Daily Briefing | 24 October 2026: Brent crude nears US$117; US expands technology investment restrictions on China; OpenAI plans to raise funds at a valuation of US$1.25 trillion

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Today's main theme

Over the past 48 hours, oil prices have remained the dominant theme in global markets. The Iranian Revolutionary Guard claimed that several more oil tankers had been struck in the Gulf, whilst Saudi Aramco evacuated staff from its Dammam headquarters and switched to remote working. On 23 October, Brent crude closed at around US$116.70 per barrel, up approximately 3 per cent on the day. Trump invoked the Defence Production Act to allocate up to US$150 million to expand refining capacity, but this failed to curb oil prices. US consumer confidence remained at a five-month low, whilst one-year inflation expectations rose to 4.7 per cent; ahead of the Federal Reserve’s meeting next week, market bets on a further interest rate hike this year have not subsided. On the technology and geopolitical fronts, the US Treasury Department proposed expanding foreign investment review rules to include supercomputing, hypersonic technology and biotechnology within the scope of restrictions; OpenAI is reportedly in talks to raise up to US$30 billion at a valuation of US$1.25 trillion, with the valuation and funding issues of AI companies continuing to attract attention. Domestically, the State Council’s Executive Meeting examined population, economic and social development, and made arrangements to promote the expansion and quality improvement of the service sector.

Key News

1. Amid a series of statements regarding attacks in the Gulf, Brent crude closed at around US$116.7, whilst the US invoked the Defence Production Act to boost fuel production

On 22 October, the Iranian Revolutionary Guard Corps Navy stated that four oil tankers engaged in oil transhipment in the northern Persian Gulf had been struck, whilst three other vessels had struck mines west of the Strait of Hormuz; The Associated Press was unable to verify these claims, whilst Mr Trump alleged that Iran was “fabricating attacks” ahead of the mid-term elections to drive up oil prices. According to CBS, citing Reuters, Saudi Aramco has instructed staff at its Dammam headquarters to evacuate and work remotely. The Houthi rebels claimed to have carried out four attacks within Saudi Arabia in 48 hours, including one on the Ministry of Defence building in Riyadh; the Saudi-led coalition stated that it had intercepted four drones over Riyadh and Medina. Furthermore, according to a report by TheStreet, Iran has warned that it will target energy infrastructure in the Gulf should it come under further attack.

Against this backdrop, oil prices have risen consecutively. Brent crude closed at US$113.17 on 22 October and rose by a further 3.1 per cent on 23 October, closing at around US$116.7; according to the Associated Press, Brent crude was still trading below US$97 in early October. On 22 October, Mr Trump signed a presidential memorandum in Ohio, invoking the Defence Production Act to designate oil production, refining, transport and storage facilities as ‘essential to national security’, and allocated up to US$150 million to expand refining capacity and increase diesel and petrol output. This funding represents a very small proportion of the national fuel market and is unlikely to alter supply and demand in the short term.

The buffer is also shrinking. According to Al Jazeera, citing data from the US Department of Energy, the US Strategic Petroleum Reserve has fallen to approximately 283 million barrels, its lowest level since October 1982; analysts estimate that global available emergency reserves stand at only around 400 million barrels, nearly half of which are in Japan. Key points to watch: whether the Saudi East–West Pipeline (which Aramco says has increased its throughput from 2 million to 7 million barrels per day) can remain operational; the number of vessels passing through the Strait of Hormuz; and whether the US will take action against Iran following the 3 November election.

Source:Associated Press (reprinted by the Times Leader)、FinanceFeeds、Seoul Economic Daily、Al Jazeera

2. The US Treasury Department plans to extend restrictions on overseas investment, with biotechnology included for the first time

On 22 October, the US Treasury Department issued proposed rules to expand the scope of the ‘Foreign Investment Security Programme’ in order to implement the Comprehensive Overseas Investment National Security Act (COINS Act), which comes into force in December 2025 alongside the Fiscal Year 2026 National Defence Authorisation Act. The proposed rules cover semiconductors and microelectronics, artificial intelligence (referred to in the rules as ‘super-intelligent systems’), quantum information technology, high-performance computing and supercomputing, and hypersonic systems; the Treasury has also invoked a separate authorisation to include biotechnology. “Countries of concern” include China (including Hong Kong and Macao), Cuba, Iran, North Korea, Russia, and Venezuela under the Maduro regime. Treasury Secretary Bessent stated that the rules are intended to prevent adversaries from exploiting US investment to develop critical technologies. The deadline for public comments is 7 December; until the final rules are issued, the current regulations will continue to apply.

