Daily · UN Diplomacy and Market Volatility · September 23, 2026

Key points

US-Iran Standoff and Oil Supply

President Donald Trump addressed the 81st UN General Assembly on Tuesday, stating he faced a 'big decision' between reaching a deal with Iran or 'annihilating the Islamic Republic.' He claimed the US sank all 159 ships of Iran's navy and announced 18 new munition plants under construction. Despite the rhetoric, US Special Envoy Steve Witkoff and Jared Kushner held a three-hour mediated meeting with Iranian officials on the sidelines of the assembly. Trump described the talks as 'very productive' and suggested a deal could be reached after the November midterm elections.

Iranian Foreign Minister Abbas Araghchi confirmed the meeting, stating Iran's conditions include lifting the US naval blockade, releasing frozen assets, and ending the war on all fronts. A senior Iranian official said Tehran could reopen the Strait of Hormuz within seven days if military pressure eased. However, Secretary of Iran's Supreme National Security Council Mohsen Rezaei stated on Wednesday that Iran will not resume negotiations until Washington accepts seven specific conditions.

Market data reflects the continued disruption. Kpler reported that confirmed transits through the Strait of Hormuz averaged 6.98 million barrels a day in the seven days to September 20, about 38% of the pre-war baseline. Only three commodity vessels transited the strait on Tuesday, running 80% below the 10-day average. Brent crude futures fell 0.9% to $98.37 a barrel, and WTI futures dropped 1.5% to $89.16 per barrel. Saudi Arabia restarted its East-West pipeline, allowing some exports via the Red Sea, but sources disagree on whether full operations have resumed.

The diplomatic environment is complex. Qatar is mediating, with Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani proposing a common security framework involving Iran and Gulf states. The US has also signed a security agreement with Denmark and Greenland, granting access to deploy the 'Golden Dome' missile defense system and control over critical infrastructure in the Arctic, a move Senator Jeanne Shaheen criticized as damaging trust with allies.

Xi-Trump Summit and Tech Trade

Chinese President Xi Jinping skipped the UN General Assembly to travel to Washington for a state visit from September 23 to 25, his first since 2015. The summit is expected to focus on stabilizing bilateral ties, with agendas including fentanyl precursors, rare earth supplies, US tariffs, and China's access to advanced AI chips. The sides are discussing tariff reductions covering about $30 billion in goods for each side. A state dinner on Thursday is expected to be attended by tech leaders including Mark Zuckerberg, Jeff Bezos, Elon Musk, Sundar Pichai, and Jensen Huang.

US Treasury Secretary Scott Bessent discussed a 'US-China AI dialogue' with Chinese Vice Premier He Lifeng, including a channel for incidents up to a national security level. Washington continues to restrict China's access to Nvidia's most advanced AI chips, while Beijing denies supporting Iran militarily. The visit comes as China's rare-earth export controls create supply risks for Swiss and European industry, with a decision expected by November 2026 on whether to apply a stricter regime including extraterritorial re-export authorization.

South Korean President Lee Jae Myung also met with Trump, discussing Seoul's pursuit of nuclear-powered submarines and the transfer of wartime operational control. Lee unveiled a plan to double South Korea's semiconductor production capacity within five years and build AI supply chains free from external shocks. The summit did not address issues involving the Strait of Hormuz, despite US pressure on Seoul to make military contributions.

US Rates and Inflation Signals

The 10-year US Treasury yield rose 7 basis points to 5.058% on September 23, a level not seen since July 2007. The 2-year yield jumped to 4.464%, and the 30-year yield gained more than 4 basis points to 5.347%. S&P Global services PMI jumped to 58.7 in September from 56.5 in August, its highest level in nearly five years, while manufacturing PMI rose to 56.7.

Fed Governor Michael Barr said further rate hikes are likely necessary as 'risks to achieving our inflation target have increased.' The Fed hiked its overnight benchmark rate the previous week. Odds of another quarter-point increase in October rose to 64% on September 23 from 55% on September 22, per CME Group's FedWatch tool; those chances stood at less than 10% a month earlier. S&P Global chief business economist Chris Williamson noted that input costs jumped in September at the steepest rate for four years, driven by rising oil prices.

Boston Fed President Susan Collins warned of an increased likelihood that inflation will remain notably above the 2% target. She explained that a 'somewhat more restrictive federal funds rate' will help ensure inflation durably returns to target. Markets are broadly split on the likelihood of another hike at the October FOMC meeting, with 53.1% currently expecting a 25-basis-point increase.

The IMF's Managing Director Kristalina Georgieva warned advanced economies to bring debt levels down and prioritize fiscal consolidation as borrowing costs surge. She flagged AI as a potential financial stability risk, noting that if more incidents occur when AI takes on a life of its own, the world could face significant financial stability risks.

Ethiopia Conflict Escalation

Tigrayan authorities said their forces had been forced into a 'defensive war' following reports of drone strikes. A strike in the southern town of Alamata on Tuesday killed at least 14 people and injured 22 others, all civilians. Tigrayan forces took control of the airport in Mekelle from national police early on Wednesday; Ethiopian Airlines cancelled all flights to Tigray following the seizure of federally administered airports.

