Daily Briefing | 2026-09-29: Tariff Easing and Interest Rate Risks Intertwine

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Today's main theme

Over the past 24 hours, the most prominent theme in the market has been the simultaneous occurrence of "local easing" and "further tightening of financial conditions". The US and China extended the tariff truce until January next year and announced a list of two-way tariff cuts on approximately $60 billion worth of goods, opening a window for agricultural products, consumer goods, and subsequent negotiations. The United States and Iran then discussed a seven-day plan through mediators, attempting to package a ceasefire, asset unfreezing, oil sanctions, and the reopening of the Strait of Hormuz. However, oil prices remained supported by negotiation uncertainty, with US Treasury yields rising and gold prices plummeting, indicating that investors did not equate diplomatic engagement with the elimination of risk. At the same time, Nvidia moved AI agent security from policy debate to hardware and software control, and responded to valuation discounts with a $150 billion new share buyback. Ukraine has made phased progress in its counteroffensive in the Donetsk direction. For asset prices, peace and trade dividends are emerging, but the speed of realization still depends on implementation details, energy channels, and interest rate paths. Investors are not facing a single positive or negative factor, but rather a reordering of three forces: declining policy tail risks, rising capital costs, and expanding industrial capital expenditures. Short-term volatility may therefore be more prominent than the trend itself.

Five key news items

1. The US and China announced a list of tariff cuts on approximately $60 billion worth of goods, extending the truce window to January next year.

In the new round of trade arrangements, China and the United States each lowered tariffs on approximately $30 billion worth of goods, totaling approximately $60 billion in 2024, and extended the current truce by two months until January 10, 2027. China's list covers U.S. corn, wheat, sorghum, meat, dairy products, and edible oil, but does not include soybeans, which are expected to be worth approximately $16.2 billion in U.S. exports to China in 2025. The U.S. list focuses on Chinese toys, home appliances, tableware, and bedding, with Chinese toy exports to the U.S. falling from $14.4 billion in 2024 to $9.8 billion in 2025. Both sides also agreed that China would purchase 10 million tons of U.S. coal annually from 2027 to 2028, and would promote approval by financial institutions, establish communication channels for AI incidents, and continue negotiations by the end of November. This move has reduced trade costs for some consumer goods and agricultural products, and also created space for China to stabilize foreign trade and the United States to alleviate price pressures on some commodities. However, the effective date of the tax cuts, the specific tax rate, and the absence of soybeans remain key variables. In the short term, it remains to be seen whether importers will quickly resume orders and whether the truce can translate into a more lasting framework before the January deadline.Source: Reuters

2. The US and Iran discussed a seven-day plan through mediation, but a ceasefire and the reopening of Hormuz still require conditions.

U.S. and Iranian officials met separately with mediators on Monday to discuss a revised seven-day plan. The framework outlined in the report includes ending the wars in Iran and Lebanon, unfreezing billions of dollars in Iranian assets, ending oil sanctions, and lifting the US blockade. In exchange, Iran will reopen the Strait of Hormuz and resume nuclear negotiations. The war has killed thousands since it broke out in late February, following two failed ceasefires in April and June. Although Trump publicly denied earlier versions, U.S. officials expect contacts to continue. For the global economy, the plan links security, energy, and financial sanctions with the nuclear issue. If any of these cannot be implemented, it could delay the normalization of navigation through the Straits and oil supplies. Conversely, if a verifiable order is established, there is room for decline in tanker insurance, shipping rates, and inflation risk premiums. The market should next focus on whether both sides have confirmed a common text, how the unfreezing of assets and the lifting of sanctions will be synchronized, and whether the resumption of navigation in the Strait can be subject to third-party oversight.Source: Reuters

3. US Treasury yields hit a 19-year high, while gold fell as much as 4% in a single day.

US interest rate expectations once again overshadowed the safe-haven narrative: spot gold fell as much as 4% on Monday, hitting $4,111 an ounce, its lowest level since August 5; The yield on the 10-year U.S. Treasury note rose to its highest level since June 2007 during trading before falling slightly. The interest rate market is currently pricing in a roughly 70% probability of the Federal Reserve raising interest rates for the second consecutive time in October, raising the opportunity cost of holding interest-free gold. Position data also showed easing congestion, with net long positions in gold by funds falling to their lowest level since the end of July. Last week, gold ETFs saw outflows of approximately 1.6 tons, with global holdings of approximately 4,249 tons. The spot premium in the Chinese market dropped to zero before the holiday. Meanwhile, the failure to achieve a breakthrough in US-Iran negotiations has led to higher oil prices, and energy costs and long-term interest rates have created mutually reinforcing inflationary pressures. The gold price correction does not mean that geopolitical risks have disappeared, but rather that real interest rates and the US dollar have once again become stronger pricing factors. Going forward, we should focus on observing US inflation and employment data, expectations for the October interest rate meeting, the transmission of oil prices, and whether rising yields will force leveraged funds to further reduce their positions.Source: Reuters

