The Trade Truce Is Extended to 10 January — but Weak Auction Demand and Williams Saying the Fed Must Hike Again Take the 30-Year to Its Highest Since June 2004
Data:
Main Theme: “A Summit Overshadowed by an Auction” — The US and China agreed to extend their trade truce by two months to 10 January, avoiding planned tariff increases. But New York Fed President John Williams said the Fed would likely need to hike again this year, debt auction demand was weak, and the 10-year touched 5.163% with the 30-year at its highest since June 2004.
Thursday delivered the summit outcome the market had been positioned for, and the bond market ignored it. Charles Schwab’s framing was exact: “Blistering Yield Rally Overshadows Trump–Xi Talks.”
The concrete deliverable came from the Treasury. Secretary Scott Bessent said the United States and China agreed to extend their trade truce by two months, until 10 January, avoiding planned tariff increases — the truce had been set to expire on 10 November. Bessent set a new early 2027 deadline for continuing trade talks. The Chinese did not immediately confirm the extension, but President Xi opened the summit with notably conciliatory remarks on trade.
The bond market went the other way. The 10-year Treasury yield climbed to 5.163% intraday, while the 30-year reached its highest level since June 2004. Schwab attributed the early selloff to “weak debt auction demand, heavy borrowing, and rising oil, among other factors,” with renewed Treasury weakness following New York Federal Reserve President John Williams saying the Fed would likely need to hike again this year.
Data gave the hawks more. Initial jobless claims fell by 1,000 to 197,000 in the week ended 19 September, below a 201,000 forecast, with continuing claims at 1.72 million. New home sales rose 6.4% in August to an annualised 684,000, well above a 615,000 consensus — suggesting housing demand is more resilient than expected despite high mortgage rates.
Equities finished mixed after trimming losses. The Dow Jones Industrial Average closed at 51,349.98, down 161.61 points (0.31%). Technology led declines on the S&P 500, with Nvidia, Broadcom and Micron each slipping more than 1%. Yahoo Finance reported the indices trimming losses as hopes of a Hormuz deal offset rising bond yields.
Oil went back above $100 after US and Iranian leaders exchanged barbs at the UN General Assembly. Iranian President Masoud Pezeshkian said Iran will not bow to threats and will not give up its right to build nuclear technology for economic development.
🟥 U.S. Equities | Mixed, With Technology Leading Declines
Sources: Reuters / Eurasia Business News / Yahoo Finance
| Index / Asset | Thursday | Level | Note |
| Dow Jones Industrials | −161.61 (−0.31%) | 51,349.98 | 6.2% below its 52-week high of 54,744.33 |
| S&P 500 / Nasdaq | Mixed; trimmed losses | — | Hopes of a Hormuz deal offset yields |
| 10-year Treasury | 5.163% intraday | — | Highest since July 2007 |
| 30-year Treasury | Highest since June 2004 | — | A new cycle extreme |
| Nvidia, Broadcom, Micron | Each −1%+ | — | Technology led S&P declines |
Reuters summarised the session: “Wall Street’s main indexes dropped on Thursday as uncertainty over prospects for a resolution to the Middle East conflict lifted oil prices and Treasury yields, keeping risk appetite in check ahead of a keenly watched US–China summit.” A potential ban of US diesel exports added to investor caution.
The Dow sitting 6.2% below its 52-week high of 54,744.33 is worth recording. The index is heavier in industrial and financial stocks sensitive to rising bond yields, and it does not include Meta, which led the technology rebound earlier this week. That composition has produced the persistent Dow–Nasdaq divergence this publication has tracked since 16 September.
Single-stock moves: MGM Resorts fell about 10% after Barry Diller’s People Inc. withdrew its buyout offer, and Darden Restaurants declined after missing first-quarter expectations. Costco reported after the bell.
Internationally, the Nikkei 225 rose 0.76% to 65,513.99 on its return from a three-day “Silver Week” holiday, while Hong Kong’s Hang Seng slipped 0.29%.
🤝 The Summit | A Two-Month Extension
Sources: Yahoo Finance / Eurasia Business News / Reuters)
The US–China summit got underway in earnest on Thursday with signals from both sides that importers may be able to count on some stability in the trading relationship for the coming few months.
| Element | Detail |
| The deliverable | Trade truce extended by two months, from 10 November to 10 January |
| What it avoids | Planned tariff increases that had been scheduled |
| Next deadline | Early 2027, per Bessent, for continuing trade talks |
| Confirmation | The Chinese did not immediately confirm the extension |
| Tone | Xi opened with notably conciliatory remarks on trade |
| Agenda | Trade, AI governance, Taiwan, Iran, critical minerals |
| State dinner | Sam Altman and Jensen Huang confirmed to attend |
The honest assessment is that this is a postponement rather than a resolution, and the market treated it as such.
A two-month extension moves a deadline from 10 November — immediately after the midterm elections — to 10 January. Bessent’s new early 2027 deadline for continuing talks pushes the substantive negotiation past both the midterms and the turn of the year.
