns for hyperscalers — a hefty but “achievable” target.  Goldman strategist Ryan Hammond notes that AI applications will need to generate more than $1 trillion in revenues based on a 30% Ebit margin and a 10%-20% return on invested capital for the hyperscalers. This compares with roughly $1.5 trillion in global software spending in 2026, Hammond writes. 

Market performance reflects some of that optimism. Meta is on the cusp of joining an elite group of companies worth at least $2 trillion after shares surged 36% so far in September. The Nasdaq 100 is outperforming the equal-weighted S&P 500 and small-cap Russell 2000 by more than 7 percentage points this month. Meanwhile, rate-sensitive financials are being punished, with banks hitting a technical correction in Thursday’s cash trading. The durability of that bifurcation likely depends on where long-end yields next settle. 

The final reading of a University of Michigan’s survey due later today is likely to show consumer sentiment deteriorated in September due to higher prices at the pump, according to Bloomberg Economics.

“The economic data calendar will be quite dull until the ISM on Thursday and the labor data on Friday next week,” said Roberto Scholtes, head of strategy at Singular Bank. “Everything will continue to revolve around energy prices, bond yields and AI-related news.”

Europe's Stoxx 600 is up by 0.9%, headed for its biggest weekly gain since August, with semiconductor equipment maker ASML the biggest contributor to the gain. Here are the biggest movers Friday:

• UBS shares advance as much as 3.3% after a report said the Swiss lender is weighing options including potential deals with banks in other jurisdictions
• Glencore gains as much as 3.3% as UBS upgrades the miner to buy from neutral, with an improving risk/reward due to stronger outlook for thermal and metallurgical coal
• Outokumpu rises as much as 6.5% as BofA Global Research reinstates coverage with a recommendation of buy, saying European Union trade protection policies are offsetting weak demand in the steel sector. Peers Aperam and Acerinox also rise as BofA reinstates at neutral
• Alten shares rise as much as 8.8% after the French IT group reported first half-year operating which CIC CIB called ‘impressive,” saying the company is back on a “more positive trajectory”
• KPN gains as much as 2.9% after JPMorgan upgraded the company to overweight, saying shares offer an attractive entry point as revenue trends improve into 2027 and the “weak narrative” of 2026 fades
• HelloFresh shares fall as much as 15% to a record low after the German food delivery firm lowered its full-year sales growth and earnings targets
• Sinch declines as much as 5.3%, slipping from the highest close since January 2023, as DNB Carnegie downgrades the cloud communications group to hold as its required second-half acceleration is now partly priced in

Asian stocks are set to snap a two-day losing streak as oil slid on news that the US and Iran are exploring a phased deal that would see Tehran reopen the Strait of Hormuz, easing inflationary pressures. The MSCI Asia Pacific Index gained 0.7%, with Japanese stocks leading gains. Financials led Japan’s advance, supported by the prospect of higher interest rates. Meanwhile, Hong-Kong shares fell with a more pronounced drop in tech stocks, as traders were disappointed by a lack of progress in Trump-Xi talks. Alibaba and Tencent were among the biggest laggards. China, Taiwan and South Korea were shut today. Markets have had a relatively muted reaction to the Trump-Xi summit currently, after China’s president encouraged Trump to publicly oppose Taiwan independence. 

In FX, the yen headed for its biggest daily gain in more than two weeks after Japanese Prime Minister Sanae Takaichi said she told President Trump that an undervalued yen is problematic. This follows Finance Minister Katayama revealing that Trump expressed concerns over the weakness of the currency. The Bloomberg Dollar Spot Index is down 0.2%.

In rates, treasury yields are falling across the curve, with 10-year yields down by four basis points. There are similar moves in Europe and the UK, with investors trimming their rate-hike bets for the Fed, the ECB and the BOE. Treasuries hold curve-steepening gains in early US session with front-end 3yields around 5bp lower on the day, supported by lower oil prices after report that US and Iranian negotiators explored a phased deal that would see Tehran reopen the Strait of Hormuz. Friday’s session includes durable goods orders data and at least two Fed speakers. With longer-term US yields only 1bp-3bp lower on the day 2s10s and 5s30s curves are steeper by about 1.5bp and about 3bp respectively; 10-year is about 4bp lower near 5.17% with UK counterpart keeping pace and Germany’s lagging by about 3bp. IG dollar issuance slate empty so far, after just one deal was priced on Thursday leaving the week around $5 billion short of dealers’ $40 billion average expectation.

In commodities, WTI crude oil futures under $93 are down 2.3% near session lows with Brent crude futures down 1.2% near $106 after rising more than 7% over the previous two days. Gold prices are fluctuating around $4,300/oz. Bitcoin is a touch stronger, nudging above $84,000.

US economic data slate includes August durable goods orders (8:30 a.m.), September University of Michigan sentiment (10 a.m.) and Kansas City Fed services activity (11 a.m.) Fed speaker slate includes Kansas City’s Schmid (9:20 a.m.) and Cleveland’s Hammack (2 p.m.)

Market Snapshot

Top Overnight News

• Trump hosted Xi Jinping at a state dinner attended by Elon Musk, Jensen Huang and Tim Cook, but progress on tariffs and AI deals remains elusive. The leaders meet for tea this morning. BBG
• Iran’s foreign minister said Thursday that Tehran had proposed to Washington a seven-day plan to cease hostilities, reopen the Strait of Hormuz and then begin comprehensive talks on his country’s nuclear program. NYT
• Efforts to rekindle talks to end the war between the U.S. and Iran are running into resistance from major Persian Gulf oil producers that have swung against any accommodation of Tehran, people familiar with the matter said. WSJ
• Saudi, Turkish and Pakistani military chiefs are to meet to discuss how to support Saudi Arabia under a joint defence pact, after Saudi's top religious authority told troops to be ready to lay down their lives to fight Yemen's Iran-aligned Houthis. RTRS
• US Energy Secretary Chris Wright has contacted executives at several major American refiners in recent days to gauge support for a voluntary restriction on diesel exports as the Trump administration searches for an alternative to a short-term ban, according to three people familiar with the discussions. RTRS
• The Fed is working on a plan to raise the asset thresholds that trigger stricter oversight of big banks to account for inflation and economic growth. The changes may spur mid-size bank consolidation. BBG
• The yen hit a session high after Prime Minister Sanae Takaichi said an undervalued Japanese currency was “problematic.” The yen strengthened as much as 0.8% to 157.67 per dollar on Friday, heading for its biggest daily gain in more than two weeks. Officials have emphasized the speed and disorderliness of currency moves rather than any specific exchange-rate level, with market participants viewing the area around 160 as where intervention risk rises. BBG
• The BOJ gauge of underlying inflation accelerated to well above the target last month, supporting the case for continuing to raise the benchmark rate as authorities warn of the risk of inflation overshooting. BBG
• The State Department wants to give state and local officials, and possibly some nonprofit organizations, access to passport records to verify voters’ citizenship. BBG
• Anthropic strikes USD 12bln deal with Akami (AKAM) for AI computing.

Iran War

• Iran Foreign Minister Araghchi said Iran presented a proposal to US through mediators this week to reopen the Strait of Hormuz and restart negotiations towards a final deal, while it called for US to meet certain conditions within 7 days, according to CNN.
• Iranian President Pezeshkian said in Fox News interview that Iran does not want a nuclear bomb. They reached an agreement with the US President that was signed, and are still ready to move forward based on the same principles, adds it wasn't Iran that closed the Strait of Hormuz and it was open. They didn't seek war and that it was imposed on them, while they don't seek war but will defend themselves. They didn't start the war but will respond decisively.
• Iranian President Pezeshkian said Iran is ready for an agreement with the US and makes demands only within the framework of international law and could give up highly enriched uranium if it reaches an agreement with the US, according to TASS.
• Iran's President Pezeshkian said Tehran wants to revive its ceasefire memorandum of understanding with the US before the November midterm elections, saying Iran does not want talks delayed until after the vote. said:. Iran is open to inspections of its nuclear facilities and denies that Tehran is seeking to assassinate President Trump or his family.
• Iran's Foreign Minister Araghchi said the Strait of Hormuz can reopen if certain conditions are met by the US and that it would be better to implement before the Midterms, according to a Sky reporter.
• IRGC spokesperson warned in the event of another attack, Iran's method of defence will change including geography of the confrontation, the type of equipment and weapons used, and targets in defensive operations in line with new conditions.
  Iranian Brigadier General Sheikh said "we seek to expand our capabilities and reconsider our tactics and technologies", via Al Mayadeen.
• Sources say a return to the June 18 memorandum of understanding between Iran and the US is no longer sought by either side, with both seeking amendments to some clauses, further complicating negotiations, Al-Akhbar reported.
• Pakistan's Defence Minister said intensive efforts are underway to establish a mechanism for ending the conflict as quickly as possible and reopening the Strait of Hormuz, according to Tasnim.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were ultimately mixed following the inconclusive handover from the US, where the major indices finished flat after the bond rout deepened, while conditions were thinned in the region owing to the holiday closures in South Korea, Taiwan and Mainland China. ASX 200 was led lower by underperformance in tech and with nearly all sectors in the red aside from financials and consumer staples, while price action was not helped by the lack of catalysts and data releases. Nikkei 225 extended on recent momentum and rose above 66,000, while the index was unfazed and Japanese banks were underpinned by a higher yield environment, which saw the 30yr yield at its highest since its debut in 1999. Hang Seng suffered despite the pleasantries at the Trump-Xi summit and state dinner, as the meeting of the leaders failed to result in any major breakthroughs, while there were losses in nearly all but a handful of the Hong Kong benchmark's constituents and the Stock Connect was shut due to the closure in the mainland for the Mid-Autumn Festival.

