Core Insights - Oil prices are experiencing significant volatility, with U.S. crude hitting its lowest level since May, indicating a potential surplus and geopolitical factors influencing the market [1][2][3] - The U.S. benchmark has declined approximately 22% this year, marking its worst performance since 2018, while the global benchmark has dropped nearly 20%, the worst since 2020 [2] - OPEC+ members have increased production rapidly after years of cuts, contributing to downward pressure on oil prices [3] Price Movements - West Texas Intermediate (WTI) crude oil was last trading at $55.61 per barrel, down 2.13%, while Brent crude was at $59.39, down 1.93% [2] - U.S. gasoline prices have fallen below $3 per gallon, reaching the lowest level in four years [2] Geopolitical Factors - The oil market has been under pressure due to the ongoing conflict in Ukraine, with the U.S. and European allies imposing sanctions on Russia's crude industry [4] - The potential for a peace agreement in Ukraine is influencing investor sentiment and pricing in lower geopolitical risks [3]

Core Viewpoint - The markets are experiencing an "everything rally" with record high stocks, subsiding bond yields, and a weakening dollar ahead of a widely anticipated U.S. interest rate cut [2][3]. Market Developments - A quarter-point Fed rate cut is fully priced in, with attention on the Federal Reserve's institutional standing amid increasing political pressure from the White House [3][6]. - Gold has reached a new record high, and China's offshore yuan has hit its highest level of the year following positive developments in U.S.-China trade talks [3][4]. Stock Market Performance - The S&P 500 has gained 12% year-to-date, while funds tracking the 'Magnificent Seven' megacaps have increased by 16% for 2025 [4]. - Big Tech stocks led Wall Street gains, with Tesla shares rising 3.6% after CEO Elon Musk purchased nearly $1 billion worth of stock, and Alphabet surpassing a $3 trillion market capitalization [6]. Political Influence on the Fed - The Senate's confirmation of Stephen Miran to the Fed's Board adds to the political pressure on the central bank, coinciding with President Trump's public call for a larger rate cut [6]. - The potential replacement of Fed Chair Jerome Powell by Trump next May further emphasizes the political dynamics affecting monetary policy [6].

Federal Reserve Actions - The Federal Reserve is expected to cut the Fed funds rate by 25 basis points to a range of 4.00% to 4.25% during its two-day meeting [3] - Investors are anticipating follow-up rate cuts in October and December, influenced by recent data indicating a slowing labor market [3] - The Fed's quarterly "dot plot" will provide guidance on the expected interest-rate path over the next few years [3] Economic Indicators - The Empire State manufacturing index fell to a 3-month low of -8.70 in September, significantly below expectations of 4.30 [4] - U.S. Retail Sales are forecasted to show a +0.2% month-over-month increase in August, following a +0.5% increase in July [6] - Core Retail Sales are expected to rise +0.4% month-over-month in August, compared to a +0.3% increase in July [7] Stock Market Movements - Wall Street's main stock indexes closed higher, with the S&P 500 and Nasdaq 100 reaching new record highs [5] - Seagate Technology (STX) rose over +7% after Bank of America raised its price target from $170 to $215 [5] - Tesla (TSLA) increased over +3% following CEO Elon Musk's purchase of approximately $1 billion worth of shares [5] International Economic Data - The U.K. unemployment rate remained unchanged at 4.7% for the three months to July, aligning with expectations [11] - Italy's annual inflation rate eased to 1.6% in August from 1.7% in July [10] - The German ZEW Economic Sentiment Index for September came in at 37.3, exceeding expectations of 25.3 [12]