On the AI questions this publication flagged on Wednesday, no outcome has been reported. Export controls on advanced Nvidia chips and claims of AI “distillation” were identified as major sticking points, and technology led the S&P’s declines with Nvidia, Broadcom and Micron each down more than 1%.
Michelle Gibley, director of international equity research and strategy at the Schwab Center for Financial Research, set out what a constructive outcome would look like: “The Trump–Xi meeting will focus on trade, AI safety, and Iranian crude. One positive outcome could be reciprocal tariff relief for U.S. agricultural products and Chinese low-tech consumer goods.”
She also flagged the oil dimension: China has resumed oil imports after cutting back earlier in the Iran war, and in the longer run that could mean tighter supplies if Chinese buying coincides with continued Middle East supply disruption.
🟦 The Bond Market | Williams, and a Weak Auction
Sources: Charles Schwab / Eurasia Business News / Goodreturns
The 10-year Treasury yield climbed to 5.163% intraday, and the 30-year reached its highest level since June 2004 — reinforcing investor concerns that persistently high borrowing costs could undermine stock valuations and economic growth.
Schwab identified four drivers: “Stocks fell early as yields kept climbing, stirred by weak debt auction demand, heavy borrowing, and rising oil, among other factors. Wednesday’s September S&P Global U.S. Manufacturing PMI headline helped instigate the Treasury sell-off, topping expectations.”
Two of those deserve particular attention.
Weak debt auction demand is the return of a problem this publication documented through August. A buyers’ strike in the 10- to 30-year sector ran from late June, prompting the Treasury to escalate its buyback programme three times — doubling to at least $4 billion on 19 August, signalling a $1 trillion general account on 24 August, and tripling to $6 billion on 9 September. All three failed. On 13 August the Treasury sold 30-year bonds at the highest rate in a quarter of a century.
And New York Federal Reserve President John Williams said the Fed would likely need to hike again this year. Renewed Treasury weakness followed directly.
That is the second senior official in two days, after Governor Michael Barr said on Wednesday that further tightening is likely needed — and Williams carries more weight. The New York Fed President is a permanent voter and the vice chair of the FOMC. Several more Fed speakers were scheduled on Thursday.
📰 Data | Strong Again, Which Is the Problem
Sources: Department of Labor / Census Bureau / Eurasia Business News / Yahoo Finance
| Measure | Latest | Consensus | Prior |
| Initial jobless claims (wk 19 Sept) | 197,000 | 201,000 | 198,000 (−1,000) |
| Continuing claims | 1.72m | — | 1.730m |
| New home sales (August) | 684,000, +6.4% | 615,000 | A large beat |
Eurasia Business News put the mechanism precisely: “Economic data released Thursday did not point to an immediate slowdown… Strong economic data can be positive for corporate earnings, but it can also deepen bond-market concern because it gives the Federal Reserve more room to maintain a restrictive policy stance. In the current environment, signs of economic strength have sometimes pushed yields higher rather than lifting stocks.”
The new home sales figure is the more surprising of the two. A 6.4% monthly increase to 684,000, against a 615,000 consensus, suggests housing demand is more resilient than expected despite high mortgage rates — and it arrives one week after August housing starts fell 2.6% and permits 2.7%, with multifamily starts collapsing 21.7%.
The reconciliation is that starts and permits measure builder behaviour while new home sales measure buyer behaviour. Builders are cutting back on multifamily projects financed at floating rates; buyers are still transacting in single-family, where starts rose 7.6%.
🛢️ Oil | Back Above $100 on UN Barbs
Sources: Reuters / Eurasia Business News
US and Iranian leaders exchanged barbs at the UN General Assembly this week, which sent Brent crude prices back above $100 a barrel.
Iranian President Masoud Pezeshkian made clear in his UNGA speech that Iran will not bow to threats and will not give up its right to build nuclear technology for economic development.
Price references across sources conflict and should be treated with caution. Goodreturns reported WTI down 0.4% near $92 and Brent down nearly 1% around $102 at its time of writing; other outlets referenced Brent at $105 and $106 during the session. The consistent element is that Brent is back above $100 after falling below it earlier in the week.
The reversal matters for the diplomatic reading. On Tuesday, President Trump described a “very good” meeting with Iranian envoys in New York and Brent settled near $99. Two days later the two sides are exchanging barbs at the same venue and crude is back above $100. That is the eleventh diplomatic cycle since February, and it has followed the established pattern.
📌 Reading the Session
- A two-month truce extension is a postponement, not a resolution. The 10 November deadline moves to 10 January, with substantive talks deferred to early 2027 — past both the midterms and the year-end. No outcome was reported on the AI export controls or “distillation” questions, and technology led the S&P’s declines.
- Weak debt auction demand is the return of the buyers’ strike. Combined with Williams — the FOMC vice chair — saying the Fed will likely need to hike again this year, it took the 30-year to its highest level since June 2004.
- Strong data is now reliably negative. Claims at 197,000 and new home sales up 6.4% to a large beat both deepen bond-market concern by giving the Fed room to stay restrictive. That is the third consecutive session in which good economic news sold bonds and equities.
