Markets had a good Monday with oil sliding, yields easing and chipmakers surging.
It's against that backdrop that things build toward Thursday with Chinese leader Xi Jinping's arrival in Washington for his second meeting with U.S. President Donald Trump this year.
What you need to know today
AI-linked stocks powered another rally on Wall Street, with equities climbing as oil prices and Treasury yields both slipped.
The S&P 500 climbed 1.5%, its best day since early August, while the Nasdaq Composite jumped 2.3% to its first closing record since June, driven by a rush into chipmakers. The Dow added a more modest 0.7%.
Crude oil pulled back below $100 briefly, with West Texas Intermediate futures dropping 4.5% to $95.78 a barrel and international Brent touching a session low of $98.98 before settling at $100.34, reducing an inflation worry that had pressured the market for weeks.
Treasury yields retreated from a two-decade high as traders pared bets on further Fed tightening after last month's rate hike. Stock futures were little changed in early trading.
Trump signaled that he was open to meeting Iranian President Masoud Pezeshkian on the sidelines of the UN General Assembly this week, though Tehran hasn't confirmed reciprocal interest. Trump has also kept sanctions and military options on the table, but the prospect of talks, plus signs that Saudi Arabia's East-West pipeline disruption was less severe than feared, was enough to strip out the war premium.
Bitcoin pushed above $86,000 on Monday, briefly touching $86,349.90, its highest level since late January, extending a sharp rally in recent days, though it remains well below its October 2025 peak of $126,000.
Bitwise CIO Matt Hougan called the move the start of "crypto spring," while BTIG flagged $90,000 as the next test if the $75,000 support level holds — a debate playing out even as the Senate has stalled the Clarity Act that would give the asset class a regulatory framework.
Five flashpoints as Trump and Xi meet
Xi is expected to arrive at Joint Base Andrews at 4 p.m. Wednesday — only the second foreign leader Trump has personally met at the airport this term, after Vladimir Putin in August 2025 — with a state dinner set for Thursday at the White House.
But the substance may prove narrower than the pageantry. Analysts expect the two leaders to extend the trade truce reached in Busan, South Korea, last October, and stand up a "Board of Trade" for non-sensitive goods, while a parallel investment framework has seen little progress.
Chinese AI labs have narrowed the gap with their U.S. rivals this year. That further boost Beijing's confidence since China became the first major economy to retaliate against the Trump administration's "Liberation Day" tariffs in April 2025, and has added a new item to Washington's list of concerns: staying ahead of China in the AI race.
A slew of U.S. CEOs are expected to attend Trump's state dinner for Xi, while the U.S. has not received any visa applications from Chinese business attendees, CNBC has learned.
Meanwhile, discussion of Taiwan is expected to take a back seat to Iran.
Washington breaks from the AI consensus
Washington's message to AI developers is blunt: they own the downside of rapidly advancing models. Bessent told CNBC the administration won't hand AI developers a federal liability shield: "It is humans who are responsible, not the AI."
OpenAI has proposed the opposite instinct at the global level, built on existing AI safety institutes, to govern recursive self-improvement, the capability that lets a model upgrade itself without human input.
"Navigating this transition safely requires alignment research to keep pace with these capabilities so that the systems we and others build remain aligned with human values and under human control," the company said in a blog post.
Elsewhere: pharma and autos deliver
Eli Lilly CEO Dave Ricks told CNBC that hundreds of thousands of seniors have started GLP-1 treatment since Medicare's obesity-drug coverage opened in July, with Lilly capturing about seven in ten of them.
Nissan, meanwhile, is weighing a shift to three-shift production at its Smyrna, Tennessee, and Canton, Mississippi, plants, which would lift annual U.S. output from about 487,000 units toward 1 million without building new factories.
Thursday will tell us whether Washington and Beijing can match Monday's market mood. Oil and chip stocks don't write trade deals.
— Anniek Bao
And finally...
Here's what the Saudi East-West pipeline shutdown means for Asia's biggest crude importers
The shutdown of Saudi Arabia's East-West pipeline stands to squeeze already-scarce crude supply for Asia's four biggest crude importers, with South Korea appearing the most directly exposed.
Saudi crude accounted for 34.1% of South Korean crude imports in July, according to the Korea International Trade Association. It's at 27.3% of imports into Japan, government data show, and 14.9% of China's imports, according to customs data. For India, the figure is 10.2%, Kpler data show.
While Asian markets' dependence on Saudi crude do not directly translate into the number of barrels exposed to the pipelines shutdown, export constraints at the Hormuz Strait have shifted a substantial volume of the Kingdom's exports westward to the pipeline-linked Yanbu port.
— Matthew Tan
