Trump & Xi Meet While Oil & Bond Yields Rise

• Oil prices climbed to $93/bbl (WTI) and $105/bbl (Brent), matching levels from mid-March during early U.S. and Israeli strikes on Iran
• The 10-year Treasury yield hit 5.12%, the highest in 20 years, sitting 110 basis points above the current Fed funds rate
• Initial jobless claims dropped to 197K with continuing claims at 1.719 million, both near six-decade lows, demonstrating a 'low hire/low fire' labor market

Market Summary: Trump-Xi Meeting, Rising Oil Prices & Bond Yields

Key Developments

High-Level Diplomatic Meeting: President Trump meets with Chinese President Xi Jinping in Washington on Thursday, September 24th, 2026, to discuss the 18-month tariff war, oil supply security amid the 7-month Iran conflict, and AI implications for the global order. This informal summit aims for a "meeting of the minds" rather than formal agreements.

Market Indicators

Energy: Oil prices surge significantly with WTI crude at $93/barrel and Brent crude at $105/barrel—levels last seen in mid-March during U.S.-Israeli strikes on Iran. These mark the highest prices since June 2022 when Brent reached $119/barrel following Russia's Ukraine invasion.

Fixed Income: The 10-year Treasury yield reached 5.12%, a two-decade high, reflecting strain from global oil supply disruptions. The 2-year yield hovers around 4.86%, narrowing the spread to just 20 basis points. Current Fed funds rate trails the 2-year by 86 bps and the 10-year by 110 bps, potentially forcing Fed action at the October FOMC meeting.

Economic Data

Employment: Weekly jobless claims remain near six-decade lows at 197K initial claims and 1.719 million continuing claims, reflecting the persistent "low hire/low fire" labor market.

Housing: New home sales for August expected at 618K units, up from 607K previously.

Corporate Earnings

Darden Restaurants (DRI) missed Q1 estimates with $2.05 per share. Costco (COST) reports fiscal Q4 results after close, with expectations of 10%+ year-over-year growth in both earnings ($6.48 per share expected) and revenue.