Markets priced a roughly 70% chance of another Fed hike in October. Brent rose more than 3%. Stocks still finished close to unchanged.
That quiet finish hides two pressures on stocks: higher bond yields and higher oil.
Strong Activity Keeps Another Hike in View
The flash U.S. composite PMI reached 58.4, its highest reading since July 2021. Input prices rose faster, too. Initial jobless claims fell to 197,000 for the week ended September 19.
The Atlanta Fed’s third-quarter GDPNow estimate rose to 5.1%. New York Fed President John Williams said another hike this year was reasonable. Last week’s 25 basis point increase had put the funds rate at 3.75% to 4.00%.
That is why another hike is on the table. Higher bond yields also give investors more competition for stocks.
The reports on the 10-year Treasury yield do not agree. Stock Tweets said it moved toward 5.20%. The Financial Times said it rose to just below 4.86% after the Treasury announced a $6bn bond buyback. I wouldn’t treat either yield as an agreed closing level.
The Financial Times said that buyback was above an earlier $4bn pledge, but below estimates of $8bn and $10bn.
A separate post on x.com said the U.S. 30-year yield reached 5.402% and had spent 79 straight days above 5%. It also reported multidecade highs in Japanese bond yields. The post’s claim that “EVERY COUNTRY IS LOSING CONTROL OF ITS BOND MARKET” is its view.
There is disagreement about what the Fed should do next. Trump renewed a threat to stop trading with countries where the U.S. runs a deficit unless the Fed cuts rates. National Economic Council Director Kevin Hassett said the Fed would make the decision and that the case for holding steady was strong.
Tom Lee said inflation could be significantly lower in six months. He pointed in part to a PCE methodology change due September 30 that he said could lower year-over-year inflation by 20 to 40 basis points. That is his outlook. For now, markets are pricing another hike.
Meta Puts a Price on Its AI Agent
Meta introduced a personal AI agent app that can book appointments, fill out forms, and monitor home security feeds. It will have a free tier and plans costing $20 or $100 a month, depending on usage.
Meta says the agent asks before sensitive actions and does not see users’ actual passwords or payment details. Users must opt out if they do not want their interactions used to train Meta’s AI models. Meta says it will remove critical identifying information from interactions it uses.
How much money the agent could make is less settled. Wang said Meta is exploring a cut of shopping transactions made through the agent, but has not settled on a plan. The article also reports pressure on Meta to show returns on its AI investments.
Separately, a speaker at @fundstrat_direct put annual capital spending at 800 billion and said it was “going to 1.1.” That account gives no unit for 1.1, so the comparison cannot be made precise.
A Longer Trade Truce and Other Updates
The U.S. and China extended their trade truce by two months, to January 10, 2027. Tariffs, farm purchases, rare earths, AI, and Taiwan remain unresolved. The extension buys time, with those issues still on the table.
A post says DHL, PepsiCo, and US Foods placed large Tesla Semi orders and are expected to take delivery of new trucks. Those are expected deliveries, not completed ones.
Fidelity says the average 401(k) balance rose 10.5% from March through June. Participants in their 30s averaged $75,200; those in their 40s averaged $156,800. Including employer contributions, participants invested an average 14.4% of their paychecks.
In one post, @value-investing projects a long-term Berkshire return in the mid to high single digits. The post says whether to buy or sell depends on the investor’s alternatives and risk.
In another, @value-investing says LVMH shares are down 37% and argues that a move from 18 to 25 times earnings could lift the stock. But the example switches from a cited €1bn in earnings to “13 billion times 25.” Those figures need care before using the example.
Oil Rises, Then Hormuz Talks Offer Relief
Brent rose more than 3% toward $107 after a Houthi missile attack on Saudi Arabia and little visible progress in U.S. and Iran talks.
Then Reuters reported that negotiators were exploring a phased deal to reopen the Strait of Hormuz in exchange for easing the U.S. economic blockade. That report capped oil’s rise and helped stocks recover from their lows.
The fuel concern reaches beyond oil prices. @geopoliticaleconomyreport attributes high fuel prices to the U.S. war against Iran. The speaker cited diesel signs at $9.99 at some California stations and said truck fuel costs spread through the economy because trucks carry goods.
The possible deal is still uncertain. Iranian state media says Tehran wants an immediate end to the naval blockade and the release of frozen assets. A senior Iranian official told Reuters the strait could reopen within seven days if U.S. military pressure and restrictions on Iranian ports ease. Negotiators still disagree over which side acts first.