Last updated: September 16, 2026, 6:00 AM ET
Fed Decision Looms Over Global Markets
The Federal Reserve is expected to hike interest rates on Wednesday for the first time in this cycle, defying pressure from the White House. Bond traders have piled into bearish positions ahead of the decision, with markets pricing a 90% probability of a hike, and history suggests the Fed will deliver what markets have locked in. The 10-year Treasury yield breached 5% for the first time since 2007, raising questions about what comes next for the key borrowing benchmark. The benchmark yield rose to 5.04% amid concerns over inflation and higher interest rates, while the broader global bond selloff deepened as 10-year yields hit multiyear highs. The 10-year Treasury yield hit its highest level since 2007, with intensifying oil prices adding to inflationary pressure. Treasury yields are closing in on an inflection point at 5.25% where historically stock and bond losses have accelerated. Traders are gaming out what a 10-year yield at 5% spells for US stocks as markets navigate a historically volatile period.
US Equities Under Pressure
US stocks fell on Tuesday after the benchmark Treasury yield touched its highest level since 2007. The Dow industrials led modest declines as the 10-year yield hovered near 5%. Stocks and bonds are finding some relief after days of selling as traders await the Fed decision. US stocks also fell ahead of the Federal Reserve's rate decision as Treasury yields continued their shock rise. Tech ETFs saw massive inflows this summer, but lopsided bets are now getting hit in the AI stock selloff. Stock investors should actually root for a rate hike, with markets pricing a 90.3% chance of a hike.
European Markets
European shares snapped two days of losses as oil prices eased and the bond selloff abated ahead of the Fed decision. However, investor fatigue is growing as Europe's rally has become more concentrated this year, amplifying risks. A long-awaited feed of data on European stocks finally went live this week, but industry groups say it needs more depth. In the UK, WH Smith Plc expects profit at the bottom of its guidance range as inflationary pressures weigh on margins. UK inflation pushed higher in August, almost exclusively due to higher energy prices. The Bank of England faces a three balance sheet problem related to issues with its Issue Department.
Asian Markets Mixed
Japan's Nikkei Stock Average slipped 0.2% as losses in chip-related stocks weighed on the index. Japanese export growth slowed to 19.3% in August while remaining at an elevated pace, driven by a surge in chip shipments. South Korean stocks struggled as turnover fell to the lowest level this year amid waning investor enthusiasm. In China, CATL shares dropped 10% over two days, suffering their steepest two-day decline amid mounting outlook concerns. China's top steel industry body called on mills to rein in output and inventories. Hong Kong's plan to build a global gold hub will provide an entry point for trading commodities and boosting yuan use. Hong Kong property and technology firms may get a boost from the Chief Executive's new five-year plan. Hong Kong will launch an index for offshore yuan bonds as part of its push to develop the dim sum bond market. Hong Kong also pledged to accelerate development of a technology hub near mainland China to boost home supply.
Oil and Energy
Oil prices declined but remained above $100 a barrel as Middle East supply concerns persisted. Crude prices fell but stayed near multimonth highs ahead of the Fed decision. Oil futures rose amid market pessimism about flows out of the Middle East following supply disruptions. Oil prices climbed to four-month highs with the shutdown of Saudi Arabia's East-West pipeline. Asian refiners are starting to think about lowering run rates as oil hits $110 on Middle East war concerns. Russia boosted oil exports with crude shipments jumping the most since May as strikes on Saudi infrastructure drove prices higher. European natural gas held near its highest levels since 2022 as traders worked to secure stockpiles. The LNG market faces a prolonged Hormuz outage, according to Mitsui OSK Lines, which doesn't expect LNG shipments to normalize soon. China's gasoline and diesel inventories are plunging as refiners grapple with supply constraints, raising the chance of export curbs.
