North American Morning Briefing: Futures Struggle; Oil Falls on Hope for Middle East Diplomacy

U.S. stocks were set for a higher open Tuesday even though momentum which

drove stocks in the prior session seemed to have ebbed away.

After the Nasdaq closed Monday's session at its first record close since June, futures across all of the main indices were in positive territory ahead of the opening bell.

The expected open comes as oil prices fell after rising earlier in European trading, and as Treasury rates initially rose ahead of the Treasury's $69 billion auction of two-year bonds.

Oil prices appeared to reverse course as the dollar reached a seven week high, after Japan's Kyodo News said Iran offered to reopen the Strait of Hormuz within seven days if the U.S. takes steps toward easing military pressure.

President Trump, meanwhile, is scheduled to address world leaders at the U.N. General Assembly in New York later, and investors will likely tune in for any signs of diplomatic progress between the U.S. and Iran.

Stocks to Watch

Meta edged higher, continuing to rise after they jumped 11% in the prior session as its new AI agent, Muse, rose top to the of Apple's App store.

Shopify rose 1.9% after the company said that it would team up with Meta.

Western Digital fell 1.1% as Monday's tech rally lost steam.

Watch For: U.S. Richmond Fed Business Activity Survey for September; Federal Reserve Bank of Richmond President Thomas Barkin speaks to the CFA Society Baltimore

Today's Top Headlines/Must Reads:

- In Trump, Xi Sees 'Rare Window' to Convince Taiwan That Resistance Is Futile

- Saudi Arabia Spent Months Trying to Bypass Hormuz. Now There's No Way Around It.

- In the Baltics, NATO Forces Are Trying to Learn the New Way of War

MARKET WRAPS Forex:

The dollar was higher against a basket of currencies and even briefly hit a seven-week high before it pared gains.

Sterling continued to trade in a tight range against the euro after the Bank of England held interest rates at 3.75% last week, ING said.

Bitcoin eased slightly after reaching its highest level since late January on Monday, driven by U.S. regulatory progress, stronger exchange-traded-fund inflows and a broad-based rally in risky assets.

Bonds:

The flattening of the Treasury curve after last week's "decidedly hawkish" Federal Reserve interest-rate decision suggested that stronger Fed credibility is containing long-end yields, Julius Baer said.

Energy:

Oil fell, reversing an earlier rise in crude prices which reflected continuing shipping risks.

Metals:

Gold

Gold futures traded lower but remained within the $4,300-$4,400 range as traders assessed the Federal Reserve's interest-rate outlook.

Silver

Silver was facing competing forces as tighter monetary policy raised the opportunity cost of holding nonyielding assets, while the metal's industrial role provided support, Zaye Capital Markets said.

Copper

Copper prices rose above the $14,700-a-metric-ton mark, supported by a tight supply outlook.

Aluminum

Increases in Chinese and European aluminum output won't be enough to pull the global market out of deficit this year, Commonwealth Bank of Australia said.

TODAY'S TOP HEADLINES

Alibaba Unveils New AI Chip, Outlines Plan for Larger Model

Alibaba has rolled out its most powerful chip yet, doubling down on its bid to control the software and hardware that power its artificial-intelligence ambitions.

The new AI chip-the Zhenwu V900-outperforms its predecessor by a significant margin, Chief Executive Eddie Wu said Tuesday. With larger GPU memory and bandwidth, its performance is three times better than the chip Alibaba released just four months earlier, signaling companies' push to accelerate development as competition intensifies.

Pharmaceutical Companies Push Trump Administration to Protect China Deals

Western pharmaceutical companies are urging the administration to allow them to keep doing deals with Chinese companies for promising drug candidates, despite a 2025 law restricting U.S. investment in Chinese technology.

The group that represents pharmaceutical companies such as Pfizer, Merck and Eli Lilly has been lobbying to make sure that the new rules the Treasury Department is writing, as part of that 2025 law, maintain the drugmakers' ability to do deals in China.

Shopify to Use Meta's Muse for Agentic Checkout

Meta Platforms and Shopify are teaming up, with plans to allow the social-media company's personal artificial-intelligence agent to complete purchases on behalf of users with the e-commerce platform's roster of stores.

Shopify-whose platform lets businesses sell, manage orders and process payments online-said the integration with Meta's Muse would be available with Shop Pay, its accelerated, one-tap checkout service that stores buyers' shipping and billing information.

