Oracle Wobbles on U.S. Data-Center Construction Delays: What to Watch Before the Open

1. Treasury Yields Extend Surge as Higher-for-Longer Fears Build

U.S. Treasury yields kept rising on Sept. 24 after the 10-year yield touched its highest level in 19 years. Strong U.S. economic data, hawkish Federal Reserve commentary and elevated oil prices combined to drive the move.

S&P Global’s September purchasing managers’ index showed services PMI at 58.7, the highest in about five years. Manufacturing PMI rose to 56.7, its strongest level in more than four years. A reading above 50 signals expansion.

Markets are increasingly betting the Fed could raise rates again if the economy remains strong. CME Group’s FedWatch data showed interest-rate futures pricing in about a 70% chance of an additional increase at the October Federal Open Market Committee meeting.

Fed Governor Michael Barr said further policy adjustment will probably be needed to bring inflation back to target. Deutsche Bank said strong PMI data and a rebound in oil prices were fueling expectations of faster rate increases.

Oil prices remained elevated. Brent crude futures traded at $103.66 a barrel, while November West Texas Intermediate crude futures traded at $92.68 a barrel.

The global bond selloff also continued. Japan’s 10-year government bond yield rose to 3.055%, the highest since August 1996. Yields on U.K. gilts and German bunds also moved higher.

The Institute of International Finance said global debt rose by $10 trillion in the first half of the year, topping a record $365 trillion. It said major economies including the U.S., Japan, France and the U.K. are facing large fiscal deficits and rising interest costs.

2. Trump-Xi Summit May Extend Trade Truce, but Major Deal Remains Elusive

President Donald Trump is set to welcome Chinese President Xi Jinping to the White House on Sept. 24. The two leaders are poised to signal a desire to stabilize ties, but widening disputes over Taiwan, AI and advanced technology are clouding the prospects for a major agreement.

The meeting will be the leaders’ second this year. It will also mark Xi’s first visit to Washington in more than a decade. Trump personally greeted Xi a day earlier at Joint Base Andrews.

Xi said in an arrival statement that the U.S. and China should be partners rather than rivals, emphasizing peaceful coexistence. Both leaders have economic and political reasons to seek more stable ties. Trump is confronting war in Iran and the November midterm elections, while Xi faces slower growth, weak domestic demand and youth unemployment.

China enters the talks with exports rising and with control over rare-earth supply chains. Rare earths are critical minerals used in semiconductors, electric vehicles and weapons systems. That grip on supply chains could bolster Beijing’s negotiating leverage.

The clearest outcome may be an extension of the trade truce. Treasury Secretary Scott Bessent said the two sides agreed to extend the deadline for their existing trade deal to Jan. 10 next year. The U.S. had sought a three- to six-month extension, while China wanted a longer one, according to people familiar with the matter.

China’s purchases of U.S. farm goods and non-tariff barriers could also be discussed. China has fulfilled about half of its pledge to buy 25 million tons of U.S. soybeans this year, but progress on additional commitments to purchase American agricultural products has been slow.

Taiwan remains a central issue. Xi is expected to ask Trump to halt U.S. arms sales to Taiwan. China has also floated the possibility of using its influence with Iran in return, according to people familiar with the matter.

The two sides could also discuss an AI hotline aimed at preventing dangerous AI incidents from escalating into conflict between states. Still, meaningful cooperation will be hard to achieve given the intensity of the technology rivalry.

Guests expected at the state dinner include Apple Chief Executive Officer Tim Cook, Amazon founder Jeff Bezos, Alphabet CEO Sundar Pichai, OpenAI CEO Sam Altman, Tesla CEO Elon Musk and Nvidia CEO Jensen Huang. The U.S. is also likely to keep in place export controls on advanced technology that China wants eased.

3. Record U.S. Diesel Prices Expose White House Split Over Export Curbs

The Trump administration is weighing possible restrictions on diesel exports after U.S. retail diesel prices hit a record. But concern is also growing that curbs could backfire by prompting refiners to cut output and pushing global prices higher, which could eventually lift domestic prices again.

AAA data showed the U.S. average retail diesel price reached a record $6.52 a gallon this week.

Energy Secretary Chris Wright has warned oil-industry executives to prepare for possible curbs on diesel exports, according to reports. Other media outlets reported that Trump had directed relevant agencies to review the option.

Opinion inside the administration is divided. Wright and Interior Secretary Doug Burgum have warned about the side effects of an export ban, according to people familiar with the matter. Agriculture Secretary Brooke Rollins supports export limits, while Bessent opposes them.

The policy review comes with the November midterm elections approaching. Diesel is widely used in farm equipment and freight trucks. Rising diesel costs can feed through to transportation charges and grocery prices, affecting household inflation across the U.S.