Fuel Prices and Consumer Impact
Americans have spent $100 billion more on fuel during the Iran war, with higher gasoline and diesel prices leading many families to save less and curb spending. The average price of a gallon of diesel in the US hit a fresh record of $6.27. California is a test case for US fuel demand as prices soar, with gasoline and diesel purchases not yet collapsed but a long-term behavioral shift underway. Rising fuel prices have set off anger and protests around the world, from Indonesia to Guatemala to Syria. German Chancellor Friedrich Merz promised relief for drivers on surging gas prices, saying his coalition will take action on price gouging. American businesses are struggling to set prices amid uncertain energy costs, finding it difficult to predict how long high energy costs will persist.
Precious Metals and Commodities
Gold advanced after a two-day drop as traders weighed a modest retreat in oil prices before the Fed decision. Gold's descent continued in early Asian trade as expectations of central bank tightening and rising yields pressured metals. The debasement trade has split as gold and Bitcoin bets diverge, with Treasuries sinking and the dollar falling this year. Copper edged higher as US bond yields eased ahead of the Federal Reserve's decision. Iron ore trader Radiant World and Sapphire Minmetals have filed a lawsuit against Glencore Plc for $2 billion. Glencore has accused Radiant World and associated companies of sending falsified invoices. Radiant also alleges Glencore hid their ties from audited records, while the Swiss commodities group says claims are meritless.
Emerging Markets
Emerging-market stocks and currencies fell for a fourth session as rising global yields and oil prices weighed on sentiment. Uganda's shilling slumped to a two-year low against the dollar, weighed down by surging foreign exchange demand. India's market regulator has given arbitrage mutual funds more flexibility in managing their portfolios to aid auctions. Indian bonds are under pressure as global yields surge, with the RBI's planned bond sales likely to put more upward pressure on yields. Traders are treating Romanian bonds as the European Union's only junk-rated sovereign debt, looking past political risk to pocket junk-like yields. HSBC and ICICI Bank in GIFT City have emerged as the biggest lenders of foreign currency loans for the Indian diaspora, propelling India's finance hub. Poland's revved-up stocks have further to run as new investors pour cash into Eastern European equities, according to a UniCredit banker. Zorlu Enerji's bond is poised for its biggest drop on record after the Turkish energy company hired debt advisers. Venezuela's central bank is moving to squeeze liquidity in the banking system as higher government spending tests the bolivar. Recent high-profile deals allowing foreign drillers to tap Venezuela's vast oil reserves are "smoke and mirrors," according to former US diplomat Thomas Pickering.
Credit and Private Markets
Credit investors are "being paid to take risk, finally," according to Oaktree Capital Management. KKR & Co. doubled the amount of private investment-grade financing it structured, with deals surpassing $80 billion this year. Blackstone Inc. is seeking to raise at least $8 billion for its private credit fund focused on green infrastructure. Apollo Global Management has provided $585 million of financing to flexible workspace provider The Executive Centre. Brookfield is nearing a recapitalization of Center Parcs in a deal valuing the UK holiday resort operator at $6 billion. Brookfield also agreed to acquire Australia's Reliance Worldwide for $2.9 billion, with the plumbing-supplies manufacturer confirming a US$3.38-a-share offer. Truist Financial has inked a deal to sell $5.5 billion of auto loans as part of its exit from near-prime auto lending. At a time when investors are dumping long-term debt, one fund manager is betting on battered 50-cent long bonds in a high-risk gambit. AI-related debt is rivalling Treasuries in a bond market shake-up, representing imperfect substitution at best.