A Rocket Supply Crunch Is Making It Harder to Hitch a Ride to Space

A rocket-supply crunch is prompting a scramble across the space industry.

Companies are hunting for new ways to get satellites and spacecraft deployed, while many rockets under development are behind schedule. Some executives are pursuing costly strategies to ensure they can fly, like building their own rockets or potentially acquiring a rocket company. Prices for many missions are rising.

British Columbia Sues OpenAI, Alleging ChatGPT Aided Mass School Shooting

British Columbia filed a lawsuit against OpenAI and Chief Executive Sam Altman for alleged safety violations in the Tumbler Ridge mass school shooting that devastated a rural town in the province.

The suit, filed Monday, opens a new front in the growing fight against artificial-intelligence companies. It claims OpenAI designed an unsafe product and accuses the company of negligence for failing to flag the shooting suspect's ChatGPT activity to police. Employees of OpenAI raised alarms about the suspect's chatbot use months before the massacre, which killed eight people and injured more than 25, The Wall Street Journal previously reported.

These Tiny Startups Are Getting Even Smaller With Help From AI

Startups have lately been trying to stay as lean as possible when it comes to head count. Now some are actually shrinking thanks to AI.

"We are four employees," says Simar Singh, co-founder of Butternut AI, maker of a no-code website builder. "We were nine at our peak."

Looking for Real-Estate Bargains? Watch These Apartment Loans

A batch of 2021-era apartment loans is in trouble. Last week's Federal Reserve rate increase might force owners and their lenders to sell underperforming properties and finally give bargain hunters a chance to buy real estate at low prices.

The distress rate in commercial real-estate collateralized loan obligations, a type of securitized real-estate lending, hit 28% in August, a jump from 19% in July, data from CRED IQ shows. These floating-rate loans are sometimes used to finance risky purchases such as a property that needs to be renovated before it can be fully leased. Cash flows might be volatile until a building has been refurbished and filled with new tenants.

U.K. Government Borrowing Rose in August as Budget Looms

The U.K. government borrowed more in August than a year earlier, a setback for its plans to reduce its deficit as it prepares to outline a new budget next month.

The Office for National Statistics said Tuesday that government spending exceeded its revenues by 18.3 billion pounds ($24.46 billion), an increase in the budget deficit of 2.9 billion pounds from August 2025.

Iran's President Gets Rare Opportunity to Make His Case to the World

When a small Iranian delegation, led by the country's president, travels to New York this week, its members will be free to attend the United Nations General Assembly-but not to go for a walk in Central Park or shop on Fifth Avenue without permission. Only a trip down the block from their Manhattan hotel to the U.N. building is allowed.

The U.S. has long imposed restrictions on Tehran's diplomats, but the circumstances of the Iranian delegation are particularly unusual this year as they visit an America their country is fighting in a nearly seven-month-old war.

U.S. Proposes $5 Billion to Kickstart Fund to Rebuild Gulf Energy Sites

WASHINGTON-The Trump administration has proposed investing $5 billion in a new fund that would help Middle East countries rebuild energy infrastructure battered in the Iran war and reduce their reliance on the Strait of Hormuz to transport oil and gas, according to U.S. and Middle Eastern officials and documents seen by The Wall Street Journal.

The move is a tacit acknowledgment that the seven-month conflict has roiled the global energy market and destroyed regional pipelines and refineries that will be costly to rebuild.

Television Networks Suspend Some Coverage of Trump After Bans

Major television networks agreed on Monday to suspend a rotation of broadcast journalists who cover President Trump after the White House removed CNN from a planned assignment covering the president's trip to New York.

"Effective today, the TV pool will not be covering events designated as pool coverage of the President," Bryan Boughton, the Washington bureau chief at Fox News, who currently serves as TV pool chair, wrote in an email to pool members. "This follows the White House's position preventing CNN from fulfilling its assigned pool duties."

Write to nina.kienle@wsj.com

TODAY IN CANADA Earnings:

Nothing major scheduled.

Economic Indicators (ET):

Nothing major scheduled.

Stocks to Watch:

AltaGas: Services Prices Offering of US$750M of 5.75% Senior Notes Due 2031; Intend to Use Net Proceeds of the Offering for General Corporate Purposes; Expect Offering to Close Oct. 1

Cipher Pharmaceuticals Names Rajiv De Silva to Board; Board to Expand to Four Members

Brookfield Corp. Announces Pricing of $600M Notes Due 2031

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September 22, 2026 06:32 ET (10:32 GMT)

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