Top Asian News

• Japanese Finance Minister Katayama said specific monetary policy tools are up to BoJ to decide and that the central bank will conduct appropriate monetary policy while coordinating with government, adds Trump voiced concerns about yen weakness at summit. said:. Won't comment on specific FX levels or rate checks. Japan will closely coordinate with US on foreign exchange. PM Takaichi expressed concern about the yen’s weakness in general.
• Japanese Economic Minister Kiuchi said not in era to do monetary easing, adds phase of monetary easing and agile fiscal spending ended.
• Chinese VP Han said China willing to work with Serbia to lift bilateral ties to higher levels, according to Xinhua.
• Trump and Xi confirmed that they would support each other in hosting the APEC Economic Leaders' meeting and the G20 summit in 2026, Xinhua reported; new trade arrangements between China and US is good news for the global economy.

European bourses (STOXX 600 +0.8%) are entirely in the green. The IBEX 35 (+1.2%) outperforms this morning, joined closely by the DAX 40 (+1%). The bullish bias seen this morning is facilitated by increased hopes of the reopening of the Strait of Hormuz. This comes after the Iranian President said that Iran presented a proposal to the US through mediators this week to reopen the Strait of Hormuz and restart negotiations towards a final deal. Whilst nothing is concrete at this stage, the path to diplomacy appears to be opening. European sectors hold a strong positive bias, with cyclical industries holding towards the top of the pile. Basic Resources tops the sectoral list, joined closely by Banks and Travel & Leisure. The latter benefits from lower oil prices and the general risk tone. Unsurprisingly, Energy resides at the foot of the pile. Food Beverage and Tobacco is the other sector in the red.
Key movers: UBS (+3%, reportedly considering a merger with a foreign company as it looks to move out of Switzerland), Airbus (-1.8%, identified a corrosion protection defect affecting more than 500 A321neos), Leonardo (U/C, reportedly involved in the Airbus defect).

Top European News

• European Loans to Households (Aug YY) 3.1% vs. Exp. 3.2% (Prev. 3.1%).
• European M3 Money Supply (Aug YY) 3.5% vs. Exp. 3.5% (Prev. 3.4%).
• European Loans to Companies (Aug YY) 4.2% (Prev. 4.4%).
• Spanish GDP Growth Rate Final (Q2 QQ) 0.7% vs. Exp. 0.7% (Prev. 0.6%).
• Spanish GDP Growth Rate Final (Q2 YY) 2.6% vs. Exp. 2.7% (Prev. 2.7%).
• French Non Farm Payrolls (Q2 QQ) -0.1% (Prev. 0%).
• French Private Non Farm Payrolls Final (Q2 QQ) -0.1% vs. Exp. -0.1% (Prev. -0.1%).
• German GfK Consumer Confidence (Oct) -30.6 vs. Exp. -27.4 (Prev. -26.8).
• UK GfK Consumer Confidence (Sep) -13 vs. Exp. -16 (Prev. -14).

FX

• DXY is modestly softer amid lower oil prices and after the Yen-led move weighed on the index (see below), although the Buck remains underpinned by this week's rise US yields and expectations for further Fed tightening, with DXY posting four consecutive sessions of gains this week thus far. DXY currently resides in a 101.11-101.30 at the time of writing,
• JPY is the clear G10 outperformer, with USD/JPY sliding ~30-40 pips on several separate occasions overnight and this morning, price action that can also be seen across other JPY crosses. The move comes after comments from Japanese Finance Minister Katayama, who stated that US President Trump voiced concerns about yen weakness, while she reiterated Japan will closely coordinate with the US on foreign exchange.
• EUR/USD is modestly firmer, with much of the upside stemming from the JPY-induced pressure on DXY rather than any fresh bloc-specific catalyst. The pair remains tucked within yesterday's 1.1359-1.1399 range, with today's parameter between 1.1368-1.1390.
• GBP/USD is modestly firmer but remains well below 1.3300 following this week's Sterling weakness. UK-specific catalysts are light, leaving broader USD dynamics to dictate price action. Cable currently resides in a 1.3209-1.3241 range.
• Antipodeans are modestly firmer intraday with fresh domestic catalysts are limited, with moves largely reflecting the broader easing in the Dollar, whilst mainland Chinese participants were away overnight. AUD/NZD is modestly firmer but off highs in a 1.2375-1.2409 range.
• Goldman Sachs lowers USD/JPY 3-month forecast to 158.00 from 162.00, 6-month forecast to 155.00 from 163.00 and 12-month forecast to 150.00 from 165.00.

Fixed Income

• A modestly bullish start to the final session of the week for fixed, led by downside in the energy space after the overnight Strait of Hormuz related commentary. Since then, updates have been relatively light and thus the rebound in benchmarks has been modest.
• As it stands, USTs are set to end the week with downside of nearly a full point, but some 10 ticks off the WTD 104-14+ low. In brief, the week was characterised by further yield upside given geopolitical and, pertinently, diesel updates. The 30yr hit a 5.50% peak, firmer by 20bps on the week at that point, while around 5bps off highs as it stands, the move remains significant and resilient.
• Further out, the general desk view is that the move has further to run given the US economic backdrop, continued Middle East uncertainty and associated supply disruption (and elevated shipping costs, added to by record low Rhine levels), potential US diesel measures, AI spend and a credibly hawkish Fed. Factors which are all indicative of further yield upside.
• Gilts are firmer by c. 30 ticks but just off best levels. Providing some relative respite to UK yields, but nonetheless the 10yr is 6bps firmer at 5.34% WTD and over 25bps MTD, despite the BoE holding the Bank Rate at 3.75% in September.
• Finally, EGBs follow suit to the above. Bunds are firmer by around 25 ticks, just off a 119.95 peak. Specifics for the space light. Focus remains on the above points, and also the wholesale changes set to impact the ECB over the next few months, as Schnabel leaves post-December, Lagarde potentially early-2027 and Lane in May 2027.
• Japan sold JPY 649bln in 10yr, 20yr and 30yr JGBs in enhanced liquidity auction; b/c 2.95 vs. Prev. 3.20. Highest accepted spread +0.032% vs. Prev. -0.011%. Allotment of bids at highest spread 80.1862% vs. Prev. 58.2741%.
• Australia sold AUD 1bln 2.5% May 2030 bonds; average yield 5.0368% and bid/cover 4.34×.

Commodities

• WTI Nov and Brent Dec futures are softer on the session, with the complex pressured by growing diplomatic hopes around US-Iran negotiations and Hormuz. The US and Iran reportedly discussed a phased deal to reopen the Strait and end the US blockade, while Iranian Foreign Minister Araghchi said Tehran submitted a proposal through mediators to reopen Hormuz and restart negotiations towards a final deal. However, Al-Akhbar subsequently reported that neither side is seeking a return to the June 18 MoU and both want amendments to some clauses, potentially adding delays. Focus also remains on US diesel policy after Energy Secretary Wright reportedly contacted major refiners to gauge support for voluntarily restricting diesel exports. WTI trades off worst levels and within a USD 92.14-94.75/bbl range, while Brent trades around USD 99.00/bbl within a USD 97.81-99.76/bbl range.
• Dutch TTF is softer alongside the broader pullback in the energy complex, with tentative progress on US-Iran diplomacy helping remove some of the geopolitical risk premium.
• Precious metals are mixed but ultimately contained, with the USD strength this week and the rise global yields continuing to act as headwinds. Spot gold has recovered off worst intraday levels and trades in a USD 4,255-4,296/oz range. Spot silver remains softer around USD 63.72/oz within a narrow USD 63.36-64.08/oz range. Base metals are subdued amid the absence of mainland Chinese participants overnight, with 3M LME copper within a USD 14,615.68-14,701.97/t range at the time of writing.
• EU Commission said that gas supply remains stable; to reconvene on October 8.

Trade/Tariffs

• EU urges the UK to increase tariffs on Chinese cars to avoid ‘made in Europe’ barriers, according to FT.
• Chinese President Xi said China and US made common understanding on many issues and that he had frank and in-depth exchange with US President Trump.
• US President Trump said in state dinner for Chinese President Xi that US and China have never gotten along better, adds can continue prosperous and secure future with China.
• US President Trump posted on Truth Social that the state dinner at the White House for Chinese President Xi Jinping will be spectacular.

