The culprit for this newfound sobriety? Inflation data. Specifically, the Personal Consumption Expenditures index, due Friday, that will either soothe or inflame investors' fears. Jerome Powell has been gently reminding us that asset prices appear “fairly highly valued”, a remark one imagines delivered in the Fed chairman's trademark calm monotone. And yet the indexes keep reaching for record highs, propelled by optimism that feels selective.

The stakes are higher than usual. High valuations are defensible only if economic data and earnings keep pace, and Friday's inflation figures will be parsed for any hint that the path of interest rates may shift.

The housing market offers one example of this fragile balance. Data released Wednesday showed new home sales jumping by more than 20% in August, a striking surge, though one that may prove more tactical than structural. Builders, anxious about labor shortages and rising costs, may be offering incentives to secure buyers before conditions worsen. It is a statistic that glitters, but not necessarily one that reassures.

Other economic signals point in conflicting directions. Weekly jobless claims came in at 218,000 for the week ending September 20, below expectations of 233,000. On the surface, this suggests a labor market that remains stubbornly robust, even as wages cool and corporate hiring slows. Yet the figure also complicates the Fed's task. A stronger labor market implies continued consumer demand, which in turn can prolong inflationary pressures. The Fed does not need a recession to achieve its aims, but it does require some evidence that demand is moderating. For now, claims data send the opposite message.

Meanwhile, the Commerce Department revised second-quarter GDP growth upward to an annual rate of 3.8%, well above the initial 3.3% estimate. That upgrade will be welcomed by those eager to celebrate American economic resilience, but it raises familiar questions about sustainability. Growth at this pace is impressive, but it does not sit comfortably alongside persistent inflationary risks and the fragile psychology of investors. If anything, it sharpens the Fed's dilemma: restrain demand without tipping over an economy that continues, inconveniently, to grow.

These debates would be complex enough without the added wrinkle of politics. The credibility of U.S. data has itself become a subject of controversy, following Donald Trump's decision to sack the head of the nation's statistical agency earlier this month. Officially, the dismissal was justified on grounds of "management reform." Unofficially, it has fueled suspicion that economic data are becoming yet another battleground in Washington's fractious politics. Investors, already accustomed to parsing economic releases for nuance, must now also ask whether the numbers are being presented with the independence they once assumed. Confidence, after all, is not only about what the figures say but about whether they can be trusted.

Nor is inflation the only concern weighing on markets. Washington's inability to conclude budget negotiations raises the prospect of a government shutdown, a spectacle so familiar that markets rarely panic, but not so routine that it can be dismissed. Each delay introduces an additional variable into a landscape already clouded by the Fed's evolving stance and a still-uncertain global outlook.

In corporate news, Intel shares rose sharply after reports of overtures to Apple. Opendoor Technologies rallied after Jane Street disclosed a stake, while Lithium Americas surged on reports that the Trump administration might seek an equity investment. 

The divergence between exuberant corporate stories and cautious macro data is not new, but it is becoming more pronounced. Markets have, since April's tariff-driven selloff, chosen optimism, pushing indexes to repeated highs. That optimism is neither irrational nor entirely misplaced, but it does depend upon inflation continuing to moderate. Should the PCE data suggest otherwise, the risk is not merely a bad day for equities but a recalibration of the assumptions that underpin the entire rally.

Even when there is less talk of them, customs duties are never far away. As expected, the United States has lowered tariffs on car imports from the EU to 15%, with retroactive effect from 1 August. In fact, this is not a reduction but an increase compared to the previous situation, but let us not forget that history is written by the victors. The Trump administration took the opportunity to announce the launch of investigations into imports of robots, industrial machinery and medical devices. In other words, all kinds of equipment generally produced by the United States' main trading partners, such as Germany, South Korea and China.

In Asia-Pacific, the picture is once again mixed. China continues to be buoyed by its technology sector, even if the momentum is slowing down somewhat. Japan and Australia are gaining a little ground. However, there has been a slight decline in India and South Korea, and a slightly stronger decline in Taiwan. European leading indicators are bearish.

Today's economic highlights:

On today's agenda: new car registrations in the European Union; in France, consumer confidence; in Switzerland, the SNB policy rate; M3 money supply in the eurozone; in the United States, durable goods orders, annualized GDP, new unemployment claims, wholesale inventories, and existing home sales. See the full calendar here.