Friday: August core PCE is expected late this month — the measure Chair Warsh named as “firm and fixed” at the 2% target.
Companies
Theme: “Chips Led the Declines Again” — Nvidia, Broadcom and Micron each slipped more than 1% as technology led the S&P lower with no AI outcome reported from the summit. MGM Resorts fell about 10% on a withdrawn buyout, and Darden missed. Costco reported after the bell.
Thursday was a second consecutive session in which the semiconductor complex underperformed, and the reason is now specific rather than general. The summit’s reported deliverable concerned tariffs; the AI questions that matter to these companies were not resolved.
💻 1. Chips Slip Again With No AI Outcome
Technology stocks led declines on the S&P 500, with chipmakers such as Nvidia, Broadcom and Micron slipping over 1% each.
The sequence over three sessions tells the story:
- Tuesday 22 Sept: the semiconductor gauge advanced for a sixth straight day, up more than 14% over five sessions, with the Nasdaq posting back-to-back record closes.
- Wednesday 23 Sept: chipmakers sank as export controls on advanced Nvidia chips and AI “distillation” claims were reported as major sticking points.
- Thursday 24 Sept: technology led S&P declines with Nvidia, Broadcom and Micron each down more than 1%.
The summit produced a tariff extension and no reported AI outcome. Investors had anticipated discussions around AI regulation, the Middle East conflict and Taiwan, with executives from top US companies also expected to meet Trump and Xi — Sam Altman and Jensen Huang confirmed for the state dinner.
Treasury Secretary Bessent and Vice Premier He Lifeng had explored establishing a protocol for sharing information about significant AI-related incidents. That is a governance mechanism rather than a commercial one, and it does not address export controls or distillation.
The positioning context remains the key risk. This publication argued on Tuesday that a constructive outcome was substantially priced after a six-session, 14% advance. Two sessions of underperformance have partially unwound that, but the sector still carries the bulk of its September gains.
🎰 2. MGM Resorts Falls 10% on a Withdrawn Offer
MGM Resorts fell about 10% after Barry Diller’s People Inc. withdrew its buyout offer.
A withdrawn bid removes a floor that had been supporting the share price, so a double-digit decline is mechanical rather than informative about the business.
But the sector context is not encouraging. On 1 September, Wynn Resorts, Las Vegas Sands, VICI Properties and Carnival all hit 52-week lows in the same session, and consumer discretionary was the worst-performing S&P sector of 2026, down 2.3% as of that date against energy up 43%.
Casino and travel operators sit at the intersection of the two pressures running through this market: discretionary household spending constrained by fuel costs and negative real earnings, and heavily leveraged balance sheets facing a 10-year above 5%. A buyer withdrawing from that sector at this point in the cycle is itself a signal about financing conditions.
🍽️ 3. Darden Misses
Darden Restaurants declined after missing first-quarter expectations.
Restaurants are the cleanest read on discretionary consumer behaviour available, because dining out is among the first categories households reduce.
The labour-market detail from the August payroll report adds context. Bars and restaurants led job creation in August, while information-related sectors lost jobs, possibly owing to AI investment. An industry adding employment while its operators miss earnings is a margin story: volumes are being maintained at the cost of profitability.
That is the same dynamic Campbell’s described on 3 September as “top-line softness and inflation-driven margin pressure,” and it is consistent with annual producer inflation at 5.4% against consumer inflation at 3.4% — a two-point gap representing costs absorbed rather than passed through.
A diesel export ban, if implemented, would raise food distribution costs directly.
🛒 4. Costco Reports Into a Bifurcated Consumer
Costco reported fiscal fourth-quarter earnings after the bell, with analysts watching for a potential special dividend and projecting earnings of $6.53 per share on $94.8 billion in revenue.
The comparable set from this reporting season has been sharply split, and the split has been about execution rather than income tier:
| Company | Result | Read |
| Dollar General (27 Aug) | EPS +33% to $2.48 vs $2.00; guidance raised | Lowest income, strong |
| Target (19 Aug) | Comps +3.8%, traffic +3.6% | Mass market, strong |
| Walmart (20 Aug) | US comps +2.6% vs 3.8% expected; ticket +1.1% | Missed |
| Dick’s (25 Aug) | Worst day on record; profit guidance cut | Mid-market discretionary |
| Campbell’s (3 Sept) | −8%+: “top-line softness and inflation-driven margin pressure” | Staples squeezed |
| Darden (24 Sept) | Missed Q1 | Discretionary dining |
Costco’s membership model makes it the most insulated of these, since renewal income is contractual rather than transactional. The line to watch is traffic against average ticket — the same split that exposed Walmart, where ticket grew just 1.1% against 3.4% inflation.
General
Thursday, September 24th, 2026: The Auction Mattered More Than the Summit
The United States and China agreed to extend their trade truce by two months to 10 January, avoiding planned tariff increases, and President Xi opened the summit with conciliatory remarks on trade. The 30-year Treasury yield reached its highest level since June 2004.