Tech and AI Investment
OpenAI is weighing a funding round at a $1.5 trillion valuation that would double the value of the Chat GPT maker. Sam Altman's start-up could capitalize on demand for its technology after new model releases, eyeing a $1.2 trillion valuation before a potential IPO. The AI company is adding tools and features to woo both top talent and advertisers. Databricks says its business is accelerating as it piles investments into Asia. Asian software and platform stocks have quickly gained favor with investors as the top AI trade, according to a Bof A survey. Apple took home the most Emmys this year with 28 trophies, breaking the chokehold HBO and Netflix have had on the awards. Apple has finally built a smarter Siri that works like a chatbot, but AI agent apps such as Instinct and Muse are still ahead. Nvidia's Jensen Huang and Meta's Mark Zuckerberg have rejected efforts to coordinate an AI slowdown, distancing themselves from safety proposals. Zuckerberg appeared to jab at Anthropic on social media in a debate over AI slowdown. The Gates Foundation has pledged $1 billion to combat AI inequality, with Bill Gates vocal about the dangers of artificial intelligence. The debate on AI regulation has drawn unlikely political allies including David Sacks, Lina Khan, Bernie Sanders and Steve Bannon. Congress has proposed many bills for AI regulation but enacted few. AI is unpopular with voters, according to a New York Times/Siena poll, with neither party having claimed the issue. President Trump's posts about AI data centers on Truth Social drew rare backlash from commenters. Trump says AI doesn't need more guardrails and calls safety fears a hoax.
Geopolitics and Trade
The House voted to halt the war with Iran or require congressional approval, the fifth time a chamber of the Republican-controlled Congress has voted on the issue. The Congressional Budget Office estimates the Iran war has cost $38 billion, though its analysis was limited by incomplete data. The Pentagon Inspector General detailed US losses and challenges in the Iran war, including helicopters pulled from four countries for casualty evacuation. Trump approved a $2.8 billion arms sale to Israel including 40,000 one-ton bombs, among the largest deliveries of US munitions to Israel. The US faces a munitions shortfall after the Iran war, with new federal reports shedding light on the sweeping fiscal toll. US-China tariff talks are solidifying prospects for an extension to the trade truce as leaders prepare to meet. New Zealand's parliament passed legislation enabling a free-trade agreement with India. The EU rebuffed a "unique alliance" with Canada, while China tightens overseas travel controls. China tightened control of overseas travel in a sweeping new law, with President Xi Jinping stepping up efforts to secure state secrets and advanced technology. The US Justice Department filed a forfeiture lawsuit to seize $61 million in alleged proceeds from Chinese groups using Binance to launder Iranian oil money. Federal prosecutors said proceeds from the sale of Iranian oil flowed through Binance. Around $1.5 billion was sent to Iran through a series of transactions, prosecutors said. A close financial fixer for ousted Venezuelan President Nicolás Maduro pleaded guilty in a US money-laundering case. Coin Ex said it was ceasing operations less than three months after a Wall Street Journal report on illicit Iran cash. A landmark US crypto bill failed in the Senate over Trump ethics concerns, a massive setback for an industry that has spent record sums lobbying.
Sovereign Wealth and Institutional Flows
New Zealand's Superannuation Fund returned 14.2% as US stocks look expensive, with the fund being one of the world's top-performing sovereign wealth funds. The NZ Super Fund grew 14% despite being underweight on US tech, and expects an equities pullback. Prime Minister Mark Carney brought together about 100 money managers in Toronto to pitch Canada as a haven of investment stability. Carney is expanding the scope of a major investment tax write-off to pipelines, mining and other sectors. Canada's proposed productivity mega deduction would lower the effective tax rate by a significant margin. Dutch government will propose a capital gains levy next year, bringing the Netherlands in line with European peers. Switzerland's 26 cantons compete fiercely for companies and wealthy residents, drawing Vontobel's move to Zug. Grand institutions are alternating between virtually identical equity funds from BlackRock and Vanguard to save millions in taxes. A federal judge dealt a setback to Susquehanna International Group's lawsuit claiming insider trading. If you buy and hold a leveraged ETF, anything can happen, according to WSJ analysis of leveraged ETF risks.