  • Dollar index: 98,170
  • Gold: $3,753
  • Crude Oil (BRENT): $68.16 (WTI) $64.52
  • United States 10 years: 4.15%
  • BITCOIN: $114,466

In corporate news:

  • AviLease, backed by Saudi Arabia’s Public Investment Fund, is preparing for a $500 million debut bond sale as part of a $2 billion program to expand its aircraft leasing operations.
  • Jabil raised its fiscal 2026 forecast above Wall Street expectations, driven by strong AI-related demand in the data center sector.
  • Vertex Pharmaceuticals received FDA breakthrough therapy designation for its IgA nephropathy drug povetacicept and is targeting accelerated approval in H1 2026.
  • Uber Technologies partnered with ALDI to offer grocery delivery from over 2,500 stores via Uber Eats, now including SNAP-EBT payments.
  • Accenture posted better-than-expected quarterly results but issued a cautious growth forecast for FY 2026, triggering a market pullback despite announcing a $7.9 billion buyback and a dividend hike.
  • Amazon is shutting all 19 of its UK Amazon Fresh stores, marking a retreat from physical grocery retail in Britain while it focuses on expanding online grocery delivery.
  • Eli Lilly halted a diabetes-related obesity drug trial for strategic reasons but continues developing similar treatments for non-diabetic patients.
  • Chevron expects a $200–$400 million Q3 loss from its Hess acquisition but forecasts stable production and capital spending levels.
  • BXP priced an upsized $850 million senior notes offering to refinance 2026 debt and fund general corporate needs.
  • UnitedHealth and CNSide Diagnostics signed a nationwide deal to cover a cerebrospinal fluid tumor cell test for over 51 million insured patients.
  • Blackstone is exploring a potential IPO or sale of Ancestry.com, which could value the genealogy platform at around $10 billion.
  • Starbucks will close underperforming stores and cut 900 corporate jobs as part of a $1 billion restructuring to revive sales and simplify operations.
  • Cipher Mining signed a $3 billion AI data center hosting deal with Fluidstack, backed by Google, which will receive a 5.4% equity stake in Cipher.
  • Evaxion licensed its EVX-B3 vaccine candidate to Merck for $7.5 million upfront and up to $592 million in milestones and royalties.
  • Spotify is under investigation by Turkey’s antitrust authority for alleged algorithm bias and unfair pricing in the local music streaming market.
  • Ryanair expects its first Boeing 737 MAX 10 jets to be delivered on time in early 2027, following recent reassurances from the plane maker.
  • Moderna opened its first UK-based mRNA vaccine production facility, capable of making 100–250 million doses annually for both seasonal and pandemic use.
  • Blue Owl and Qatar Investment Authority launched a $3 billion digital infrastructure platform to support global cloud and AI expansion.
  • KKR received EU approval for its joint acquisition of Datagroup, a German IT services provider, under simplified merger procedures.
  • IBM and HSBC completed the first known quantum computing trial for bond trading, improving quote prediction accuracy by up to 34%.
  • Ford is recalling 4,632 vehicles in the U.S. due to an engine compartment fire risk, according to the NHTSA.
  • Apple called on the EU to repeal or scale back the Digital Markets Act, arguing it harms product innovation and user privacy.
  • Boeing delivered a 777 freighter to China’s Suparna Airlines, the first such delivery since the U.S.-China trade conflict began.
  • India signed a $7 billion deal with HAL to purchase 97 Tejas Mk-1A fighter jets to modernize its air force and reduce dependence on Russian equipment.
  • Corintis, a chip-cooling startup backed by Microsoft and now Intel CEO Lip-Bu Tan, raised $24 million to scale production of its advanced liquid-cooling systems.
  • Walt Disney faces shareholder scrutiny over Jimmy Kimmel's suspension and legal battle with Trump.
  • Citigroup agrees to sell its 25% stake in Banamex.
  • Oracle Corp files for an $18 billion bond offering for cloud infrastructure investment.

Analyst Recommendations:

  • Amentum Holdings, Inc.: Cantor Fitzgerald upgrades to overweight from neutral with a price target raised from USD 25 to USD 35.
  • Boeing: President Capital Management Corp upgrades to buy from neutral and raises the target price from USD 235 to USD 256.
  • Crowdstrike Holdings, Inc.: Scotiabank upgrades to sector outperform from sector perform and raises the target price from USD 440 to USD 600.
  • Csx Corporation: Wells Fargo upgrades to overweight from equalweight and raises the target price from USD 37 to USD 40.
  • Freeport-Mcmoran Inc.: Bernstein upgrades to outperform from market perform and reduces the target price from USD 50.50 to USD 48.50.
  • Intel Corporation: Seaport Global upgrades to neutral from sell.
  • Qualcomm, Inc.: Aletheia Capital Limited downgrades to hold from buy.
  • Reinsurance Group Of America, Incorporated: Baptista Research downgrades to outperform from buy and reduces the target price from USD 242.60 to USD 230.20.
  • West Pharmaceutical Services, Inc.: Zacks downgrades to neutral from outperform and reduces the target price from USD 293 to USD 263.
  • Kratos Defense & Security Solutions, Inc.: RBC Capital maintains its outperform recommendation and raises the target price from USD 65 to USD 90.
  • Reddit, Inc.: Baird maintains its neutral recommendation and raises the target price from USD 177 to USD 240.
  • Snap Inc.: Loop Capital Markets maintains its buy recommendation and raises the target price from USD 12 to USD 15.
  • Thor Industries, Inc.: BNP Paribas Exane maintains its underperform recommendation and raises the target price from USD 51 to USD 79.
  • Tko Group Holdings, Inc.: Morgan Stanley maintains its equalwt recommendation and raises the target price from USD 165 to USD 205.