Charles Schwab’s headline captured the hierarchy: “Blistering Yield Rally Overshadows Trump–Xi Talks.”
- What the Truce Extension Actually Delivers
Treasury Secretary Scott Bessent said the US and China agreed to extend their current trade truce — set to expire in November — by two months, until 10 January, avoiding planned tariff increases, with a new early 2027 deadline for continuing trade talks. The Chinese did not immediately confirm the extension.
Three observations.
The timing is politically legible. A 10 November expiry fell immediately after the midterm elections. Moving it to 10 January removes a tariff escalation from the electoral calendar entirely, and deferring substantive talks to early 2027 pushes the negotiation past both the midterms and the year-end.
It is a removal of a downside rather than delivery of an upside. The extension avoids planned tariff increases; it does not reduce existing tariffs. Michelle Gibley of the Schwab Center for Financial Research described what an actual positive would have looked like: “reciprocal tariff relief for U.S. agricultural products and Chinese low-tech consumer goods.” That was not reported.
And the AI questions were not resolved. Export controls on advanced Nvidia chips and claims of AI “distillation” had been reported as major sticking points, and technology led the S&P’s declines with Nvidia, Broadcom and Micron each down more than 1%. Bessent and Vice Premier He Lifeng had explored a protocol for sharing information about significant AI-related incidents — a governance mechanism that addresses neither commercial issue.
For agricultural exporters the extension is meaningful, given that US farmers have been squeezed by record diesel prices at harvest. For the semiconductor complex it delivers nothing.
- The Buyers’ Strike Has Returned
Schwab identified weak debt auction demand as a driver of Thursday’s selloff, alongside heavy borrowing and rising oil. The 10-year reached 5.163% intraday and the 30-year its highest since June 2004.
This is the problem that dominated August returning in a more severe form, and the full sequence is worth restating because it demonstrates that no deployed tool has worked.
| Date | Event | Outcome |
| Late June onward | Buyers’ strike in the 10- to 30-year sector | Persistent |
| 13 Aug | Treasury sold 30-year bonds at the highest rate in a quarter of a century | — |
| 19 Aug | Buybacks doubled to at least $4bn | Retraced within two sessions |
| 24 Aug | $1 trillion general account signalled | Faded |
| 9 Sept | Buyback tripled to $6 billion | Yields rose |
| 15 Sept | — | 10-year above 5% for the first time since 2007 |
| 23 Sept | Hot flash PMI with multi-year highs in input and output prices | 10-year 5.135% |
| 24 Sept | Weak auction demand; Williams says the Fed must hike again | 10-year 5.163%; 30-year highest since June 2004 |
The 30-year at its highest since June 2004 is the more significant of the two levels. It is a term-premium measure rather than a policy-expectations measure, and it reflects what investors demand to fund a deficit against $40 trillion of federal debt in an environment of persistent inflation.
The global context worsened on Wednesday: total debt reached a record $365 trillion in the first half of 2026, with advanced economies spending more than $3.5 trillion on interest payments on internationally traded bonds over twelve months.
- Williams Is the Most Consequential Speaker Yet
New York Federal Reserve President John Williams said the Fed would likely need to hike again this year, and renewed Treasury weakness followed directly.
This matters more than Wednesday’s comments from Governor Barr, for an institutional reason. The New York Fed President is a permanent voting member of the FOMC and serves as its vice chair — the only regional president with a standing vote. His positioning is conventionally read as close to the committee’s centre.
Two senior officials in two days is now a pattern rather than a data point:
- Wednesday: Governor Michael Barr said further tightening is likely needed to bring down sticky inflation — a hardening from his pre-meeting description of the labour market as merely “stable.”
- Thursday: President Williams said the Fed would likely need to hike again this year.
Several more Fed speakers were scheduled on Thursday, and the communications blackout ended on 17 September.
Set this against the 16 September projections: 16 of 18 officials expected at least one more increase this year, with a median year-end rate of 4.1%. The commentary is now actively reinforcing that median rather than qualifying it — which is why October hike odds reached 70% on Wednesday.
The one remaining ambiguity is the Chair. Warsh has withheld his own dot for two consecutive projection releases, meaning the 4.1% median excludes him.
- Good Data Is Now Reliably Bad News
Thursday produced two strong releases and both weighed on markets.
Initial jobless claims fell by 1,000 to 197,000 against a 201,000 forecast, with continuing claims at 1.72 million. New home sales rose 6.4% in August to an annualised 684,000, well above a 615,000 consensus.
Eurasia Business News articulated the mechanism: “Strong economic data can be positive for corporate earnings, but it can also deepen bond-market concern because it gives the Federal Reserve more room to maintain a restrictive policy stance. In the current environment, signs of economic strength have sometimes pushed yields higher rather than lifting stocks.”