Corporate Deals and Developments
Grab has agreed to buy a 60% stake in Atome Financial for $1.49 billion in cash. Brightshore Capital, formerly known as GTIS Partners, has launched a $250 million property debt platform. Vodafone took up to €1.1 billion in hit from Patrick Drahi's sale of a 50% stake in OXG, which will deprive the joint venture partner of certain benefits. Santander won a £677 million legal appeal over a PPI mis-selling bill, with the Court of Appeal overturning an earlier ruling. Nissan will invest £170 million to build a new hybrid SUV at its Sunderland plant, adding a fourth model to boost factory utilization. KPMG will cut another 200 jobs in its UK advisory business, with the latest redundancies affecting data and technology teams. The Observer raised £10 million in a new funding round, with Guardian owner the Scott Trust opting not to participate. Vera Bradley's shares jumped after the company swung to a fiscal second-quarter profit, according to its CEO. Exxon Mobil won Texas approval for a $5 billion carbon capture project after a lengthy battle over safety and subsidies. Ørsted's boss says Europe must act against what he calls unfair Chinese wind turbine makers, backing EU efforts to clamp down. The UK government's Climate Change Committee warns that Heathrow expansion is incompatible with climate goals, with a new runway emitting as much CO₂ as the city of Birmingham. UK defence giants General Dynamics and ARX Robotics are collaborating on "land drones" to transform beleaguered Ajax fighting vehicles. The FCA introduced stricter rules to ensure people can speak up and be protected, following the Odey judgment. Sullivan & Cromwell has hired a team of lawyers from rival Kirkland & Ellis in a push into private equity. The white-shoe law firm had largely avoided acting for buyout groups even as the industry grew. A hedge fund warned an ousted lawyer to settle a £36 billion BHP dam collapse claim, in a case becoming a cautionary tale for litigation funding. Vitol Group paid $75 million to buy out a former employee who was charged with corruption. Larry Ellison may have little choice but to sell Oracle shares if he wants to raise cash, showing even billionaires struggle with liquidity. Takis Georgakopoulos became chief executive of Fiserv just as it confronted big challenges, facing Wall Street's toughest turnaround job. Hedge fund manager Jamie Beaton has 12 advanced degrees from Harvard, Yale, Oxford and other top universities. Jacob Fugger accumulated a fortune estimated at $4 trillion in today's terms, making his family Europe's richest ever.
Politics and Policy
President Trump's super PAC is suddenly spending heavily on some midterm races, with $138 million and counting to save Republican candidates. Ultra-wealthy donors overwhelmingly back Donald Trump's party over Democrats as money flows into the 2026 midterms. A Times/Siena national poll suggests Republicans are reeling and a blue wave may be building. Democrats have gained midterms momentum, while Trump calls AI fears "a hoax." The House killed a bid to impeach Trump as dozens of Democrats declined to register a position on articles of impeachment. The Supreme Court blocked Trump's mail ballot plan, standing up to the president on mail voting and other key issues. Trump criticized the Supreme Court in a blistering attack over the mail-in voting ruling. The mail system took on new prominence during the Civil War by enabling soldiers to vote. FBI Director Kash Patel suggested agents could go to election polling sites, sparking Democratic alarm over a move that federal law prohibits. Treasury Secretary Scott Bessent defended the bond market intervention while testifying before Congress. The Treasury Secretary also testified on the economy and the Iran war. The median household income rose to a record $87,460 in 2025, according to annual Census data, with the poverty rate stable before Trump's safety net cuts gained force. Federal employees were paid $9.5 billion not to work in 2025 under the Department of Government Efficiency's program to shrink the federal workforce. Half of voters dislike socialism amid progressive wins, with New York City Mayor Zohran Mamdani viewed more favorably than the ideology. The Kennedy Center closed its doors despite a judge's order, after Trump said he would cancel a $257 million renovation. Trump threatened to cancel the Kennedy Center renovation. Pennsylvania officials reported a fourth measles death as an outbreak grows, making this the deadliest year for measles in decades. Prosecutors will not seek the death penalty for Nick Reiner, who has a history of serious mental illness. A jury's deadlock led to a mistrial in the Lindsay Clancy case, and scrutiny of jurors may complicate a retrial. A high school science teacher discovered a 23-foot T. Rex trackway in North Dakota.