Geopolitics: 

• Ukraine President Zelenskiy said that the US proposed a "technical meeting" with Ukraine and Russia in UAE; waiting on the date.
• Russia's defense ministry said it bombed a drone assembly site in the Kyiv region.
• Explosion heard near Ukraine's capital of Kyiv after a Russian drone attack.
• US envoys Witkoff and Kushner met with Russia's Dmitriev today, according to CNN.
• Chinese President Xi said North Korea, Middle East and Ukraine was discussed with US President Trump, while Xi and Trump agreed to build a stable China-US relationship.
• Russian and Iranian Foreign Ministers say there is no alternative to a diplomatic solution to the war in Iran, Al Arabiya reported.
• Yemeni Houthi official warns the coming period will be more painful for Saudi Arabia if its actions against Yemen continue, ISNA reported.
• Israel's channel 12 noted that the army will enter a new phase of fighting in southern Lebanon in the coming days. said:. Army has completed operation to destroy Hezbollah's infrastructure in the Yellow Line area.
• Israeli military will enter a new phase of fighting in southern Lebanon in the coming days, Israeli Channel 12 reported cited by Sky News Arabia. The army completed the process of destroying Hezbollah’s infrastructure in the Yellow Line area.
• Strait of Hormuz's commodity vessel crossings dropped to single digits, according to preliminary ship tracking data.
• Saudi Foreign Ministry said Saudi Arabia, Turkey and Pakistan will hold urgent chiefs of staff meetings to discuss support for Riyadh under the joint defence pact.
• Saudi Arabia's civil defence issues emergency warning for the Jazan province, but announces the danger has passed shortly after.

US Event Calendar

• 8:30 am: United States Aug P Durable Goods Orders, est. -0.3%, prior 1.1%
• 8:30 am: United States Aug P Durables Ex Transportation, est. 0.6%, prior 0.4%
• 10:00 am: United States Sep F U. of Mich. Sentiment, est. 47.5, prior 47.8

Central Banks

• 5:15 am: United States Fed’s Williams Participates in Policy Panel
• 9:20 am: United States Fed’s Schmid Participates In Fireside Chat
• 2:00 pm: United States Fed’s Hammack Participates In Policy Panel Discussion

DB's Jim Reid concludes the overnight wrap

I'm pleased to announce that I've just played a very small part in what will become a new Guinness World Record, pending official verification. Yesterday, Deutsche Bank colleagues from around the world set out to walk or run the equivalent of the Earth's circumference — roughly 56 million steps in just 24 hours. In the end, nearly 30,000 of us across 50 countries channelled our inner Forrest Gump and racked up 275 million steps, covering around 138,000 miles. So we got 60% of the way to the moon.

While we were all walking, markets have had another rough 24 hours, as a fresh jump in oil and gas seemed to send bond yields in another tailspin. Brent crude rose +3.41% to $106.60/bbl, even if it did pare back some of its gain after Reuters reported that the US and Iran were exploring a phased deal to reopen the Strait of Hormuz and end the blockade. But this was not sufficient to stem the ongoing rout in bond markets, with the sell-off extending late in the US session and leaving 10yr Treasury yields (+8.5bps) at a new post-2007 high of 5.20%. Meanwhile the S&P 500 recovered from around half a percent down before the headlines to -0.02% at the close.  

One important theme at the moment is that Treasuries continue to sell-off with oil but that breakevens aren't moving, with pretty much all the move being driven by real yields. This is something I discussed in my CoTD yesterday (link here), and yesterday the trend continued with 10yr US real yields rising +9.8bps to a post-2008 high of 2.87% but 10yr breakevens actually falling by -1.3bps. The former has now risen +97bps in 2026 and the latter only +9bps. So at face value there is no concern about longer-term inflation even though oil is up around 75% so far in 2026. In addition measures of term premium have been range bound for around 18 months so the sell-off isn't really fiscal related. Overall it feels to me that breakevens are too low and that real yields might be getting too high.

By the close, the 10yr Treasury yield (+8.5bps) rose to a post-2007 high of 5.20%, whilst the 30yr yield (+7.7bps) jumped to its highest since 2004, at 5.48%. Coupled with Wednesday’s slump, this marked the biggest 2-day rise (+23.7bps) in the 10yr yield since the post-Liberation Day turmoil last spring. And with the 3yr yield (+3.5bps) closing at 5.01%, that left the 2yr (+2.8bp to 4.93%) as the only coupon-paying Treasury tenor still below the 5% yield level. Yields have pulled back a bit overnight though, with the 10yr trading -1.43bps lower.

Over in Europe, the rise in yields was slightly less pronounced but there was another set of multi-year highs as well, with the 10yr bund (+4.5bps) at a post-2009 high of 3.60%, whilst the 10yr OAT (+3.3bps) hit a post-2008 high of 4.69%. So lots of milestones being reached all round.

That rise in yields came as oil prices continued to march higher. The initial driver were escalatory comments from Iran, which played into investor concerns about an extended conflict. For instance, Iran’s Fars reported an adviser to the Supreme Leader, who said that the war may “widen further and extend to the Indian Ocean or elsewhere”. So that pushed back on the optimism from earlier in the week, when there had been speculation about some kind of diplomatic breakthrough around the UN General Assembly. Meanwhile, Saudi Arabia faced an attack from the Houthis again yesterday, with a Saudi-backed coalition intercepting six ballistic missiles.

After hitting an intra-day high of $108.16/bbl Brent crude did see a mostly temporary drop of around $4 just after Europe closed as Reuters reported that the US and Iran are exploring a phased deal to reopen the Strait of Hormuz. We've been here many times before but the article made the valid point that it’s not just the US that has an incentive to get a deal done before midterms. The consensus seems to feel that Iran is happy to make life uncomfortable for the US ahead of the vote. However after the midterms the incentive for Trump to provide concessions probably goes down so the coming weeks might represent Iran's best chance of a stronger deal. But at this point this is still wishful thinking. Last night, we also heard the FT report that Iran offered the US a new “7-day” ceasefire proposal to reopen the Strait of Homruz and restart broader talks, but that this proposal was still built around the June MoU which the US has been reluctant to return to as it pushes for a more comprehensive agreement.  All that left Brent closing at $106.60/bbl (+3.41%), before declining by -0.91% this morning so far.

As all that was going on, there was also a sharp rise in US natural gas futures yesterday, after TC Energy Corp’s Columbia Gas Transmission pipeline system said that there was a need for “an immediate pressure reduction” on a pipeline, due to “an unexpected mechanical issue”. So US natural gas futures jumped up +9.06% on the day, their biggest daily jump since January, which only served to exacerbate the inflationary concerns.

On top of the energy moves, another factor lifting bond yields yesterday was the ongoing resilience in the economic data. For instance, yesterday saw the US weekly initial jobless claims come in at just 197k in the week ending September 19 (vs. 200k expected). That’s one of the timeliest indicators we get on the state of the labour market, and it also pushed the 4-week moving average (which Fed Chair Warsh has previously cited) down to 202.25k. So that played into the current narrative that the US economy is growing strongly, which in turn would give the Fed the space to keep hiking rates. Meanwhile, the number of new home sales also hit an 8-month high in August, up to an annualised rate of 684k (vs. 616k expected). And this wasn’t confined to the US either, as the Ifo’s business climate indicator from Germany also surprised on the upside at 89.9 in September (vs. 89.0 expected). In fact, that was the highest since 2023, and the current assessment also hit its highest since 2023 as well, at 89.5.

This backdrop led to another round of pressure on risk assets. In the US, equities did recover most of their decline following the Reuters story, but the S&P 500 (-0.02%) did still just about retreat for a third consecutive session. And the breadth of the moves was clearly negative, with almost two thirds of the S&P 500 lower on the day, led by declines for utilities (-1.02%) and materials (-1.01%).  However, an advance for the Mag-7 (+0.74%) limited the aggregate decline. Meanwhile Europe saw more consistent declines, as the STOXX 600 (-0.55%) fell back, alongside declines for the DAX (-0.57%) and the CAC 40 (-0.52%). And credit sold off on both sides of the Atlantic, with US IG (+1bps) and HY (+8bps) seeing a little less widening than European IG (+2bps) and HY (+10bps).

Asian equities are heavily affected by holiday-thinned trading, with markets in China and South Korea closed. Japan's Nikkei is trading 1.24% higher, while Australia's S&P/ASX 200 is down 0.53%. US equity futures are down less than a tenth but European equivalents are back up +0.63% as I type and responding to the late rally back in the US after their close.

Looking at the day ahead now, and US data releases include preliminary durable goods orders for August, and the University of Michigan’s final consumer sentiment index for September. Then in the Euro Area, we’ll get the M3 money supply data for August. Otherwise, central banks speakers include the Fed’s Williams, Schmid and Hammack, the ECB’s Vujcic, and BoE Governor Bailey.