This is now a three-session pattern:
| Date | Data | Market response |
| 23 Sept | Flash PMI strongest in five years, with multi-year highs in input and output prices | S&P −0.75%; 10-year to 5.135% |
| 24 Sept | Claims 197,000; new home sales +6.4%, a large beat | Yields higher; 30-year to a 2004 high |
The new home sales figure deserves separate attention because it complicates the housing narrative. Starts fell 2.6% and permits 2.7% in the data released on 17 September, with multifamily starts collapsing 21.7%. But sales rose 6.4% to a large beat.
The reconciliation is that those series measure different actors. Starts and permits measure builders, who are cutting multifamily projects financed at floating rates against a 30-year at a 2004 high. New home sales measure buyers, who are still transacting in single-family — where starts rose 7.6%.
For the Fed, resilient housing demand at these mortgage rates is evidence that policy is not yet restrictive — which is precisely the argument Warsh made at Jackson Hole when he said financing conditions “didn’t look restrictive.”
- The Eleventh Diplomatic Cycle
US and Iranian leaders exchanged barbs at the UN General Assembly this week, sending Brent crude back above $100. Iranian President Masoud Pezeshkian said Iran will not bow to threats and will not give up its right to build nuclear technology for economic development.
Two days earlier, President Trump described a “very good” meeting with US officials and Iranian envoys in New York, and Brent settled near $99.
This publication noted on Tuesday that the direct meeting was structurally different from the ten prior claims, because Iran had explicitly ruled out direct talks on 10 August and every subsequent claim was relayed through Oman. That assessment stands — direct contact did occur. But the cycle has run its familiar course within forty-eight hours.
The physical position remains the anchor and has not changed. The durable part of this month’s oil decline was the restored pipeline reported on 17 September, which moves barrels without passing through the Strait. No minesweeping has been reported since the IRGC said on 2 September that tankers struck naval mines on an “illegal route.”
And a new supply-side factor is emerging from the summit. Michelle Gibley of Schwab noted that China has resumed oil imports after cutting back earlier in the Iran war, and that in the longer run this could mean tighter supplies if Chinese buying coincides with continued Middle East disruption. A returning marginal buyer is bullish crude independently of the diplomacy.
📊 Global Macro Sentiment Summary — Thursday, September 24th, 2026
| Narrative Channel | Core Fundamental Trigger | Net Portfolio Posture |
| Trade | US–China truce extended two months to 10 January, avoiding planned tariff increases; new early 2027 deadline | 🟨 A postponement, not a resolution |
| Summit — AI | No reported outcome on Nvidia export controls or “distillation” | 🟥 Chips led S&P declines |
| Index Structure | Dow −161.61 (−0.31%) to 51,349.98; indices mixed after trimming losses | 🟥 6.2% below the 52-week high |
| Rates | 10-year 5.163% intraday; 30-year highest since June 2004 | 🟥 Term premium extreme |
| Auction | Weak debt auction demand cited by Schwab, alongside heavy borrowing | 🟥 Buyers’ strike returns |
| Fed | Williams — FOMC vice chair — says the Fed will likely need to hike again this year | 🟥 Second senior official in two days |
| Labour | Claims 197,000 vs 201,000 expected; continuing claims 1.72m | 🟥 Strong = hawkish |
| Housing | New home sales +6.4% to 684,000 vs 615,000 expected | 🟥 Demand resilient at high rates |
| Energy | Brent back above $100 after US–Iran barbs at the UNGA | 🟥 Eleventh diplomatic cycle |
| Single stocks | MGM −10% on a withdrawn buyout; Darden missed Q1; Costco reported after the bell | 🟥 Discretionary weak |
| International | Nikkei +0.76% to 65,513.99 on return from holiday; Hang Seng −0.29% | 🟨 Mixed |
Compliance and framing notes. The Chinese side did not immediately confirm the truce extension — attribute it to Treasury Secretary Bessent. Oil price references conflicted across sources during the session, from around $102 to $106 on Brent; the consistent element is that it is back above $100. And note that no AI-related outcome was reported from the summit at the time of writing.
Upcoming News
Friday, September 25th, 2026 — Theme: “Core PCE, and the Measure Warsh Named” — August core PCE is expected as the month closes, with the 30-year at its highest since June 2004, October hike odds at 70%, and two senior Fed officials having called for further tightening this week.
Friday closes a week in which the bond market overwhelmed every other narrative. August core personal consumption expenditures inflation — the measure Chair Warsh explicitly named as “firm and fixed” at the 2% target — is expected late this month. It is the first reading of the Fed’s primary gauge since the committee raised rates on 16 September and revised its own end-2026 core PCE forecast up to 3.4% from 3.3%.
🔴 Calendar — Friday, September 25th, 2026
Times in ICT (Hanoi). ET is ICT minus 11 hours.
| Time (ICT) | Currency | Event / Indicator | Consensus | Impact |
| 19:30 | USD | August Core PCE Price Index (date to confirm) | July: 3.3% YoY | 🔴 High |
| 19:30 | USD | Personal Income and Spending (August) | — | 🔴 High |
| 21:00 | USD | University of Michigan Consumer Sentiment — September final | — | 🟠 Med |
| Any time | USD | Fed speakers | — | 🔴 High |
| 00:00 (Sat) | USD | Baker Hughes Rig Count | — | 🟢 Low |
| 30 Sept | — | Quarter-end | — | 🟠 Med |
| 14 Oct | USD | September CPI | — | 🔴 High |
The core PCE release date was not confirmed across providers at the time of writing — verify against your own terminal.