Media and Entertainment
Stephen Colbert returned to late night on "Jimmy Kimmel Live," asking "People still do these shows?" in his first late-night appearance. "60 Minutes" saw just under 8 million viewers for its season premiere, down 21% from the previous year. Candid moments with Stephen Colbert, Megan Stalter, Rachel Sennott and Matthew Rhys were captured at the 2026 Emmys. Three writers assessed the Emmys, where "Widows Bay" dominated and "Pitt" and "Hacks" shined. Thousands of readers selected their television favorites of the season, with three winners they would change. Danny Meyer reflects on regrets and missed opportunities in a new memoir from the man behind Shake Shack. The NoHo Hospitality Group reimagines the dining room at the Public Theater, reviving the Astor family name. The Missoni family exited the brand known for its rainbow knits, leading to restructuring after financial struggles. Rolex chose to unveil its latest Padellone watch in Milan, named after a frying pan. Scotch producers are fuming over legal protection for English whisky, a move that risks adding to challenges facing the embattled sector.
Climate and Energy Transition
Rising borrowing costs mean new financing instruments will be needed for developing countries to address climate change as the finance gap widens. Nuclear fusion start-ups are attracting record investments, but some scientists think their timelines are too optimistic. The UK chancellor is considering a Budget tax raid on higher-stake slot machines, facing fierce industry lobbying over potential job losses. Vietnam could face electricity shortages from 2027 as power-generation and grid projects face delays. New Zealand dairy farmers will need to prepare for tighter profit margins as El Niño looms. Countries outside the Gulf are increasing market share of urea exports as supplies through the region are disrupted, easing food crisis fears. US manufacturers are facing a fresh burst of supply chain cost inflation as Trump's war in Iran and tariffs push up input prices while the AI boom squeezes capacity. Rising oil prices helped push EV sales ahead of gas cars in Australia for the first time. A data center in Secaucus, N.J. spilled 5,000 gallons of diesel from a storage tank, forcing a river cleanup. The CFTC is conducting a broad probe into the voluntary carbon credits market as scrutiny grows. The Federal Reserve's system for monitoring banks suffered an outage last month that hit the National Information Center used by regulators.
FX and Rates
Asian currencies were likely to face further pressure if the Fed signals additional rate hikes, making Fed guidance key to the Asian FX outlook. Reserve Bank of New Zealand Assistant Governor Karen Silk will leave at the end of December. Canada's wholesale sales rose 0.3% from the month before to a seasonally adjusted C$93.09 billion in July. Mexico is targeting Chinese travelers as high-spending tourists decline. Regulators have opened a probe into whether Tesla's steering wheel-free Cybercab may have an option for human control. AMC CEO Adam Aron and Robinhood's Vlad Tenev are clashing over tokenized stocks, testing who gets to put stocks on blockchains. Carriers are shifting more containerships through the Red Sea despite Houthi gains, while malls prove more resilient than expected. The Houthis are increasingly using artificial intelligence and other tools to produce weapons, reducing dependence on Iran. Denmark says a Russian warship fired flares at a military helicopter in the latest episode involving airspace incursions. Saudi Crown Prince Mohammed bin Salman met Abdel Fattah al-Sisi for security talks after 13 were killed in Houthi attacks. Saudi Arabia and the Houthis traded accusations of attacks as fighting inside Yemen remains fierce. Ukraine and Russia denied Trump's claims of an energy truce, with the Kremlin saying an agreement would be "a very good idea" but that any deal would need specifics. Monaco is among several nations poised to exit a global financial watchdog's dirty-money list, along with Bulgaria and Ivory Coast. Hackers claim to have spent months posing as law enforcement to obtain confidential data from Italian state email to target Revolut "crypto whales." Revolut handed hundreds of its customers' data to someone posing as a scammer, and now faces a shakedown. The US is probing cyberattacks on energy tankers bound for the American coast, with vessels attacked near Europe carrying oil and LNG. Chinese restaurant chains are putting AI on the menu, with AI-driven reductions in food waste and labor costs improving culinary economics. CVS is accelerating its clone strategy, while Target concludes a two-year search for a marketing chief. Retail executives are planning for the holiday shopping season amid debate over AI oversight.