 

Tyler Durden Fri, 09/25/2026 - 08:37

Xi Presses Trump For Taiwan Policy Shift As $14 Billion Weapons Deal Hangs In Limbo

Following our earlier coverage of Barclays senior China economist Yingke Zhou's view that Chinese leader Xi Jinping's state visit delivered "more signaling, less substance," attention turns to Taiwan, where Xi pressed President Donald Trump to oppose Taiwan independence.

According to China's official Xinhua News Agency, Xi urged Trump to "adhere to the correct position of opposing Taiwan independence." The conversation took place at Thursday's White House summit.

For years, Washington has held the stance that it "doesn't support" the independence of Taiwan, the island Xi and his Communist Party claim as their own.

"While this may appear a semantic shift, the impact would be meaningful," said Bloomberg Economics' Jennifer Welch, who served as director for China and Taiwan on the National Security Council under the previous Biden and Trump administrations.

Welch pointed out that Beijing would use any switch in language from Trump to undermine Taiwan's confidence in US support. She added, "Opposing Taiwan independence implies an active effort to contain what Beijing sees as pro-independence forces."

This push by Xi to Trump comes as he heads toward an expected fourth term in office next year; he's ramping up diplomatic pressure to isolate the island, home to the world's most advanced semiconductor production, and block future weapons sales by the Trump administration.

For many months, Trump has delayed the $14 billion weapons package for Taiwan, which may come in the weeks or months ahead now that Xi's state dinner at the White House is over. It appears that Taipei is seeing its defense needs becoming leverage in the US-China trade spat.

In a preview of what next year might hold, China deployed a record 244 coast guard, research, and other government vessels around Taiwan this summer in what could only be viewed as a dry run for a blockade.

Beijing has warned that mishandling the Taiwan issue could lead to "clashes" between the superpowers - certainly a flashpoint. 

"The key acid test will be what Trump says on Taiwan," said Ryan Hass, director of the China Center at the Brookings Institution, who Bloomberg quoted. "Not just what Xi urges Trump to endorse."

Meanwhile, Reuters cited Taiwan's foreign ministry as saying that Xi's remarks represent "the consistent Chinese approach of distorting facts and unilaterally conveying its position and claims."

"Taiwan's sovereignty belongs to all the people of Taiwan. The Chinese Communist Party has no right to represent the Taiwanese people, and Taiwan's future can only be determined by the Taiwanese people through democratic means," the ministry added.

There were no immediate signals that the Trump administration would agree to Xi's request, a shift in wording that could carry significant implications for Washington's stance on Taiwan.

Jeremy Chan, senior analyst on China for the US-based political risk consultancy Eurasia Group, told Reuters, "It would ​erode a lot of the...strategic ambiguity of whether the US would come to Taiwan's aid in that context." 

Tyler Durden Fri, 09/25/2026 - 08:20

Coast Guard Intercepts Alleged Smuggling Vessel With 13 Chinese Nationals

Authored by Jack Phillips via The Epoch Times,

Federal officials on Monday said the Coast Guard and Customs and Border Protection (CBP) intercepted an alleged smuggling vessel with nearly two-dozen people on board, including 13 Chinese nationals, near Florida's coast.

Last week, the Coast Guard and CBP detected "a surface target of interest" near Angelfish Creek, Florida, according to a Border Patrol news release. When they intercepted the vessel, they discovered it was a 27-foot-long cabin vessel before it was interdicted.

They found that one suspected human smuggler, a Cuban national, and 22 illegal immigrants of various nationalities were on board. That included 13 Chinese nationals, eight Ecuadorian nationals, and one from the Dominican Republican, officials said.

The people who were apprehended were transferred to Coast Guard cutter ship Pablo Valent for more processing, while the 27-foot long vessel was seized by federal authorities, the release said.

Lt. Corryn Ulrich, commanding officer of the Pablo Valent, said that the apprehensions show that the Coast Guard is "ready to save lives and enforce federal law at sea."

"Attempting to enter the United States illegally by sea is extremely dangerous and will not go undetected," a CBP regional director, Andres Blanco, said in a statement. "This interdiction demonstrates the strength of our maritime partnerships and our commitment to stopping human smuggling organizations before they can put more lives at risk. Those who attempt these dangerous voyages face arrest, prosecution, removal, and the very real possibility of losing their lives at sea."

The interdiction was carried out under the Coast Guard's Operation Vigilant Sentry, which is designed to stop illegal immigration into the United States from sea.

Photos of the arrest were published by an official Coast Guard X account earlier this week, showing a Coast Guard ship approaching the alleged smuggling vessel as well as the individuals who were on board.

Coast Guard officials this week said they discovered and interdicted a 30-foot-long vessel around a mile east of Ocean Reef, Florida, on Sept. 15.

On the vessel, Coast Guard boat crew members found 23 people before they transferred 20 of them to the Bahamas for processing. The other three were taken into Homeland Security Investigations custody, the Coast Guard said.

The Trump administration has made border security alongside mass deportations of illegal immigrants a priority. Since January 2025, President Donald Trump has issued a number of executive orders to stop border crossings.

The Department of Homeland Security, which oversees both the Coast Guard and CBP, reported 16 straight months of releasing no illegal immigrants into the United States at the U.S. - Mexico border, according to a statement published last week.

Tyler Durden Thu, 09/24/2026 - 17:40

Appeals Court Upholds Hawaii's Rules For Gun Buyers

Authored by Michael Clements via The Epoch Times,

Hawaii's rules for gun buyers were upheld by a federal appeals court Tuesday in a ruling that reversed a lower court's injunction.

Palm trees frame the Hawaii State Capitol in Honolulu on April 23, 2025. Mengshin LinAP Photo

The U.S. Ninth Circuit Court of Appeals reversed a U.S. District Court for the District of Hawaii by a vote of 6 to 5.

In Todd Yukutake and David Kikukawa v. Anne Lopez and the City and County of Honolulu, the court found that the law imposing a list of rules on gun buyers is constitutional under the June 2022 U.S. Supreme Court decision in New York State Rifle and Pistol Association v. Bruen.

Writing for the majority of the Ninth Circuit's en banc panel, Judge John B. Owens stated that a footnote in the Bruen decision holds that objective, "shall-issue" licensing standards comply with the Second Amendment.

A "shall-issue" standard means the state must grant a permit to a qualified applicant.

The dissenting judges say this is a misapplication of the Bruen standard.

The law in question requires a state-issued license to purchase a handgun. The licensing process requires applicants to submit fingerprints, a mental health check and their Social Security number. It also sets a 30-day limit for purchasing the gun once the license is issued. If the licensee fails to meet that deadline, the process must be restarted.

Once the firearm purchase is complete, the new gun owner is required to provide information about the gun to the police department. Under some circumstances the gun must be inspected by the police.

Under Bruen, a gun law is constitutional if it fits the plain text of the Second Amendment and has a historical analogue from the time of the Second Amendment's ratification.

The majority wrote that footnote nine of the Bruen decision allows requiring a license to carry a handgun in public for protection as long as the licensing requirements are based on objective standards.

Owens wrote that the plaintiffs failed to show that the law effectively denied them their Second Amendment rights or impeded their ability to acquire firearms. He stated that, according to footnote nine, "non-abusive, shall-issue laws comport with the Second Amendment."

Joining Owens in reversing the injunction were Chief Judge Mary H. Murguia and judges Kim McLane Wardlaw, Jacqueline H. Nguyen, Gabriel P. Sanchez, and Holly A. Thomas.

Judge Ryan Nelson joined Judges Daniel Bress, Lawrence VanDyke, Bridget Bade, and Danielle J. Forrest in dissenting in part.

The dissenters wrote that footnote nine does not apply since it covers the carrying of a firearm and not the acquisition of one. They also noted that the state did not identify a historical analog for the licensing requirement.

The lawsuit was filed on Oct. 21, 2021, by the Honolulu County residents. The pair said the licensing process was an unconstitutional infringement on their Second Amendment rights. In August 2021 the U.S. District Court for the District of Hawaii found in their favor.

Gun rights activists say this is not the end of the case. Brandon Combs, president of the Firearms Policy Council, called the decision a "roadmap for abusing gun owners."

Alan Gottlieb, executive vice president of the Second Amendment Foundation, vowed to continue the legal fight.

"This case will be headed to the Supreme Court and I believe that the 9th Circuit Court of Appeals will be overturned," Gottlieb stated in an email to The Epoch Times.

* * *

Tyler Durden Thu, 09/24/2026 - 17:00

Regulators Find Their Situational Awareness: Fed, BoE Probe Bank Exposure To Jane Street After AI Fund Meltdown

Better late than never...

Nearly two months after Leopold Aschenbrenner's Situational Awareness went from a $45 billion AI juggernaut to a Citadel block trade after it dumped its entire public book on Ken Griffen's doorstep at a 10% discount and six weeks after we learned that Jane Street lost $15 billion in July, its first down month in a decade, central bankers on both sides of the Atlantic have noticed that something may have happened.

According to the FT, the Bank of England's Prudential Regulation Authority and the Federal Reserve have "stepped up scrutiny" of banks' exposure to large trading firms and market makers. They are asking global lenders how much they have lent to Jane Street and Ken Griffin's Citadel Securities, and presumably also to such HFT money makers as Susquehanna and Hudson River Trading.