- Why Core PCE Carries More Weight Than Usual
Three reasons.
It is the measure the Chair named. At Jackson Hole on 28 August, Warsh said the 2% PCE target is “firm and fixed.” Core CPI was 2.4% annually at the last reading while core PCE was 3.3% in July — a gap that has run all year, and Warsh’s framing indicates which one binds.
The committee raised its own forecast while tightening. The 16 September projections put median core PCE at 3.4% by end-2026, up from 3.3% in June — an explicit acknowledgement that policy is not expected to reach target this year.
And it is the first reading of the primary gauge since the hike. With Williams and Barr both calling for further tightening this week and October odds at 70%, a hot print would effectively confirm the October move.
The standing caveat applies: August data was compiled when Brent averaged near $88. September CPI on 14 October is the first consumer reading to capture triple-digit crude, and it arrives before an October FOMC.
- Carry-Over Into Friday
- The US and China agreed to extend their trade truce by two months to 10 January, avoiding planned tariff increases, with a new early 2027 deadline; the Chinese did not immediately confirm.
- The 10-year Treasury yield climbed to 5.163% intraday and the 30-year reached its highest level since June 2004, on weak debt auction demand, heavy borrowing and rising oil.
- New York Fed President John Williams said the Fed would likely need to hike again this year, a day after Governor Barr said further tightening is likely needed.
- Initial jobless claims fell to 197,000 against a 201,000 forecast; new home sales rose 6.4% in August to 684,000 against a 615,000 consensus.
- The Dow closed at 51,349.98, down 161.61 points (0.31%), 6.2% below its 52-week high. Technology led S&P declines with Nvidia, Broadcom and Micron each down more than 1%.
- Brent moved back above $100 after US and Iranian leaders exchanged barbs at the UN General Assembly. MGM Resorts fell about 10%; Darden missed; Costco reported after the bell.
- The Quarter Closes Next Week
| Theme | Where it stands | What to watch |
| Long end | 30-year highest since June 2004; weak auction demand | Whether auctions improve; any Treasury response |
| Fed path | October odds 70%; Williams and Barr both hawkish | August core PCE; further speakers |
| Trade | Truce extended to 10 January; AI unresolved | Chinese confirmation; any AI announcement |
| Energy | Brent back above $100; China resuming imports | Whether the pipeline relief resumes |
| Quarter-end | Window dressing under way | Rotation between falling energy and recovering tech |
The honest summary of the week: the market got the summit outcome it wanted and sold off anyway, because the bond market is now the binding constraint on everything else.
Compliance note: the core PCE release date was not confirmed across providers — verify against your own terminal. Fed speakers may appear without advance notice. And the Chinese side had not confirmed the truce extension at the time of writing.
Snapshot
Thursday, September 24th, 2026 — Theme: “Truce Extended, Yields Higher Anyway” — The US and China extended their trade truce to 10 January, but weak auction demand and New York Fed President Williams saying the Fed must hike again took the 10-year to 5.163% and the 30-year to its highest since June 2004. Claims and new home sales both beat, which made it worse.
Thursday produced the summit deliverable the market had been positioned for and sold off regardless. A two-month extension of the US–China trade truce, avoiding planned tariff increases, was overshadowed entirely by a bond market where auction demand was weak, borrowing is heavy, and a second senior Federal Reserve official in two days called for further tightening. Strong jobless claims and a large beat in new home sales deepened the problem rather than relieving it.
🏛️ The Bottom Line
Sources: Charles Schwab / Reuters / Yahoo Finance / Eurasia Business News
US stocks ended mixed on Thursday as the Treasury selloff intensified and government-bond yields reached fresh multi-decade highs. The 10-year Treasury yield climbed to 5.163% intraday, while the 30-year yield reached its highest level since June 2004, reinforcing investor concerns that persistently high borrowing costs could undermine stock valuations and economic growth. The Dow Jones Industrial Average closed at 51,349.98, down 161.61 points or 0.31% from Wednesday’s 51,511.59, about 6.2% below its 52-week high of 54,744.33.
Charles Schwab: “Dismal bond performance that sank stocks yesterday spilled into Thursday, offering no relief to investors exhausted by months of steadily rising yields. Stocks fell early as yields kept climbing, stirred by weak debt auction demand, heavy borrowing, and rising oil, among other factors. Wednesday’s September S&P Global U.S. Manufacturing PMI headline helped instigate the Treasury sell-off, topping expectations. Renewed Treasury weakness followed New York Federal Reserve Chief John Williams saying the Fed would likely need to hike again this year.”