Cabinet minister Getachew Reda said Tigrayan fighters had taken control of federally administered airports and launched offensives in neighboring Afar and Amhara regions. Tigrayan forces seized control of airports in Mekelle, Shire, and reportedly Axum. Two humanitarian staff told AFP that fighting broke out in the towns of Abala and Erebti in the Afar region between the TPLF and federal forces. The US State Department condemned a separate drone strike targeting a convoy of Catholic vehicles carrying food aid.

The conflict follows the formation of the Ethiopian Peoples' Forces Alliance for Survival, which brings together seven armed groups including the TPLF, OLA, and ONLF, pledging to remove Prime Minister Abiy Ahmed. The alliance was announced on Sunday, with Fano commander Zemene Kassie reading the founding statement. Abiy's spokesperson accused the members of collaborating with Eritrean financial backing, an accusation Asmara has denied.

Ukraine Energy Ceasefire and Sanctions

Ukrainian President Volodymyr Zelenskyy met with Trump for 40 minutes on Tuesday, discussing a path to ending the war. Zelenskyy said Kyiv is ready to halt strikes on Russian energy facilities if Moscow stops targeting Ukraine's energy system. He proposed that in return for Patriot missiles from US stockpiles this winter, Ukraine would swap future supplies of interceptors from its deal with Germany, which has agreed to provide 600 Patriots in 2027 and 2028. Trump had not yet agreed to the swap but called it a 'good step.'

Russia bombarded Kyiv with drones from early Wednesday morning, killing at least two people and injuring 24. The strikes destroyed the railway market next to the central station and damaged a key pharmaceutical factory. Russian Foreign Minister Sergey Lavrov met with US Secretary of State Marco Rubio on Wednesday in New York. Lavrov is scheduled to address the General Assembly on September 26.

The EU agreed to remove Russian billionaires Alisher Usmanov and Mikhail Fridman from its sanctions list while extending restrictions on nearly 3,000 individuals and companies linked to Russia's war for another three years. France campaigned for Usmanov's removal citing national security concerns, linked to a prospective prisoner release deal with Azerbaijan. Ukrainian Foreign Minister Andriy Sybiha called the move 'unacceptable.'

Trump backed a ban on US diesel exports as fuel prices hit records before the midterms. National average diesel prices surpassed $6.50 a gallon on Tuesday. Treasury Secretary Scott Bessent said the administration was examining whether such a ban was feasible. The US exports roughly 1.3 million barrels of diesel per day, nearly a quarter of its refining output.

AI Governance and Market Moves

World leaders addressed AI governance at the UN General Assembly with divergent positions. Trump rejected international efforts to establish global controls on AI, announcing that US government documents would refer to AI as 'super intelligence.' Turkish President Erdogan called for a UN International Convention on AI. UK Prime Minister Andy Burnham announced Britain would put AI at the heart of its G20 presidency in 2027 and work toward 'a single set of global principles and standards.' French President Macron warned against allowing the US and China to dominate AI decision-making and backed a shared open-source frontier model.

Meta hot-fixed a zero-day vulnerability in its Muse Mac app within a day of disclosure. The flaw allowed malware to hijack the agent's authentication material. Meta's launch documentation does not describe a SIEM audit export or IT admin console, creating a visibility gap for enterprise security teams. Shares of Charles Schwab fell 6% on Tuesday, while Robinhood's stock hit a year-to-date high.

AMD joined the $1 trillion market-capitalization club, fueled by the AI boom and strong Epyc and Instinct performance. The Nasdaq-100 Index hit an all-time high on Tuesday, surpassing the previous record set in June, as falling oil prices and Meta's Muse agent launch reignited interest in AI technology stocks.

SoftBank is set to price a mega junk-bond deal expected to reach about $11 billion across two currencies to finance its AI build-out. The move marks the AI build-out officially crossing over into the junk-bond market, where investors expect higher compensation for taking on bigger risks.

Our read

The simultaneous escalation of rhetoric and diplomatic engagement between the US and Iran creates a binary risk environment for energy markets; while the Strait of Hormuz remains largely closed, the partial restart of Saudi pipelines provides a limited buffer that may not sustain if talks collapse. For technology and finance decision-makers, the 19-year high in US Treasury yields combined with hawkish Fed signals indicates a tightening financial backdrop that will increase the cost of capital for AI infrastructure projects, particularly those relying on high-yield debt like SoftBank's upcoming issuance. The Xi-Trump summit offers a potential de-escalation in trade tensions, but the absence of agreement on AI chip controls and rare earths suggests that supply chain fragmentation will persist, requiring continued diversification strategies. In Europe, the removal of two major Russian oligarchs from sanctions lists signals a shift in EU enforcement priorities toward diplomatic leverage rather than strict punitive measures, which may affect compliance screening and frozen-asset management.

This analysis was produced automatically by a large-language-model system from the public sources listed below. It is AI-generated content: it reflects the sources and the model's processing, not an editorial opinion, and may contain inaccuracies. It is not investment, financial or legal advice and contains no call to action; base decisions on the original sources and on advice from qualified professionals.

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