The provisions on biotechnology have provoked the strongest reaction. According to STAT, citing the research organisation Veda, the proposed rules would prohibit US companies from engaging in relevant financial transactions with Chinese biotechnology firms and their equipment and tool suppliers; however, US pharmaceutical companies would still be permitted to licence or purchase drug rights from China. Over the past two years, US pharmaceutical firms have imported a significant number of innovative medicines from China. If this rule is implemented in its current form, the channels for US dollar financing available to innovative Chinese pharmaceutical firms would be further restricted, and cross-border licensing deals may become the primary remaining form of cooperation. Key points to watch going forward include lobbying by the industry during the public consultation period, the effective date of the final rule, and the response from China’s Ministry of Commerce.

Source:Unite.AI、STAT

3. OpenAI is reportedly in talks to raise up to US$30 billion at a valuation of US$1.25 trillion

According to TechCrunch, citing CNBC, OpenAI is in talks for a new round of private funding of up to US$30 billion, with a pre-money valuation of US$1.25 trillion. The round is being led by Coatue, with participation from investors in the United Arab Emirates; the UAE funding may be linked to an agreement to provide OpenAI with additional computing power. OpenAI’s valuation stood at US$852 billion following its funding round in March this year. The company had quietly filed for an initial public offering (IPO) in June but has now opted to pursue private funding first. The terms are still under negotiation, and OpenAI has declined to comment. A month ago, Bloomberg reported on a similar funding plan with a valuation of US$1.4 trillion; the figure this time is lower. According to CNBC, Anthropic—which raised US$65 billion in May at a valuation of US$965 billion—is seeking to go public at a valuation of between US$1.5 trillion and US$2 trillion.

This funding round comes during a week in which AI shares have come under pressure. Following Meta’s shift to negative free cash flow, the market has begun to question who will fund AI investments and how long it will take to see a return. Should OpenAI secure funding at a valuation exceeding US$1 trillion, it would become the highest-valued private company in history, demonstrating that demand in the private equity market for leading model developers remains strong; A valuation lower than the figure reported last month would suggest that investors are driving down the price. Key points to watch going forward include the final post-funding valuation, the specific details of the computing power agreement with the UAE, and the IPO timetables for OpenAI and Anthropic.

Source:TechCrunch

4. Executive Meeting of the State Council: Coordinating population development with economic and social development, and promoting the expansion and quality improvement of the service sector

On 23 October, Li Qiang, Premier of the State Council, presided over a meeting of the State Council Executive Meeting to examine work relating to the coordinated development of the population and the economy and society, and to hear a report on the implementation of the decisions made at the National Conference on the Service Sector. With regard to population matters, the meeting proposed leveraging the ‘comprehensive demographic dividend’ to underpin high-quality development. It called for enhancing the quality of the population, improving lifelong learning and skills training, and promoting high-quality and full employment. It also called for optimising the layout of infrastructure in accordance with population distribution, building a fertility-friendly society, and refining supporting policies on marriage, childbirth, child-rearing and education, with a view to stabilising the size of the newborn population.

With regard to the service sector, the meeting called for strengthened support in areas such as financing, land use, talent and data; the steady advancement of price reforms in public utilities; the revitalisation of idle resources; the removal of market access barriers; and the elimination of hidden barriers to private investment. It also encouraged the expansion of investment in the service sector and the realisation of the potential for service consumption, supported eligible localities in piloting innovative measures, and called for the improvement of the statistical monitoring system for the service sector.