Treasury Secretary Scott Bessent announced that the US and China would extend their current trade truce — set to expire in November — by two months, until 10 January, avoiding planned tariff increases, as he set a new early 2027 deadline for continuing trade talks. The Chinese did not immediately confirm the extension, but Chinese President Xi Jinping opened the summit with notably conciliatory remarks on trade. Investors anticipated discussions around AI regulation, the Middle East conflict and Taiwan, with executives from top US companies also expected to meet Trump and Xi; Sam Altman and Jensen Huang were confirmed for the state dinner.
Initial jobless claims fell by 1,000 to 197,000 in the week ended 19 September, below the 201,000 forecast and near historically low levels, with continuing claims totalling 1.72 million. New home sales rose 6.4% in August to an annualised rate of 684,000, well above the 615,000 consensus, suggesting housing demand remains more resilient than expected despite high mortgage rates.
Reuters: “Wall Street’s main indexes dropped on Thursday as uncertainty over prospects for a resolution to the Middle East conflict lifted oil prices and Treasury yields, keeping risk appetite in check ahead of a keenly watched US–China summit. US and Iran leaders exchanged barbs at the UN General Assembly this week, which sent Brent crude prices back to above $100 a barrel. A potential ban of US diesel exports added to investor caution. Technology stocks led declines on the S&P 500, with chipmakers such as Nvidia, Broadcom and Micron slipping over 1% each.”
Iranian President Masoud Pezeshkian said at the UN General Assembly that Iran will not bow to threats and will not give up its right to build nuclear technology for economic development.
Michelle Gibley, director of international equity research and strategy at the Schwab Center for Financial Research: “The Trump–Xi meeting will focus on trade, AI safety, and Iranian crude. One positive outcome could be reciprocal tariff relief for U.S. agricultural products and Chinese low-tech consumer goods.” She noted China has resumed oil imports after cutting back earlier in the Iran war, which in the longer run could mean tighter supplies if Chinese buying coincides with continued Middle East supply disruption.
MGM Resorts fell about 10% after Barry Diller’s People Inc. withdrew its buyout offer, and Darden Restaurants declined after missing first-quarter expectations. Costco reported fiscal fourth-quarter earnings after the bell, with analysts projecting $6.53 per share on $94.8 billion in revenue. The Nikkei 225 rose 0.76% to 65,513.99 on its return from a three-day holiday, while Hong Kong’s Hang Seng slipped 0.29%.
📉 Reference Levels for the Friday Open (September 25th)
Derived from recent session closes and range extremes — not vendor-published levels. Verify against your own charts.
| Asset | Support | Resistance | Operational Bias |
| Dow Jones | 51,349 → 51,000 | 51,511 → 52,048 | 🟥 6.2% below the 52-week high |
| S&P 500 | 7,650 → 7,600 | 7,706 → 7,798.99 (record) | 🟥 Tech led declines |
| Nasdaq Composite | 26,522 → 26,000 | 26,936 → 27,122 | 🟥 Chips −1%+ |
| US 10Y Yield | 5.10% → 5.045% | 5.163% → 5.25% | 🟥 Weak auction demand |
| US 30Y Yield | 5.40% | Highest since June 2004 | 🟥 Term premium extreme |
| US 2Y Yield | 4.55% | 4.75%+ | 🟥 October odds 70% |
| Brent Crude | $100 → $96 | $105 → $108 | 🟥 Back above $100 |
| WTI Crude | $90 | $95 → $100 | 🟥 — |
| Nikkei 225 | 65,000 | 65,513.99 | 🟩 Back from holiday |
📊 Market Sentiment & Bias
Rates: 🟥 A new cycle extreme. The 30-year at its highest since June 2004 and the 10-year at 5.163% intraday, on weak auction demand and heavy borrowing. The buyers’ strike that survived three Treasury buyback escalations has returned.
Fed: 🟥 Two senior officials in two days. Williams — a permanent voter and FOMC vice chair — said the Fed will likely need to hike again this year, after Barr on Wednesday. October odds at 70%.
Trade: 🟨 A postponement. The truce extends to 10 January, avoiding planned increases but reducing nothing, with substantive talks deferred to early 2027. No AI outcome reported.
Data: 🟥 Strong, therefore negative. Claims at 197,000 and new home sales up 6.4% both give the Fed room to stay restrictive.
Energy: 🟥 The cycle turned again. Brent back above $100 within forty-eight hours of a “very good” meeting, after UNGA barbs. China resuming imports is a new bullish factor.
Equities: 🟥 Technology led declines for a second session, with no AI resolution from the summit.
💡 Top Trade Takeaway: “The Bond Market Is Now the Binding Constraint”
Focus: Treat the long end as the primary variable for everything else, given that a favourable summit outcome could not offset it. Recognise the truce extension as a removal of downside rather than a positive catalyst. Expect strong data to remain negative for equities. Watch August core PCE as the first reading of the measure Warsh named since the hike.
