9-24-2026: Trump-Xi Summit, Surging Yields + AI Disruption Trade Fears

Michael Reinking, Senior Market Strategist at the NYSE, reviews a dynamic week in which the S&P 500 held modest gains despite poor breadth and surging Treasury yields. Strong flash PMI data fueled inflation worries, while Meta's new AI agent Muse sparked a fresh disruption trade across wealth managers, brokerages, and travel names. Oil prices swung sharply on shifting Middle East diplomacy headlines all week. President Trump and Xi Jinping met at the White House extending their trade truce through January while easing broader market jitters. Looking ahead, next week brings PCE inflation data, key earnings from Nike and Micron, and OpenAI's anticipated Dev Day.

Hello, I'm Michael Ryan King, Senior Market Strategist at the New York Stock Exchange.

AI hasn't destroyed humanity yet, so we're back for another episode of Market storylines.

Until that happens, we'll be here every week to keep you up to date on the key trends and events driving global markets.

Now, we're recording on Thursday, September 24th.

Now last week, Eric took you through some familiar themes, highlighting the evolving geopolitical and AI landscapes and the continued rise in global yields

with the Federal Reserve hiking rates for the first time since 2023.

Now it was a volatile week for equity markets with the S&P 500 briefly breaking below the low end of the range that has been in place since June, testing its 100-day moving average just over 7,500 before bouncing back to end the week unchanged.

Now, tech strength helped to offset losses elsewhere. Most other major US indices ended the week down between 1 to 2%.

Now, oil prices pulled back late in the week on reports that President Trump would meet with Gulf leaders on the sidelines of the UN meetings this week and that China could push Iran to throttle back the Houthis.

The other big story was in crypto. Early in early in the week, the complex was under pressure after the CLARITY Act failed to pass a procedural vote in the Senate, but rallied sharply on Friday after the SEC and CFTC both made announcements to use their existing statutory authority to establish regulatory guidelines for digital asset markets.

Now Friday ended with a bang as it was quadruple witch expiration and the quarterly index rebalances, which led to a record closing auction with around $245 billion in notional value trading.

Now raising the question as to whether the rolling off of hedges would be a release valve, bringing with it some volatilities we entered what has historically been the worst two-week period during the year for equity markets.

Now with the UN General Assembly meetings in New York this week, geopolitics would certainly be center stage. And there have been multiple high profile attendees that have made their way down to the floor of the New York Stock Exchange, including the First Lady, Melania Trump and Secretary of State Marco Rubio.

Now outside of geopolitics, the themes remain very much the same with investors continuing to focus on rising oil prices, yields, and the fast evolving world of AI.

Things are evolving so quickly that it's already been rebranded as super intelligence.

Now the week started off on a positive note, driven by a sharp decline in oil prices on hopes for a diplomatic resolution in the Middle East and Ukraine, despite a picked up of activity over the weekend, and reports that the East-West pipeline was coming uh close to coming back online.

Now, Ice Brent broke below $100, which helped to trigger a broad-based rally, but once again it was tech leading the way after positive reviews of Meta's personal AI agent platform Muse,

which sent the stock up over 10% and put a bid back in the AI trade.

Now the S&P 500 ended the day up around 1 and a half%, back within 1% of its all-time highs again.

It was a risk on day with thematic favorites moving sharply higher, and crypto also continued to surge with Bitcoin moving above 85,000.

However, it was notable that yields didn't really pull back, a harbinger of things to come.

Now, major US indices spent Tuesday consolidating the previous day's gains, but the impact of Muse continued to be felt, as this led to a new twist on the AI disruption trade with weakness in wealth management, traditional brokerage businesses, payments processors, and online travel companies as investors worried about disruption from AI agents.

Now, President Trump gave a wide-ranging speech at the UN, which didn't really have much of a market impact. However, late in the day, he acknowledged that US officials met with Iranian delegation suggesting discussions went well.

Now, things took a turn on Thursday after Treasury yields surged over 10 basis points across the curve, following an S&P Global Flash PMIs that came in well ahead of estimates.

Now, S&P highlighted that excluding the surge in business activity after the pandemic, that growth was at the highest level since 2015.

However, it also noted that inflationary pressures were intensifying.

Now the S&P 500 fell nearly 1% giving back about half of the week's gains, while small caps turned lower for the week.

Now today's session has been another volatile one as President Trump and Xi Jinping are meeting at the White House.

Ahead of his arrival, Treasury Secretary Besen announced that the trade truce between the two countries would be extended for two months until January 10th.

Topics topics expected to be discussed revolve around the three Ts, trade, Taiwan and technology, with both leaders agreeing they don't want to slow the progress on the latter.

Now market expectations for any major developments are pretty low.

Now equities were under pressure early as oil prices were on the move higher again, up about $10 from this week's lows.

Adding to the weakness, ahead of the open, Bloomberg reported that Oracle sent the developer of its giant Project Jupiter data center in New Mexico, a force majeure notice to delay payments if the data center is not completed on time.

However, an Oracle spokesperson has said the project remains on track.

Now this seems like a preemptive move to cover risk, but the news has taken the wind out of the sails of the AI trade.

However, shortly before recording, Reuters reported that the US and Iran were discussing a phased deal to reopen the strait, which has helped both equities and oil reverse some of their earlier moves.

Now as you can tell, it's been a dynamic headline driven week.

Now as we're recording, the S&P 500 is holding on to modest gains for the week, while breath has continued to be poor, leaving other major indices modestly lower, which has been an ongoing theme since the middle of August when rates began to move sharply higher.

Now over that time frame, the two-year yield is up around 70 basis points approaching 5%, while the 10-year is up about 50 basis points having moved decisively through that threshold this week.

The S&P 500 is around unchanged over that time, but the equal weight version of the index and small and mid-cap indices are down around 5%.

This does leave an interesting setup as we head into the end of the quarter next week.

We'll be watching to see if there's any major pension fund rebalancing given the extreme move in rates and funding ratio and as funding ratios have improved significantly.

Now looking forward to next week, economic data will be back at the forefront, highlighted by PCE and the labor market data. You know, there are a couple of high profile earnings including Nike, Jabil and Micron.

And OpenAI has its dev day on Tuesday, which is also the start of the MLB playoffs.

And since our hopes and dreams for the Giant season were dashed early this week with Jackson Dart's injury, the Mac desk is holding out hope that Aaron Judge could return to the lineup for a magical Yankee's October run.

That'll do it for this week. You can watch Market storylines on tv.nysc.com or on the NYSE YouTube channel. Thanks for joining me. I'm Michael Ryan King. We'll see you next week.