Regulators want to know three things: the firms' risk appetite, how banks' exposure to them "evolved during the day," and how risk controls held up. That's a polite way of asking whether anyone at the prime brokers was actually watching intraday margin as the AI trade fell apart in July.

While the PRA, the Fed and Jane Street all declined to comment, Jane's silence is the least surprising. Its last public word on the subject came from partner Turner Batty, who told investors, in the understatement of the year, that "July was a bad month."

A brief history of a very bad month

For anyone who missed it (i.e., all the regulators), here's the recap.

Situational Awareness is the fund Aschenbrenner, a former OpenAI researcher, launched in 2024 under the name of his viral essay. It had eight employees and ran long AI infrastructure / short software, with about 4x leverage through Goldman total return swaps. We described that leverage as "batshit insane", but it was also extremely profitable, if only to Goldman. In a separate piece, the FT today reported that Goldman earned more than $200 million in fees this year from lending to Situational Awareness, the most of any client in its prime brokerage business financing hedge funds. 

As long as the market was going, up it was a party: the extremely levered momentum-chasing fund was was up 439% net through June, reached $45 billion in AUM, and counted Jane Street among its investors.

Then July happened. AI stocks rolled over, software rallied, and both legs of the pair trade lost money at once. Nebius, Sandisk and SharonAI each fell roughly half, and SK Hynix dropped nearly 50%. As the margin calls came in, the fund went looking for fresh capital. It failed to find willing "widows and orphans" and so within days it had exited all of its public equity trades. Citadel bought the whole book in under 24 hours at about a 10% discount, beating Millennium and, fittingly, Jane Street. The fund ended the month down about 78%, with roughly $10 billion of private holdings left, including a large stake in Anthropic.

Griffin did well out of it. Citadel's Wellington fund rose 5.94% in July, its best month since 2022, and about half of its year-to-date gains came from the Situational Awareness trade. Over the next three weeks, Citadel flipped more than 80% of Leopold's portfolio to dumb money through roughly 100 block trades worth more than $4 billion. When Griffin later described the unwind, he thanked "the trading and prime brokerage teams at the banks serving both firms" for their "extraordinary cooperation."

Regulators are now asking those same prime brokerage teams some questions of their own.

Jane Street was the collateral damage: on top of its direct stake in Situational Awareness, its own book, which tends to, cough, be just ahead of whale and retail orders, leaned into the same momentum names: Sandisk, Micron, CoreWeave, Broadcom, SMCI, Dell and Bloom Energy, all the names that defined the momentum trade trough July. And when the AI trade reversed, it lost $15 billion in a month. Most firms wouldn't survive a hit like that. At Jane Street it barely dented the year: by early August the firm had generated $40 billion in net trading revenue, already more than its record $39.6 billion for all of 2025.

That is also what worries regulators. As the FT puts it, the size of the loss "indicated that Jane Street... appeared to take far more risk than a typical market maker."

The "market maker" that isn't one

This is the real story, and it has been building for 15 years. After 2008, Dodd-Frank and Volcker pushed banks out of proprietary trading. The risk didn't disappear. It moved across the street to a new class of firms that started out collecting pennies as market makers and grew into some of the largest directional risk-takers in the world. Many readers will recall our early days which were defined as a crusade against HFT shops such as Jane Street, Citadel, Jump trading and others, whose business practices were best described as frontrunning providing liquidity. Of course, they had money and we didn't, so that particular crusade ended up going nowhere.

Jane Street now holds equity stakes in companies, including Anthropic, and invests in hedge funds like Situational Awareness. Because these firms trade only their founders' and employees' money, they have no outside LPs to answer to. They can "take risks without answering to external investors," which works fine until the leverage comes from banks that do answer to regulators.

So the banks that were told to stop running prop books now finance the firms that do. As a result, prime brokerage has become one of Wall Street's biggest profit engines: banks finance equity trades, lend against bonds, and execute and clear derivatives for these clients. If a client defaults, the bank takes the loss... within limits of course - if the loss is too big, taxpayers end up eating it.

Put another way, the Volcker Rule didn't take risk out of the system. It moved the risk one step further from its supervisors, and the banks collect a financing fee on it.

What regulators can actually do

If supervisors decide banks are too exposed to certain firms, their main tool is to make them hold more high-quality liquid assets against those exposures. That would cost the banks real money, which makes it about the only thing prime brokerage desks would take seriously.

To be fair, the PRA wasn't entirely asleep. In its April business plan, three months before the blowup, it warned that while many firms had improved end-of-day monitoring, "rising intraday exposures - particularly for firms providing market access, clearing, and financing to electronic market-makers - continues to pose potential risks."

It was the right warning, but it came roughly $50 billion in losses early and a few months short of any action.

The BoE is also looking at the rapid growth of London prime brokers financing Asian equities this year, after AI names like SK Hynix went vertical. That raises the obvious question: if one eight-person fund with 4x leverage could produce a $35 billion drawdown and a $15 billion hit at the world's most profitable trading firm, how many other levered AI books are sitting on prime brokerage balance sheets, a question we have been asking repeatedly in recent months.

Situational Awareness #1

Next? https://t.co/wU7ogIUysJ

— zerohedge (@zerohedge) July 30, 2026

We know of at least one. While the Fed and BoE send out questionnaires, Situational Awareness is already putting on the same trades that blew it up the first time: AMD, Intel, SK Hynix and Sandisk. It dropped the Goldman total return swaps and now gets its leverage from out-of-the-money flex options through Clear Street. Nomura flagged a "mystery buyer" that spent $315 million in premium, equal to $1.1 billion of delta, on concentrated tech calls. Aschenbrenner told investors the fund had taken "the steps that were necessary to fight another day." Evidently that day came quickly.

The bottom line

Nobody expects Jane Street to go under. A firm that makes $40 billion in seven months can absorb a bad July, and it just sold $14.6 billion in bonds to PIMCO, Capital Group and Fidelity. The problem isn't Jane Street specifically. It's that the firms running the most concentrated, levered bets on the market's most crowded theme are now systemically important and lightly supervised, and they are financed by the banks regulators are supposed to protect.

Archegos was supposed to teach this lesson in 2021. Five years later, with AI in place of ViacomCBS, regulators are learning it again.

For more background, see our earlier pieces: "A Lack Of Situational Awareness", "Situational Unawareness" and "Little To No Situational Awareness… With ZERO Risk Management".

Tyler Durden Thu, 09/24/2026 - 16:40

Tech Giant Feared Its AI Tools Started A Commercial 'Doom Loop,' New Documents Reveal

Authored by Stacy Robinson via The Epoch Times,

AI executives allegedly knew their products could unlawfully harm businesses, flood the market with inferior work, and damage human society's creative capacity as a whole, according to communications newly revealed in a lawsuit.

Those internal documents were cited in a lawsuit brought by The New York Times, Mother Jones, and other news outlets alleging OpenAI and Microsoft's AI tools stole their work, and are harming their bottom lines.

"Millions of people around the world will soon consider large models 'hoovering up' all their work to be an astonishing theft of unprecedented proportions," one Microsoft document said, according to a legal filing first reported by Mother Jones on Sept. 22.

The 'Doom Loop'

One Microsoft document also allegedly indicated that the company was aware that the AI model outputs would result in fewer clicks on websites - including its own. Fewer clicks means less money, which disincentivizes creativity and leads to less, and maybe lower-quality, work.

"Our AI content strategy has started a 'doom loop' that will hurt the performance of our models and the entire web at the same time," the document said.

In evaluating the suits, courts will look at how the new material produced by AI models affects the source material's moneymaking capabilities.

According to the filing, Nick Turley, OpenAI's head of ChatGPT, wrote that the company's AI products pose an "existential threat" to publishers, "are largely substitutive, period" and "will get more and more substitutive as they get better."

Those statements kill the AI companies' "fair use" claim, attorneys for the news publishers wrote in their filing.

"The AI-generated outputs provide substitutive answers that reduce the need for users to visit Plaintiffs' websites and flood the market with low-quality material that undermines the business model of news publishers," the complaint reads.

One employee told OpenAI cofounder Greg Brockman that he'd developed "a hack" to get around The New York Times' paywall, allowing ChatGPT to scrape up more stories.

"Ah, nice," Brockman allegedly responded.

After the companies filed suit, the lawsuit says, OpenAI also developed a filter to stop ChatGPT from outputting from sources involved in the litigation.

"OpenAI did not suppress the output of content from any entity that had not sued it," the lawsuit alleges. The filter was created "not to prevent OpenAI's models from infringing copyrights, but to stop Plaintiffs from gathering evidence of OpenAI's copying for use in litigation."

An executive at Microsoft, the lawsuit claims, worried that might be an "accidental cover up" that would result in "people who have a right over the content having less visibility into what was used for training."

Lawsuit

The publisher's cases have been consolidated into one federal multidistrict litigation in the Southern District of New York. The newspapers have filed for summary judgment, asking the sitting judge to decide the case without a trial.