4. Nvidia launches AI agent isolation tool and adds $150 billion in stock buybacks.

Nvidia has released security tools for AI agents, claiming they can prevent the out-of-control agent attacks that previously occurred at Hugging Face. The core software OpenShell uses processor hardware capabilities to limit the resources that agents can access and can run on NVIDIA, Arm, and Intel chips; The matching Sentry chip can cut off execution when it detects abnormal behavior such as the agent bypassing restrictions by generating child agents. The product's initial partners included dozens of companies such as Anthropic, reflecting that as AI shifts from chat tools to autonomously invoking systems and performing tasks, security boundaries have become an infrastructure issue, rather than simply a matter of model content review. On the same day, Nvidia increased its stock repurchase program by $150 billion, bringing the remaining quota through fiscal year 2028 to approximately $235 billion. The company's stock price has risen by about 20% this year, but it has lagged behind AMD and Intel, with an expected price-to-earnings ratio of about 16.5, the lowest level since 2015. Security products help companies adopt agencies, while buybacks provide valuation support; Going forward, it remains to be seen whether the tools become industry standards, whether chip binding attracts regulatory attention, and whether the high growth forecast can be realized.Security Tools Source: Reuters；Repurchase source: Reuters

5. Ukrainian forces claim to have recaptured 51 square kilometers in Donetsk, disrupting Russian encirclement plans.

Ukraine's Third Army Corps stated that its troops recently recaptured 51 square kilometers in key battlefields in the east; The operation, codenamed "Vivaldi," recaptured a total of 176 square kilometers, liberated three villages, and regained control of two other settlements. The U.S. Institute for the Study of War described this advance as having "operational significance" because it disrupted Russian forces' plans to largely encircle Ukraine's Donetsk "fortress belt." Russia still controls about 20% of the Ukrainian territory in Donetsk Oblast and demands control of the entire region. These disagreements are also a major reason for the stalled negotiations. This development cannot alone change the overall balance of power in the war, but it increases the likelihood of Ukraine holding its urban defenses and gaining leverage in negotiations as the Russian advance slows down, and may also influence Europe's assessment of the sustainability of military aid. Going forward, it remains to be seen whether the Ukrainian army can hold the newly recaptured areas, whether Russia will mobilize reserve forces to counterattack, whether the United States can formulate concrete arrangements to restart negotiations, and whether energy facilities and logistics lines will face a stronger blow before winter.Source: Reuters

Market Correlation and Today's Observation

The core of today's cross-pricing remains "oil prices - inflation - interest rates - the US dollar". If the US and Iran write a ceasefire and the reopening of Hormuz into an enforceable agreement, the risk premium for crude oil and freight costs may decrease, easing inflationary pressures on major central banks. If negotiations break down again, rising energy prices will strengthen the Federal Reserve's case for continued tightening and push long-term bond yields into a higher range. High yields and a strong dollar typically suppress risk appetite for gold and emerging markets, and also raise the discount rate of overvalued technology stocks. Nvidia's large-scale share buybacks can buffer individual stock volatility, but they cannot completely offset the constraints of interest rates on the valuation of the entire technology sector.

Tax cuts between the US and China provide another buffer. Reduced costs for toys, home appliances, and agricultural products have helped lower some end-user prices and improve order visibility for businesses. China's commitment to import U.S. coal could also change the direction of marginal energy trade. However, the exclusion of soybeans and the uncertain timing of implementation mean that the RMB, agricultural products, and shipping markets will not immediately be priced according to the comprehensive settlement. On the Chinese policy side, the focus will shift from the agreement title to whether companies actually place orders, whether financial institutions are progressing with approvals, and whether improvements in foreign trade can be transmitted to investment and employment. Geopolitically, Ukraine's phased counteroffensive and Middle East negotiations coexist, and risk appetite may continue to fluctuate rapidly between diplomatic news and battlefield facts. The most noteworthy things to watch today are whether US Treasury yields can hold their high levels, the sensitivity of oil prices to negotiation news, the linkage between the US dollar and the Chinese yuan, and the actual changes in soybean, coal, and consumer goods orders after the trade list is released. If oil prices fall but US Treasury yields remain unchanged, the market will be more likely to attribute the pressure to sticky inflation and fiscal supply. If both prices decline simultaneously, risky assets are expected to undergo a broader valuation recovery. Related assets in China still need to observe whether policy expectations can ease external frictions and further translate into improvements in domestic demand, credit, and corporate profitability.

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Cover image:jing chen / Unsplash