Logic. Thursday was the clearest possible demonstration of what now governs this market. The United States and China agreed to extend their trade truce by two months to 10 January, avoiding planned tariff increases, and President Xi opened the summit with conciliatory remarks. That is the outcome equities had been positioned for. Stocks finished mixed after trimming losses, technology led the S&P lower, and the 30-year Treasury yield reached its highest level since June 2004. Charles Schwab’s headline — “Blistering Yield Rally Overshadows Trump–Xi Talks” — is the accurate hierarchy.
The bond move had a specific and worrying composition. Schwab cited “weak debt auction demand, heavy borrowing, and rising oil.” Weak auction demand is the return of the buyers’ strike that ran in the 10- to 30-year sector from late June and survived every tool deployed against it: buybacks doubled to at least $4 billion on 19 August and retraced within two sessions, a $1 trillion general account signalled on 24 August that faded, and a tripling to $6 billion on 9 September after which yields rose. On 13 August the Treasury sold 30-year bonds at the highest rate in a quarter of a century. The 30-year is now at a 2004 high.
New York Federal Reserve President John Williams then said the Fed would likely need to hike again this year, and renewed Treasury weakness followed directly. That carries more institutional weight than Governor Barr’s similar comment on Wednesday: Williams is a permanent voting member and vice chair of the FOMC, conventionally read as close to the committee’s centre. Two senior officials in two days, with October hike odds at 70%, is the commentary actively reinforcing the 16 September median of one further increase rather than qualifying it.
The data made it worse by being good. Initial jobless claims fell to 197,000 against a 201,000 forecast, and new home sales rose 6.4% in August to 684,000 against a 615,000 consensus — housing demand resilient despite high mortgage rates, which is direct evidence for Warsh’s Jackson Hole claim that financing conditions “didn’t look restrictive.” As Eurasia Business News put it, strong data “gives the Federal Reserve more room to maintain a restrictive policy stance,” so it pushes yields higher rather than lifting stocks. That is now three consecutive sessions.
On the summit itself, the assessment should be measured. A two-month extension removes a downside — planned tariff increases — without delivering an upside, since existing tariffs are unchanged and Michelle Gibley’s described positive of “reciprocal tariff relief for U.S. agricultural products and Chinese low-tech consumer goods” was not reported. And the AI questions that matter most to the semiconductor complex — export controls on advanced Nvidia chips and claims of “distillation” — produced no reported outcome, which is why technology led declines for a second session.
Calendar discipline: Friday 25 September — August core PCE expected, the measure Warsh named as “firm and fixed” at the 2% target, against a committee forecast raised to 3.4% for end-2026; personal income and spending; the final September Michigan reading; more Fed speakers. 30 September — quarter-end. 14 October — September CPI, the first consumer reading to capture triple-digit crude, arriving before an October FOMC now carrying 70% hike odds.
📚 Full Source Citations
Sources consulted for this edition.
| Publication | Item | Link |
| Charles Schwab | “Blistering Yield Rally Overshadows Trump–Xi Talks” — weak auction demand, Williams comments, PMI as selloff trigger | schwab.com/learn/story/stock-market-update-open |
| Reuters (via Lufkin Daily News) | “Wall St slips as Middle East uncertainty lifts oil; Trump–Xi talks in focus” — session summary, chip declines, diesel ban caution | lufkindailynews.com/news_reuters/business/wall-st-slips-as-middle-east-uncertainty-lifts-oil-trump-xi-talks-in-focus |
| Yahoo Finance | “Dow, S&P 500, Nasdaq trims losses as hopes of Hormuz deal offset rising bond yields” — jobless claims, truce extension detail, Xi remarks | finance.yahoo.com/markets/live/stock-market-today-thursday-september-24-dow-sp-500-nasdaq-080352893.html |
| Eurasia Business News | “Bond Selloff Worsens as 10-Year Treasury Yield Climbs Above 5.1%” — 10-year at 5.163%, 30-year since June 2004, new home sales, strong-data mechanism | eurasiabusinessnews.com/2026/09/24/stock-market-today-bond-selloff-worsens-as-10-year-treasury-yield-climbs-above-5-1-dow-jones-falls-by-0-3-oil-price-at-105/ |
| BBN Times | “Dow Jones Today: DJIA Falls to 51,349.98” — Dow close and 52-week high context, MGM, Darden, Bessent on the 10 January truce, Asian markets | bbntimes.com/global-economy/dow-jones-today-djia-falls-to-51-349-98-as-5-treasury-yields-and-106-brent-weigh-on-blue-chips |
| Goodreturns | “US Stock Market Falls Ahead Of Trump-Xi Meeting” — PMI detail (strong new orders, multi-year highs in input and output price inflation), Michelle Gibley commentary, Pezeshkian UNGA remarks | goodreturns.in/news/us-stock-market-falls-trump-xi-meeting-thursday-dow-jones-nasdaq-sp500-wall-street-outlook-futures-1536911.html |
| US Department of Labor | Weekly initial and continuing jobless claims, week ended 19 September | dol.gov |
| US Census Bureau | August new residential sales | census.gov |
The report belongs to The Concept Trading and Van Hung Nguyen