The refining industry says blanket export restrictions could lead to inventory buildups and production cuts. If refining margins shrink, companies would have a stronger incentive to reduce output, potentially leading to tighter U.S. supply and another rise in prices.

A tighter global diesel market could also send international prices higher. That has raised concern that once export restrictions are lifted, U.S. diesel prices could jump even more sharply.

Wright said he is seeking ways to increase domestic diesel supply in cooperation with the industry rather than impose a full export ban. The White House also denied a report that it was drafting a plan to ban diesel exports for 90 days. Even so, internal discussions over possible restrictions may continue.

4. S&P 500 Sits Near a Record, but Only a Few Stocks Are Doing the Heavy Lifting

The S&P 500 remains close to an all-time high, but the market’s gains have been concentrated in a small group of big technology and semiconductor stocks.

On Sept. 23, the S&P 500 closed 0.44% below its record closing high. Yet 52% of the index’s members were trading below their 200-day moving average. That gauge reflects about 10 months of average pricing, and trading below it signals weak long-term momentum.

In other words, the index remains elevated even though more than half of its constituents are showing weakness. Recent gains have been led by large technology names such as Meta Platforms and chipmakers including Micron Technology.

Dow Jones Market Data said this was the first time since March 27, 2000, that the S&P 500 traded within 1% of a record high while more than half of its members were below their 200-day moving averages. At that time, the dot-com bubble was nearing its peak.

That alone does not prove the current market is in a bubble. AI-linked megacaps have not risen on enthusiasm alone. Demand for cloud computing, advertising and semiconductors has also lifted revenue and profit.

Still, signs of internal market strain are growing. While a handful of AI heavyweights are pushing the index higher, about 60% of S&P 500 members remain more than 20% below their all-time highs. Rising Treasury yields and higher corporate credit risk are also adding pressure.

Jonathan Krinsky, chief market technician at BTIG, cited weak market breadth, widening credit spreads and higher Treasury yields as the market’s three main risks. The risk of a correction could rise if returns on AI investment fall short of expectations.

5. JPMorgan Says Meta’s Muse Could Be the Biggest Consumer AI App Since ChatGPT

JPMorgan said Meta Platforms’ AI agent Muse could become the most widely used consumer AI application since ChatGPT.

The bank maintained its overweight rating on Meta and raised its price target to $920 from $820. That implies about 24% upside from Wednesday’s close.

Analyst Doug Anmuth said Meta has been rapidly improving and expanding the product after a strong launch. He added that the company has the potential to deliver a personal AI agent to billions of users.

JPMorgan said Muse connected with more than 2,000 applications within two weeks of launch and has integrated with Walmart, Best Buy, Sephora and Wayfair.

The bank said those connectivity features and an open API could serve as the starting point for drawing companies into the Muse ecosystem. If large numbers of businesses run their own agents on top of Muse, transactions now handled through search or phone calls could shift to agent-to-agent interactions.

Meta could eventually monetize that activity through fees or commissions on agent-based transactions, much as it built its advertising business. LSEG data show 57 of the 63 analysts covering Meta rate the stock a buy or strong buy.

6. AI Agents Threaten to Upend SaaS

The spread of AI agents could disrupt the business model of traditional software-as-a-service companies. The issue is not just that seat-based pricing tied to employee counts may weaken. Control over software selection and pricing could also shift to AI agents.

Goldman Sachs projects the AI agent market’s profit pool will grow to more than $50 billion by 2030. Over the same period, the profit pool for traditional SaaS could shrink to about $20 billion from roughly $30 billion. That would not mean the software market disappears. It would mean the flow of profits shifts away from traditional SaaS and toward agents.

Companies now pay monthly fees for software such as Salesforce, ServiceNow and Workday based on the number of employees using the service. But AI agents can move across multiple applications and handle tasks on behalf of workers. If employees no longer need to use several programs directly, the number of seats companies buy could fall.

Software companies are shifting toward usage-based pricing, but that alone does not guarantee revenue. Agents can choose the cheapest and most suitable tool among multiple software options. If vendors compete to be selected by those agents, per-task pricing could decline.

In the past, software companies set prices such as $100 per employee per month. In the AI-agent era, companies operating those agents may increasingly decide what they are willing to pay per task. If AI agents become the main point of interaction, software risks being treated as a replaceable component.

Not every SaaS company faces the same risk. Businesses with proprietary data or deep integration into customer workflows may be able to preserve higher pricing because they are harder to replace. If automation increases the total volume of tasks being processed, usage-based pricing could also generate more revenue than the old seat-based model.

The key question is whether an agent must use a given software product. Companies that can answer yes, and those that cannot, may see a sharp divergence in earnings and share-price performance.

Park Shin-young, New York correspondent, Hankyung.com nyusos@hankyung.com