This meeting continued the recent policy approach of prioritising consumption and the service sector. Total retail sales of consumer goods grew by only around 1.1 per cent in the first three quarters, with consumption of goods remaining weak; service consumption and population policy are being treated as long-term levers for stabilising domestic demand. “Public utility price reform” is worth noting, as it may involve price adjustments for water, electricity and gas, which will affect both household expenditure and the profitability of public utility companies. The meeting did not specify the scale of funding. Key points to watch in the coming period include specific measures to support childbirth, detailed rules on liberalising market access for the service sector, and consumption data for the fourth quarter.

Source:China News Network、People’s Daily Online

5. US consumer confidence remains at a five-month low, whilst inflation expectations continue to rise

The final October consumer confidence index released by the University of Michigan on 23 October stood at 48.0, higher than the preliminary reading of 46.3 but slightly below September’s figure of 48.1, and remains the lowest in five months. One-year inflation expectations rose from 4.6 per cent to 4.7 per cent, whilst long-term inflation expectations rose from 3.4 per cent to 3.5 per cent. The current conditions index in the preliminary reading stood at 44.7, a record low; in the final reading, the sub-index for conditions for purchasing durable goods fell sharply by 18 per cent.

The data suggests that rising oil prices are simultaneously dampening consumer sentiment and fuelling inflation expectations—a combination that poses the greatest challenge for the Federal Reserve. According to the Associated Press, US inflation remains well above 3 per cent. The Federal Reserve raised interest rates at its last meeting, and the market expects it to hold rates steady at the meeting on 28 October, though there is a stronger inclination towards a further rate rise in December. Key points to watch: the Fed’s statement next week regarding the impact of energy prices, and the inflation data to be released subsequently.

Source:Trading Economics、Associated Press (reprinted by the Times Leader)

Market Correlation and Today's Observation

On 23 October, US shares continued to fall, with the main downward pressure this time coming from oil prices rather than technology shares. The S&P 500 index fell 0.5 per cent to 7,623.68 points, marking its second consecutive week of losses; the Dow Jones Industrial Average fell 1.2 per cent (652.82 points) to 52,215.16 points; and the Nasdaq Composite fell 0.2 per cent to 25,955.34 points. Nearly three-quarters of S&P 500 constituents fell, with energy stocks leading the decline: ConocoPhillips rose 3.6 per cent and Chevron rose 2.9 per cent; following the previous day’s sharp fall, Micron, AMD and Intel rebounded slightly. Although American Express reported better-than-expected profits, it announced its first large-scale redundancies in around a decade, causing its share price to fall by 3.7 per cent. The yield on the 10-year US Treasury note rose slightly from 4.96 per cent to 4.99 per cent.

Looking at several news items together: rising oil prices affect interest rates via inflation expectations, and in turn affect demand via consumer confidence; it is difficult for the Federal Reserve to prop up the economy through interest rate cuts, and high interest rates will continue to drive up the cost of financing for AI infrastructure. OpenAI’s fundraising at a valuation exceeding US$1 trillion demonstrates that demand for leading AI companies in the primary market remains strong, whilst the secondary market has adopted a more cautious stance towards AI capital expenditure. The US has expanded its restrictions on outward investment; in the short term, the impact on A-shares and Hong Kong stocks will be concentrated primarily in the innovative pharmaceuticals and semiconductor sectors, whilst in the medium to long term, this will continue to reduce the flow of venture capital between China and the US.

Checklist:

• Whether Brent will break through the $120 mark, and the situation regarding the Saudi East-West Pipeline and passage through the Strait of Hormuz
• The statement from the Federal Reserve’s monetary policy meeting on 28 October and expectations of an interest rate rise in December, as well as whether the yield on 10-year US Treasury bonds will rise above 5 per cent again
• Capital expenditure guidance in next week’s earnings reports from Microsoft, Alphabet and Amazon
• OpenAI’s final valuation following its funding round and the UAE computing power agreement
• China’s response to the US’s new regulations on outward investment, and the reaction of the innovative pharmaceuticals sector on the Hong Kong stock market
• Supporting Measures for Population and Service Sector Policies Adopted by the State Council Executive Meeting

Source:Associated Press (reprinted by the Times Leader)、TheStreet

Cover image:Shaah Shahidh / Unsplash