This lawsuit is one of many that have cropped up in recent years, as AI companies have sought to train their models by feeding them existing texts and images from copyrighted sources.

In these lawsuits, the AI firms have defended themselves by citing the Fair Use doctrine under Section 107 of the federal Copyright Act.

That portion of the law gives an exception when copyrighted material is used under certain circumstances, such as teaching or criticism. Courts have ruled that it applies when the copyrighted material is used in a "transformative" way, and the end product is vastly different than the original.

The AI firms have argued that the model has simply substituted its own product for the source material on which it was based.

In July, a federal judge approved a historic $1.5 billion settlement between Anthropic and a group of plaintiff authors who alleged the company used pirated copies of their work - illegally downloaded from the internet - to train its model, Claude.

In the Anthropic case, the judge said using the books to train AI models was fair use; the violation was in using the pirated copies.

The AI companies' statements come amid an ever-increasing scrutiny of machine learning, and its possible impacts on humanity.

After a group of more than 700 OpenAI agents went rogue and hacked startup AI company Hugging Face, industry leaders publicly called for a pause in the development of new machine learning technology.

AI leaders have since called for a slowdown in AI development, citing the technology's potential to harm humanity. The calls have been met with skepticism from Trump administration officials, who argue the United States needs to lead the AI race with China to ensure national security.

Tyler Durden Thu, 09/24/2026 - 16:20

Woman Faces Federal Charges After Threatening To Kill Austin Metcalf's Father

The Karmelo Anthony story never seems to end, and perhaps that's a testament to the era we live in.  It seems as though every prominent trial with any media attention is automatically politicized - From the Lindsay Clancy circus to the Luigi Mangionne case to Anthony stabbing Austin Metcalf, the political left has been particularly invasive.  Not only do they consistently take the side of the murderers, but they continue in their efforts to blame and terrorize the victims.

Such is the ongoing reality of the Metcalf family, who are now faced with an array of threats from online lunatics and race militants looking for "payback" after the conviction of their hero, Karmelo Anthony.  

A Missouri woman is currently facing federal charges for threatening to kill Austin Metcalf's father (Jeff Metcalf) and "put him in a body bag" because of Anthony's prison sentence.  Court documents show Sharifa Nicole Henderson, who is also known as Riffa Henderson, was arrested on September 11 and indicted on three federal counts over messages she allegedly sent "on or about June 9" - which was the day Anthony was convicted and sentenced to 35 years behind bars. 

  

In one message she allegedly wrote:

"Don't worry. I'll kill you next...I will hunt you forever until I kill you ... I will be there. You will always have to look over your fucking shoulder."

In another post, she reportedly threatened to "demolish" the Metcalf family.  U.S. Attorney Jay R. Combs said investigators traced the messages through phone and social media records.

"The stability of our society rests in part on the proper functioning of our system," Combs said. "If you threaten to kill or harm jurors, judges, prosecutors or victims, we will treat those threats seriously."

Henderson could get a maximum of 5 years in prison for each charge if convicted.  But why does the political left engage in trial tampering and intimidation?  Because the leftist philosophy relies on an inversion of the moral order and power is their only value. 

In the case of Karmelo Anthony, the murderer is a young black man and the victim is a young white man, therefore Anthony must be protected as a symbol of the tearing down (the murder) of the western moral order.  If Austin Metcalf had been black, leftists and black activists never would have cared.  They would have ignored the case entirely. 

Anthony was convicted in June after his representatives attempted to try the case in the court of public opinion.  Numerous false claims were made in order to paint Austin Metcalf as the aggressor (very similar to activist efforts to make Lindsay Clancy into a victim and paint her husband as the "real killer"). 

The bottom line?  Anthony was a psychopath looking for trouble.  He had a history of violent and bizarre behavior and text messages from before the event show that he fantasized about murder.  He walked into the team tent of Austin Metcalf armed with a knife like a coward and hoping someone would ask him to leave.

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Tyler Durden Thu, 09/24/2026 - 15:45

DOJ Alleges UC Medical School Discriminates In Race-Based Admissions

Authored by Naveen Athrappully via The Epoch Times,

A Department of Justice (DOJ) investigation into the University of California-San Francisco's (UCSF's) medical school has determined that the institution discriminates on a racial basis during its admission process.

Signage on the exterior of a building at the UCSF Mission Bay campus in San Francisco on Feb. 10, 2025. Justin Sullivan/Getty Images

The investigation looked at whether admission policies of the UCSF School of Medicine complied with Title VI of the Civil Rights Act, and the university was deemed to have "illegally discriminated on the basis of race in its medical school admissions processes for the incoming classes of 2023, 2024, and 2025 and in its operation of diversity pipeline programs," the DOJ said in a Sept. 22 letter sent to the university chancellor.

"UCSF Med openly admits that its goal is to increase enrollment from specific racial groups it designates as underrepresented minorities in medicine (URM), which excludes all white students and most Asian students," the DOJ said.

Title VI prohibits programs and activities receiving federal funding assistance from discriminating on the basis of race, color, or national origin. The investigation specifically looked at whether UCSF Med complied with Title VI as interpreted by the Supreme Court's decision in the Students for Fair Admissions (SFFA) v. Harvard case. In the SFFA case, the Supreme Court struck down the use of racially discriminatory admissions policies at U.S. colleges in June 2023, thereby ending so-called affirmative action in higher education institutions.

The letter cited a student-selection admissions policy of the UCSF Med to ensure that the student population "reflect the population of California." According to the DOJ, this was despite the Supreme Court's ruling in the SFFA case that "outright racial balancing" was "patently unconstitutional."

Meanwhile, the university said that it would engage with the DOJ and looked forward to resolving the matter.

"UC San Francisco disagrees with the Department of Justice's finding regarding the School of Medicine's admissions process," the university said.

Every application to medical school is evaluated "through a rigorous, individualized review process that prioritizes academic excellence," according to the university.

Favoring Certain Applicants

According to the DOJ, the UCSF Med's Admissions Committee invites Hispanic and black applicants for interviews at "far higher rates" than Asian and white applicants, despite the black and Hispanic individuals having lower mean MCAT scores and undergraduate GPAs.

Post interviews, the committee decides on which applicants to admit. Between 2023 and 2025, these decisions "heavily favored" Hispanic and black individuals over their white and Asian counterparts, according to the letter.

During this period, the school accepted 1.5 to 1.7 percent of white applicants and 1.98 to 2.55 percent of Asian applicants, which are lower rates than the 4.83 to 6.69 percent for Hispanic applicants and 6.96 to 11.43 percent for black applicants, the DOJ said.

UCSF Med also featured diversity programs that involved scholarships, stipends, assistance with college admissions, and research opportunities, which preferred certain student populations, the DOJ said in the letter.

One such program, the university's Programs in Medical Education (PRIME) initiative, seeks to increase medical student enrollment. In a February 2025 report on the PRIME program, the university said that "increasing the racial and ethnic diversity" of the health workforce was one of the ways to improve health outcomes and attain "health equity."

In a Sept. 22 statement, the DOJ said that UCSF Med was 12.6 times more likely to admit black students and 4.6 times more likely to admit Hispanic students, even when their socioeconomic traits, MCAT scores, and GPAs were the same as white students.

"Unfortunately, at UCSF Medical School, MCAT scores and undergrad GPAs have taken a backseat to race," Assistant Attorney General Harmeet K. Dhillon of the Justice Department's Civil Rights Division said in the statement.

"Aspiring doctors should be admitted based on their qualifications. The Supreme Court has spoken clearly - federally funded medical schools may not admit students based on misguided and illegal notions of diversity."

The Epoch Times reached out to UCSF for comment but did not receive a response by publication time.

Reuters contributed to this report.

Tyler Durden Thu, 09/24/2026 - 15:25

Iran Willing To Strike Deal With US Before Midterm Elections: Pezeshkian Summary

• US-Iran talks uncertain: as Iran has stuck by its conditions while engaging Kushner-Witkoff in NY at UN.

• Iran threatens escalation beyond Persian Gulf: Tehran warned the conflict could spread to the Indian Ocean if attacked again.

• Yemen front intensifies: Saudi Arabia said it intercepted six Houthi ballistic missiles.

• Oil markets react: Renewed tensions pushed Brent crude to $106/barrel, undermining hopes for a quick deal.

//--> //--> US announces end of Iranian blockade by October 15, 2026?
Yes 23% · No 80%
View full market & trade on Polymarket

*  *  *

Tehran Willing to Strike Deal Before Midterm Elections

President Trump has on multiple occasions indicated his belief that Iran will hold off making a deal to end the war until after the US midterm elections in November. In somewhat surprising statements which contradict this, Iran's President Masoud Pezeshkian has just told American media that Tehran is willing to strike an agreement before the midterms. Per the Thursday afternoon NBC report:

“We don’t want it to get to the midterm elections,” Pezeshkian said Thursday in a brief meeting with NBC News and other news organizations on the sidelines of the United Nations General Assembly.

