Daily Briefing | 2026-09-22: AI Reignites Risk Appetite, China-US Security Dialogue Launched

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Today's main theme

Over the past 24 hours, a striking combination has emerged in the market: global monetary conditions remain tight, but risk assets have strengthened again, driven by the AI investment boom and the decline in oil prices. The U.S. inflation narrative is shifting further from supply shocks such as tariffs and energy to overheated demand, prompting Federal Reserve officials to discuss faster and earlier interest rate hikes. Meanwhile, the Nasdaq hit a new closing high, and AMD's market capitalization reached $1 trillion for the first time, indicating that AI capital spending is still sufficient to offset some interest rate pressures. More specific risk management arrangements have emerged in Sino-US relations, with both sides agreeing to establish a formal AI security dialogue and planning to meet again in Shenzhen in about two months. The cooling down of humanoid robot IPOs in China also indicates that policies are distinguishing between "supporting strategic technologies" and "curbing valuation bubbles". On the energy side, although expensive alternatives have been found for the Hormuz transportation system, costs and geopolitical tail risks still exist.

Five key news items

1. Federal Reserve officials say overheated demand is joining inflation-driven growth, and interest rate hikes may need to be implemented more quickly.

Chicago Fed President Goolsby said in London on September 21 that U.S. inflation over the past 18 months was initially mainly driven by supply shocks such as tariffs and oil prices, but there is now growing evidence that strong demand is also driving up prices, especially the boom in AI investment and persistently high service sector inflation. He pointed out that if the main theme of inflation shifts to overheated demand, the Federal Reserve's interest rate response will need to be "more aggressive and proactive." The Federal Reserve raised its policy interest rate by 25 basis points last week, the first rate hike in three years; PCE remained at 3.7% year-on-year in July, significantly higher than the 2% target. The policy statement also no longer emphasized specific supply shocks such as energy, but only stated that "inflation remains high." This means that the market can no longer simply assume that a drop in oil prices will cause the Federal Reserve to quickly turn dovish. The focus going forward will be on service inflation, whether AI capital spending will continue to drive aggregate demand, and whether employment and price data ahead of the October meeting will support another interest rate hike.Reuters

2. Nasdaq hits closing record, AMD's market capitalization surpasses $1 trillion for the first time, and AI trading rebounds rapidly.

U.S. stocks rebounded significantly on Monday, with the Nasdaq hitting a record close, the S&P 500 rising 1.49%, and the Dow Jones Industrial Average rising 0.71%. The core driving force is once again coming from AI and semiconductors: AMD rose about 10%, and its market capitalization reached $1 trillion for the first time; Intel rose 12.2%, Arm rose 17%, and the Philadelphia Semiconductor Index as a whole rose 4.3%. Meanwhile, the yield on the 10-year U.S. Treasury note fell below 5%, Brent crude oil fell to an 11-day low, and Bitcoin rose more than 6%, all of which improved risk appetite. The significance of this rise lies in the fact that it occurred just after the Federal Reserve resumed raising interest rates, indicating that investors still believe that AI capital spending and earnings growth can partially offset the higher discount rate. However, the market is still pricing in another interest rate hike in October at around 50%, so the contradiction between valuation expansion and rising interest rates has not been resolved. The next step depends on whether chip orders and cloud vendor capital expenditures can be fulfilled, as well as the valuation resilience of AI leaders if US Treasury yields rise again.Reuters

3. China and the US have formally established an AI security dialogue, and will meet again in Shenzhen in about two months to discuss the "incident hotline".

U.S. Treasury Secretary Bessenter said on September 21 that senior Chinese and U.S. officials will meet again in Shenzhen in about two months to continue discussing the risks of artificial intelligence and communication agreements in the event of an AI security incident. Previously, Besant met with Chinese Vice Premier He Lifeng, and both sides agreed to establish a formal AI dialogue, including an "incident line" for communicating security incidents. Future discussions may cover issues that both sides believe pose systemic risks, such as runaway AI agents and non-state cyber actors. Compared to the previous day's disclosure of only the mechanism proposed by the US, the new development this time is that both sides have agreed to formalize dialogue and determine the direction of the next round of talks. Meanwhile, the US-China tariff truce is set to expire on November 10, but neither side has yet explicitly agreed to an extension. This mechanism will not eliminate chip export controls and technological competition, but it may reduce the probability of AI incidents being misjudged as state acts. We will then observe the specific departments involved in the Shenzhen meeting, the definition of an accident, and the reporting thresholds, as well as whether this week's meeting between the heads of state will grant this mechanism a higher level of political confirmation.Reuters

