By Mike Dolan
LONDON (Reuters) – What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
An “everything rally” in markets greets the start of a two-day Federal Reserve meeting, with stocks at record highs, bond yields subsiding and a two-month low dollar taking the heat ahead of what is widely expected to be the first U.S. interest rate cut of the year.
A quarter point Fed rate cut on Wednesday is fully priced. But the spotlight is as much on the central bank’s institutional standing as on the policy call itself, after a pair of developments underscored the White House’s growing sway over the Fed. Meanwhile, gold set a new record high, and China’s offshore yuan hit its highest level of the year after positive signs from the U.S.-China trade talks in Madrid.
• The Senate’s narrow confirmation of Stephen Miran to the Fed’s Board hands President Donald Trump’s top economic adviser a policy vote just as the FOMC convenes, while a U.S. appeals court ruling means Governor Lisa Cook can attend unless the Supreme Court intervenes. Together with Trump’s public call for a ‘bigger’ cut and his stated intent to replace Chair Jerome Powell when his term ends next May, the moves highlight the degree of political pressure now bearing down on the central bank. Ahead of a 20-year bond auction later today, long-term Treasury yields hover close to four-month lows.
• Big Tech led Wall Street gains on Monday, with Tesla shares climbing 3.6% after regulatory filings revealed CEO Elon Musk had acquired nearly $1 billion worth of the electric vehicle maker’s stock last week and Alphabet hit a record high to race past $3 trillion in market capitalization. Nvidia underperformed after China’s market regulator said it will continue an investigation into the AI chip leader after early findings showed it had violated the country’s anti-monopoly law.
Although the S&P500’s year-to-date gains of 12% are still only half of that of the MSCI world index excluding U.S. stocks, funds tracking the ‘Magnificent Seven’ megacaps are now up 16% for 2025. S&P futures were higher again ahead of Tuesday’s open.
• China’s offshore yuan hit 2025 highs even though its ebullient stock benchmarks stalled on Tuesday after U.S. and Chinese officials said they reached a framework agreement to switch short-video app TikTok to U.S.-controlled ownership – a move expected to be confirmed in a Friday call between U.S. Trump and Chinese President Xi Jinping. The Madrid talks encouraged hopes of another extension of the trade truce beyond the world’s two biggest economies beyond November. Elsewhere, data showed the British jobs market and wage growth softened ahead of this week’s Bank of England meeting and German investor morale unexpectedly strengthened in ZEW’s September update.
In today’s column, I discuss how euro zone credit markets are converging, erasing the old ‘core-periphery’ divide and reshaping the bloc’s borrowing dynamics.
Today’s Market Minute
* U.S. President Donald Trump sued the New York Times, four of its reporters, and publisher Penguin Random House for at least $15 billion on Monday, claiming defamation and libel, and citing reputational damage, a Florida court filing showed.
* U.S. and Chinese officials said on Monday they have reached a framework agreement to switch short-video app TikTok to U.S.-controlled ownership that will be confirmed in a Friday call between Trump and Chinese President Xi Jinping.
* U.S. companies should be allowed to report earnings every six months instead of on a quarterly basis, Trump said on Monday, announcing what could prove to be a major shift for corporate America.
* The U.S. labor market appears to be deteriorating rapidly just as the country’s housing market is also creaking, two negative forces that risk feeding off each other and smothering economic growth. Read the latest from ROI markets columnist Jamie McGeever.
* While U.S. corporate taxes and interest rates fell over the past 40 years, the federal deficit soared. Does that mean the federal government is now justified in taking a slice of corporate profits – and is this the tax hike the United States needs? Find out in Robinhood Markets’ Chief Investment Officer Stephanie Guild’s latest piece for ROI.
Chart of the day
In the increasingly polarized world of American politics, there is bipartisan agreement that Americans are less tolerant of opposing views than they were 20 years ago, according to the latest Reuters/Ipsos survey.
Today’s events to watch
* U.S. August import/export prices (8:30 AM EDT), August retail sales (8:30 AM EDT), August industrial production (9:15 AM EDT), September NAHB housing index (10:00 AM EDT), August business/retail inventories (10:00 AM EDT); Canada August housing starts (8:15 AM EDT), Canada Aug consumer prices (0830)
* U.S. Federal Reserve’s Federal Open Market Committee starts two-day meeting on interest rates, decision on Wednesday
* U.S. President Donald Trump visits Britain
* US Treasury sells $13 billion of 20-year bonds
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(The opinions expressed here are those of the author, a columnist for Reuters)
(by Mike Dolan; editing by Ros Russell)
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