“We wish Americans to return to the MOU before the midterms,” Pezeshkian added, referring to a memorandum of understanding between the U.S. and Iran that laid out plans for a temporary ceasefire. The agreement, signed in June, eventually collapsed.

Is this one big effort to troll Trump? Via Newsquawk:

Refutation of Reuters claim; There is no negotiation, Defapress_ir reports, citing earlier comments from Mohammad Ghaderi.

Meanwhile, even if an Iran deal is stuck soon - and this is a big if at this point, there remains the Yemen conflict: Yemen’s Houthis say they attacked Saudi Aramco facilities in Yanbu; attacked what they called a “sensitive target” in Saudi capital Riyadh, it's being reported.

More from Thursday media interviews with the Iranian president:

• Iran's president says the deal Trump signed in June is still on the table and Tehran wants it. "We did reach an agreement with Trump. That agreement was signed, and based on that, we are willing and still wish to move forward, and the framework was agreed upon. We had not closed the Strait of Hormuz. It was open. Without any legal justification or framework, they attacked us."
• Iranian President Pezeshkian says Iran is ready for an agreement with the US and makes demands only within the framework of international law and could give up highly enriched uranium if it reaches an agreement with the US, according to TASS

Denial of Deal Optimism Headlines

Iranian journalist and analyst Mohammad Ghaderi, who often accurately presents Tehran's point of view or reaction to fast-paced events, has slammed the earlier Reuters report as 'false'.

That prior report said that the "US and Iran reportedly discuss phased deal to reopen Hormuz and end US blockade, according to Reuters citing sources." But the reaction from Tehran is below:

The Reuters report is false and its goal is to control the price of oil. no negotiations are underway. #Iran's position remains unchanged: the U.S. must fulfill the stipulated conditions in a single step so that the Strait of #Hormuz can be opened under Iranian control. Period.

— Mohammad Ghaderi | محمد قادری (@ghaderi62) September 24, 2026

Additionally this is via Israel's i24: "A senior Israeli official says "The chance of an agreement between the US and Iran is 'small' - but not impossible'."

Reuters Headline Signals [Dubious] Return to 'Deal in Motion'

Crude tumbles on a new Reuters report signaling a return to [dubious?] 'deal in motion' headlines: US and Iran reportedly discuss phased deal to reopen Hormuz and end US blockade, according to Reuters citing sources

This seems just a reiteration of Iranian demands, but crude still reacted (per Rtrs):

• A senior Iranian official said the most plausible way to end the impasse would be a phased arrangement, with Iran allowing navigation through Hormuz in return for the US lifting its economic blockade and Tehran potentially gaining access to frozen assets.
• Neither side wants to surrender leverage driving diplomacy
• Iran signals flexibility on fees, not on Strait of Hormuz
• Gulf states reject Iranian control of the strait

 

Iran Threatens to Spread War to Indian Ocean

It was just this month which saw the Iran conflict spill over into a renewed fight between the Saudi coalition and Yemen's Houthi rebels. Now Iran is threatening to expand the fight further, even into the Indian Ocean.

Yahya Rahim Safavi, an adviser to Iran’s Supreme Leader Mojtaba Khamenei, warned Thursday of another significant expanse of the war if the Islamic Republic suffers attack again.

"Since the conflict has spread from the Persian Gulf and Strait of Hormuz to the Red Sea, it is possible that, in response to more war, the front will expand even further, reaching the Indian Ocean and perhaps beyond," said Safavi in a video published by Iran's Fars news agency.

NASA/CFR: Aerial imagery of Diego Garcia, the Chagos Islands’ largest landmass, and home to the U.S.-UK military base.

This marks the first time that an adviser to Iran's supreme leader explicitly mentioned hitting targets in the Indian Ocean as a heightened military threat.

The strategic British military base at Diego Garcia, which is also heavily used by the United States, lies deep in the Indian Ocean - some 2400 miles away.

The Iranians are believed to have actually fired ICBMs on the base at the height of Trump's Operation Epic Fury.

Diego Garcia was first targeted on March 21st, with The Wall Street Journal at the time reporting that one missile had a mid-flight malfunction, while the other was engaged by an SM-3 interceptor missile fired from a US Navy vessel, though it's unclear whether this latter projectile ever hit its target.

Brent surged to around $106 after a military adviser to Iran’s supreme leader said Tehran may expand the war to the Indian Ocean if the US or Israel attacks again, further undercutting hopes of a deal. —Bloomberg

Iranian negotiators are vowing they will not back off Tehran's firm conditions for ending the war, after this week sitting down with the US team in New York on the sidelines of the UN General Assembly.

Saudi Arabia Says Intercepted 6 Houthi Missiles

Meanwhile another attack on the Saudi kingdom by the Houthis:

Saudi led coalition in Yemen says it intercepted six ballistic missiles launched by Iran-backed Houthis

"They broke the agreement and committed another vicious act. We have therefore toughened our conditions," spokesman for the Islamic Revolutionary Guard Corps (IRGC) Brig. Gen. Hossein Mohbi told AFP in an interview this week. He also said that if the US doesn't change its trajectory, it "will only make things difficult for themselves".

"We are not their playthings, and they cannot unilaterally violate an agreement they signed whenever they please," he emphasized.

Bloomberg just dropped the most disturbing investigation I have read this year, and every AI builder should read it and take it seriously.

On February 28, two Tomahawk missiles hit an elementary school in Minab, a small town in southern Iran. 156 people died. At least 123 were… pic.twitter.com/RqT1lwzsLP

— Ihtesham Ali (@ihteshamali) September 23, 2026

"We believe we have won this war, and we are currently consolidating that victory into a total deterrent force," he added.

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Tyler Durden Thu, 09/24/2026 - 15:20

Wall Street's Nuclear Bull Case Requires Reactors To Actually Get Built

Wall Street is largely on board with the nuclear bull case. But investor patience is thinning with an industry that is enjoying both political support and demand from deep-pocketed customers, yet still struggles to this day to get any projects actually started.

We noted a similar sentiment with Barclay’s nuclear outlook, as investors increasingly want evidence of real delivery.

New research from Jefferies and Bank of America echo similar verbiage (Professional subscribers can read the full notes here at our marketdesk.ai portal).

Jefferies' Laurence Alexander projects global nuclear capacity reaching 1,903 GW by 2100, (almost 5x from 2025 baseline). Their forecast also has solar capacity expanding roughly 22x, geothermal 18x, and wind 12x.

Jefferies frames the rising electricity consumption as leaving room for generation expansion growth across all four low-carbon sources, instead of one just taking over.

Most of the concerns come down to project financing. Massive upfront costs and years without revenue make nuclear particularly sensitive to financing costs. Government support is a way of bridging the gap, but standardized construction and repeat orders will be what really drives down execution risk. 

BofA's conference recap highlights China's approach to repeatable fleet deployment, contrasted against Western developers' reluctance to break ground.

Representatives from nuclear companies in China stated their solution to rapid nuclear deployment was standardization, specialization, and centralization. Emphasizing that this must be done across all key areas, including engineering, construction, and talent, the less-than-democratic nation proves why China's success isn't exactly repeatable in the US.

At the recent World Nuclear Association Symposium, the fuel market found itself at the center of attention as one of the notable constraints of the ongoing nuclear renaissance.

Enrichment was the hot topic of the fuel chain. European enrichment giant Urenco noted their order book had grown from just under €9 billion in 2021 to over €21 billion recently.

We've commented repeatedly on not only the lack of enrichment capacity within the US, but the specific lack of unobligated enrichment capacity. Significant investment is still required across the nuclear value chain, but finding a way to create a fuel supply for America's national defense needs (unobligated) is even further behind.

BofA took notes on Amazon discussing contributing capital and expertise to X-energy, Equinix supporting developers, and Exxon exploring nuclear industrial heat. Grid connections, completed designs and allocating construction risk remain obstacles, while new reactors' timelines extend beyond the immediate data-center boom.

Jefferies favors Cameco, Kazatomprom, NexGen and Denison, while BofA prefers Constellation, Cameco, Oklo and Standard Nuclear.

Needham's Sean Milligan initiated NANO Nuclear with a Buy rating and $33 price target. He highlighted its $8.5 million acquisition of Ultra-Safe Nuclear Corp’s development work behind the 15 MW KRONOS design. The University of Illinois Urbana-Champaign project is in formal NRC construction permit review, with key milestones targeted for 2027.

Milligan argues that 9.9% initial enrichment could ease fuel sourcing compared with designs requiring approximately 19.75%, while $580 million of liquidity supports the licensing runway.

Tyler Durden Thu, 09/24/2026 - 15:10

Columbia Professor Wins Award For Book On 'White Paint' Being Racist

Authored by Micaiah Bilger via The College Fix,

Among the many woke winners of this year's prestigious National Book Awards is a black Columbia University professor whose screed attacks "white paint" as racist.

Professor Wendy Walters' new book, "A Dead White: An Argument Against White Paint," claims that white paint is not the "neutral" architectural design element that it initially appears to be.