4. China tightens the pace of humanoid robot IPOs, shifting regulatory focus from technology stories to revenue quality.

Reuters reported on September 21 that Chinese regulators are slowing the wave of humanoid robot companies going public, focusing on whether revenue from high valuations and local government-backed projects truly represents business demand. Sources familiar with the matter said that some companies have received informal "window guidance," significantly raising the IPO approval threshold in the industry. One of the key factors triggering regulatory caution was that Unitree’s stock price rose more than fivefold after its IPO, and then fell 55% from its peak. Regulators also pay special attention to robotic data acquisition centers and local government joint ventures, with local government funding accounting for 80% to 90% of the initial investment in some projects. Some investors estimate that if related revenue is excluded, the valuation of some robotics companies may decline by 60% to 70%. This does not mean that Beijing is withdrawing its strategic support for "embodied intelligence," but rather that the policy goal is shifting from expanding financing to verifying orders, deployment scale, and sustainable revenue. Looking ahead, we will see the pace of review for companies planning to go public, actual industrial orders, and whether local government fiscal support will be reduced.Reuters

5. The Hormuz "sea relay" maintains crude oil exports, but VLCC freight rates have exceeded $30 per barrel.

Middle Eastern oil-producing countries are using ship-to-ship transshipment to maintain Hormuz exports. Kpler data shows that crude oil exports via Hormuz recovered to about 6.5 million barrels per day in September, the highest level since the brief easing in June. It is estimated that approximately 2.5 million barrels per day of crude oil will be loaded and unloaded via Gulf of Oman vessels this month, up from 1.4 million barrels per day in August, which is equivalent to about 40% of the current crude oil flow in the Strait. This system reduces the risk of a single tanker repeatedly passing through conflict zones, but significantly increases costs: LSEG data shows that the benchmark VLCC freight rate from the Gulf to China has exceeded $30 per barrel, a record high. At the same time, the number of trackable vessels remained far lower than before the war, as many ships turned off their transponders and sailed under American escort. The market is therefore not facing a simple "supply disruption or continuous supply", but rather a coexistence of supply recovery and soaring logistics costs. Going forward, attention should be paid to ship-to-ship transshipment capacity, insurance and freight rates, the recovery of the Saudi East-West oil pipeline, and whether any ceasefire negotiations can truly reduce the risk premium.Reuters

Market Correlation and Today's Observation

The core of asset pricing today is that "the growth narrative has once again overshadowed the tightening narrative, but the two are colliding head-on." On the interest rate side, Federal Reserve officials have begun to explicitly discuss overheated demand, indicating that even if oil prices fall from their highs, service prices and AI investments may still keep inflation sticky. If the probability of a rate hike in October continues to rise, short-term US Treasury bonds will come under pressure again. On the exchange rate side, the US dollar remains supported by high interest rates, while after the RMB previously broke through 6.70, the market will continue to observe whether the People's Bank of China's central parity rate will allow for further appreciation before the meeting between the Chinese and US leaders. In terms of risk appetite, the Nasdaq hitting a new high, AMD entering the trillion-dollar market capitalization bracket, and Bitcoin's rise indicate that funds are chasing high-beta assets again. However, this market is highly dependent on yields and should not rise rapidly again.

The commodity market provided a buffer: the continuous decline in crude oil alleviated immediate inflation anxieties, but the real structure of Hormuz has not returned to normal. Exports of 6.5 million barrels per day and large-scale ship-to-ship transshipment demonstrate the resilience of the supply chain, while VLCC transportation costs exceeding $30 per barrel mean that geopolitical risks are shifting from "quantity shortages" to "logistics taxes". In terms of Chinese policy, the cooling of humanoid robot IPOs is worth considering alongside the rise in US AI stocks: both capital markets recognize long-term investment in AI, but regulators and investors are beginning to pay more attention to revenue quality, real orders, and safety responsibilities. Today, the focus should be on whether US Treasury yields can maintain their decline, whether oil prices will continue to fall, whether the rally in AI semiconductors can spread, and whether new enforceable arrangements for the trade truce and AI security mechanisms will emerge before the US-China summit. If yields and oil prices fall simultaneously, technology valuations will still have support; If evidence of demand-driven inflation strengthens, current risk appetite may again face pressure from higher interest rates.

Cover image:Daniel Brzdęk / Unsplash