Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.

1328 ET - The AI trade is continuing to find strength with chip makers gaining strongly. Meta is also up 10% helped by the popularity of its Muse AI agent, the most downloaded free iPhone app in the U.S., according to Sensor Tower. The ubiquity of AI has prompted questions about liability, with the CEOs of OpenAI and Anthropic signaling that the U.S. government may need to take an active role in regulation. However, Treasury Secretary Scott Bessent says on CNBC, that he doesn't agree. "What did they try to do last week? It was, 'Well there's a 10% chance that we could destroy the world, but we want the government to give us a liability shield.' That's good business for them, bad business for the American people." (patrick.sheridan@wsj.com)

0936 ET - The Chinese yuan could strengthen further if a summit between President Trump and his Chinese counterpart Xi Jinping on Thursday proves constructive, HSBC's Paul Mackel says in a note. An extension to the trade truce reached in Busan, South Korea, in 2025 would bode well for the yuan, he says. The People's Bank of China has also recently increased its daily fixings for the dollar versus the yuan, showing more tolerance for yuan appreciation. "This could be partly related to a busy political calendar as well with the Xi-Trump meetings this week and an expected EU summit in mid-October." The dollar trades steady at 6.6953 yuan after reaching 6.6947 earlier, its lowest level since January 2023, according to LSEG. (renae.dyer@wsj.com)

0622 ET - Uncertainty over France and Germany's political outlook could test the euro's resilience versus the dollar, HSBC's Paul Mackel says in a note. "One should not conclude the uncertainty around U.S. mid-terms is dollar negative when there are European political ambiguities too." The risk of a no-confidence vote in the French government lingers after Prime Minister Sebastien Lecornu said he would reduce fiscal spending by 54 billion euros in 2027, he says. In Germany, Chancellor Friedrich Merz's Christian Democratic Union suffered heavy losses in two state elections at the weekend. The euro trades flat at $1.1479. (renae.dyer@wsj.com)

0334 ET - The losses suffered by Germany's ruling Christian Democratic Union in state elections should have a limited impact on the euro, ING's Francesco Pesole says in a note. The results of the election mostly reflect local dynamics rather than a verdict on Chancellor Friedrich Merz's reforms, he says. Still, delivering that agenda could become more challenging with CDU support falling and the political landscape becoming increasingly fragmented, he says. "These developments add some clouds to the euro, but are not enough to displace rate differentials and oil as its primary drivers." The euro falls 0.1% to $1.1474.(renae.dyer@wsj.com)

0257 ET - Bitcoin remains elevated above $81,000 after reaching a two-and-a-half-week high overnight. Bitcoin is supported by stronger exchange traded fund inflows, positive regulatory developments and investors closing earlier bets against the cryptocurrency, Zaye Capital Markets analyst Naeem Aslam says in a note. The U.S. Securities and Exchange Commission has introduced a five-year exemption for platforms that facilitate trading tokenized stocks and other securities through blockchain technology. This could strengthen confidence in the wider blockchain ecosystem by reducing uncertainty around how institutional products and trading venues will operate, Aslam says. A more constructive U.S. tone ahead of talks with China could also improve risk appetite, he says. Bitcoin rises 0.5% to $81,520 after reaching as high as $82,050 overnight, LSEG data show. (renae.dyer@wsj.com)

0237 ET - Oil prices fall 2% in early European trading as concerns eased over disruptions to Saudi pipeline flows and hopes grew for diplomatic talks between President Trump and Gulf leaders on the sidelines of the U.N. General Assembly in New York this week. Brent crude is down 2.1% to $101.70 a barrel, while the front-month WTI contract slides 2.2% to $98.11 a barrel. "Nevertheless, the market is still focused on the longer-term fallout from the attacks by the Houthi militant group on Saudi Arabia," analysts at ANZ Research say. "The broadening of the Middle East conflict also increases the odds of the conflict persisting for the foreseeable future, and keeping oil supply from the Persian Gulf constrained." According to data provider Kpler, Saudi Arabia's efforts to reroute oil exports are pushing ship-to-ship transfers in the Gulf of Oman close to their limits, putting pressure on local support services. (giulia.petroni@wsj.com)

0217 ET - U.S. Treasury yields fall in European trading as Brent oil prices slip toward $100 a barrel on a tentative improvement in the geopolitical outlook. "The immediate weakness [in oil] reflects a partial unwinding of the geopolitical risk premium rather than a collapse in underlying demand," Zaye Capital Markets' Naeem Aslam says in a note. President Trump's latest comments suggesting progress with China and leaving room for diplomacy around Iran have reduced some fear of an imminent supply shock, while stronger regional crude flows are also easing pressure on physical markets, he says. The two-year Treasury yield falls 0.8 basis points to 4.735%, while the 10-year Treasury yield drops 2.9 basis points to 4.966%, according to Tradeweb. (emese.bartha@wsj.com)

0206 ET - Both China and the U.S. are likely to seek to "maintain relative stability" in their relations, although a broad bilateral agreement appears unlikely, according to Goldman Sachs in a research note. Treasury Secretary Scott Bessent and China's economic czar, He Lifeng, will likely discuss artificial intelligence, trade and rare earths before the official meeting between President Trump and Chinese leader Xi Jinping, GS says. "With the Iran war having escalated in recent weeks...the Iran war is likely to be discussed by Presidents Trump and Xi as well," the bank adds. (tracy.qu@wsj.com)

2217 ET - Malaysia's near-term inflation pressures are expected to pick up as higher oil prices feed through to fuel-related costs, but headline inflation is likely to remain around 1.9%-2.0% in September, CIMB analysts Chew Khai Yen and Michelle Chia say in a note. The broader inflation outlook could remain benign, with softer core inflation pointing to contained underlying price pressures, they add. This supports CIMB's view that Bank Negara Malaysia will maintain the overnight policy rate at 2.75% at its November monetary policy meeting. (yingxian.wong@wsj.com)

2033 ET - Asian currencies consolidate against the dollar in early trade. Markets will scrutinize a meeting between President Trump and Chinese leader Xi Jinping later this week for signals on the future direction of U.S.-China relations, MUFG Bank analysts say in a report. Economic and trade issues are likely to dominate discussions, while technology and artificial-intelligence-related restrictions are expected to remain key areas of contention. "Any constructive post-meeting statement would support Chinese assets and regional supply-chain beneficiaries," they say. The dollar is little changed at 156.87 yen and 6.6943 offshore Chinese yuan, while the Australian dollar edges 0.1% higher to US$0.7125, LSEG data show.