Instead, she "interrogates all that we have taken for granted about the substance that colors, or fails to color, the structures and objects that surround us - and what the collective impulse toward white paint can tell us about culture, politics, and individual desire," the publisher's description states, in part.

The idea for the book originated with the Ivy League professor's "genuine and visceral dislike of white paint - a feeling that is at times overwhelming," she explained in a 2021 video for Creative Capital Foundation on YouTube.

But Walters pushed back on the idea that her emotional response is "possibly irrational."

"As I tried to understand why my response to white paint was so strong, I discovered numerous examples of the way that it figured into systems of erasure, exclusion, violence, and the masking of power in the social and natural world," she said in the video.

Most of the examples she gave linked white paint to racism.

In one, white supremacists splattered white paint outside the Rothko Chapel in Houston, Texas in 2018, and, in another, white paint was used to vandalize a 100th anniversary memorial gallery to the Tulsa race massacre in 2021.

She also mentioned a rainbow crosswalk for "LGBTQIA+ persons" in New Brunswick, Canada being painted over with white paint in an "act of intolerance."

"I hope to encourage the reader to think about how practices of decoration and adornment might allude to hidden narratives of power, whether or not they recognize them as being so," she said in the video.

The publisher's description of her work does not mention racism or white supremacy, and the book isn't scheduled for release until October.

However, in the 2021 video, Walters linked the book to her past writings about racism. According to her university bio, she "writes regularly about visual culture, political geographies, climate, and race and identity."

"A Dead White" is not the first to link white paint to racism, though.

Three years ago, Norway's University of Bergen received a $1.2 million government grant to explore how white paint has contributed to white supremacy around the world, The College Fix reported at the time.

The "NorWhite" study focuses on whether the Norwegian-developed paint pigment titanium dioxide white helped advance white "as a superior color," Fox News reported.

Why such projects are deemed worthy of awards has a lot to do with the left's capture of the arts and academia. As New York Times columnist Bret Stephens wrote on Tuesday: "Bluntly, the National Book Award has become a D.E.I. checklist: Only authors with preferred identities, preferred topics and preferred politics stand any realistic chance of winning."

Stephens mentioned Walters' book as one example. Other winners, announced last week, include books about "queer" parenting and "Islamophobia in America."

The problem is not that moderates or right-leaning authors are no good. The problem is that they are being shut out and a broad range of topics and ideas are being ignored.

Maybe Walters is a good writer. Maybe not. Her book isn't available to the public yet. But this "everything is racist" bent is getting old and boring. Frankly, it's lazy, too.

Pick something, anything: clean pantries, clowns, Mozart, capitalism, mathematics, milk, Taylor Swift (these are already taken, by the way). Then, argue that it's racist, smatter in a few "lived experiences" and - voila! - book deals and major prizes. Repeat. Again, and again, and again.

And they wonder why so many Americans have developed a distaste for academia.

* * *

Tyler Durden Thu, 09/24/2026 - 14:50

Greenland Mining Company Plans To Double Size Of Rare-Earth Mine As US Signs Agreement

Authored by Jill McLaughlin via The Epoch Times,

Days after President Donald Trump announced a security agreement with Greenland and Denmark, Greenland Mines applied on Sept. 21 to double the size of its rare earth mine to supply magnet metals needed for electric vehicles, wind turbines, and defense systems on the island.

The North Carolina-based company's Sarfartoq rare earth district in southwest Greenland would expand from 74 square miles to about 175 square miles if approved.

"This application is about building Sarfartoq at district scale," said Bo Moller Stensgaard, president of Greenland Mines in a statement.

Greenland Mines is developing a rare earth neodymium and praseodymium project that could reduce the Western Hemisphere's dependence on China for the magnet rare earth minerals. China-based processors control at least 75 percent of the global market for all rare earth elements.

The Greenland Mines project is expected to produce about one-third of the world's neodymium-praseodymium oxide refined outside of China, serving as a key source of the rare earth ingredients needed for energy, transportation, and defense technologies.

China's export restrictions on rare earths have driven prices up in the past year. The Trump administration has focused on supporting and investing in domestic rare earth operations, but a supply of ore is still needed, according to Greenland Mines.

With the signing of the security agreement, Trump said no U.S. adversary could "make sensitive investments [in Greenland] without our express written approval."

"Greenland hosts some of the largest known undeveloped rare earth deposits in the Western world, and a framework that screens adversary capital out of the island makes those deposits more clearly available to allied supply chains," the company stated Tuesday.

Greenland Mines' project includes an open pit and underground mining operation at the site. Initial assessment of the materials at the mine estimate the value at about $2.05 billion, according to the company.

The project would produce rare earth elements used in high-performance permanent magnets.

Critical metals stocks surged Monday on news of the deal, and Greenland-linked market shares rallied when the markets opened.

Greenland Energy, a privately owned Texas company, has an agreement to drill on the Jameson oil and gas project in the Jameson Land Basin on the eastern coast of Greenland. The company, founded in 2025, began shipping drilling equipment to Greenland in late July.

Greenland Mines’ expanding Sarfartoq rare earth district in southwest Greenland. The existing exploration license, outlined in yellow, hosts the Sarfartoq Carbonatite Complex, the ST1 neodymium-praseodymium deposit and several known but less-developed rare earth zones. The new eastern exploration license application is shown in red. Greenland Mines LTD

Critical Metals Corp. is developing the Tanbreez Rare Earth Project in southern Greenland - one of the world's largest deposits with a high concentration of heavy rare-earth elements.

The company's Romanian refinery is also expected to process about 28,000 tons per year of rare earth and critical metal products, including 26,000 tons of high-purity silicon dioxide powder, or silica, used in food, pharmaceuticals, paints, plastics, rubber, ceramics, tech, and electronics.

Tyler Durden Thu, 09/24/2026 - 14:20

'Palestinian Rachel Dolezal': Philadelphia Activist Admits She Lied About Being Palestinian And Black

A Philadelphia activist spent years building a public persona around identities she apparently didn’t have, proving once again that even people obsessed with policing everyone else’s identity occasionally forget to check their own paperwork.

Hannah Gann, a teacher and prominent local anti-Israel activist, admitted this week that she is a white woman who had falsely portrayed herself as having Palestinian, Tunisian and Black heritage, according to the NY Post.

The confession came after fellow activists grew suspicious and confronted her. Gann acknowledged on Instagram - still public and looking like a treasure trove of social justice campaigns and advice on how to handle Covid - that she had been lying for years and described herself as a woman of considerable wealth and privilege. 

That was quite a departure from the identity she had cultivated publicly.

Gann had been presented as Palestinian American at activist events, talked about supposed relatives in Palestine and became active in Philadelphia’s pro-Palestinian movement.

The Post writes that former acquaintances remembered someone different. A University of Pennsylvania classmate told the Philadelphia Inquirer that Gann had previously been known as a white Jewish woman. The classmate alleged that after returning from Peace Corps service in Rwanda, Gann began darkening her appearance with makeup and adopting African American Vernacular English.

Members of the Racial Justice Organizing Committee and Philly Educators for Palestine eventually confronted Gann about inconsistencies in her story. The groups said she admitted the deception and later described themselves as stunned and angered by it.

There was apparently a financial angle, too. According to reporting cited by the New York Post, Gann solicited money while claiming financial hardship partly because she was helping relatives in Palestine.

Her actual upbringing appears considerably more comfortable. Her father is a tax attorney who previously worked for the Treasury Department, and the family lived in a Falls Church, Virginia home reportedly worth about $1.8 million.

Gann was also a vocal presence at anti-Israel demonstrations and had attracted attention from antisemitism watchdog groups over statements at protests and online. At one demonstration outside a Jewish bakery following the Oct. 7 Hamas attack, she spoke in support of Palestinian resistance and urged demonstrators to take their movement into the streets.

In her confession, Gann acknowledged the fiction extended to friends, colleagues and even her own family, saying omissions and half truths eventually developed into outright lies.

Which is an impressive amount of commitment to the bit, even by modern activist standards.

The episode has inevitably drawn comparisons with Rachel Dolezal, the former NAACP official revealed in 2015 to be white after presenting herself as Black for years, earning Gann the nickname the “Palestinian Rachel Dolezal.”

Gann teaches at the Workshop School in the Philadelphia School District. The district said it was aware of the controversy and was providing support to students and staff. Whether Gann will face disciplinary action remains unclear.

One commenter on her Instagram wrote: "This is really horrible . We just talked in early september and ya told me your family is palestinian and have suffered so much from this genocide. Im sad for my daughter who admired you deeply, the palestinian community directly impacted by this and the young people who looked up to you."

Another quipped: "Omg we got Palestinian Rachel Dolezal before GTA6."

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ON US.$10 off one order of $30 or more. New or returning, one per person. YOUR EMAILGET MY $10 →Signs you up for ZeroHedge Store emails. $30 minimum, once per person, can't be combined. Every order helps support ZeroHedge. Tyler Durden Thu, 09/24/2026 - 14:00