Markets Rebound After President Trump Rejects AI Regulation: Sept. 14, 2026 

President Trump rejected growing calls from tech CEOs over the weekend to regulate and slow AI development and he demanded that they “don’t kill the Golden Goose!” The commander-in-chief successfully quelled turbulence on Wall Street, at least so far intraday, with the major averages clawing back more than half of the day’s heavy losses while the cyclically oriented Dow Industrial and Russell 2000 gauges even reached the green. The sharp equity declines were sparked by worries that AI poses risks to the human race, as its rapid advancement could enable the technology to overpower its own users, managers and directors. But the White House’s insistence on bolstering markets even has Treasuries rebounding into gains after the 10-year jumped north of 5% for the first time in 35 months, or since 2023. The early bond selloff was driven by worsening Middle East violence involving multiple nations amidst a cancelled meeting between Tehran and Gulf leaders. The combination caused WTI crude to soar to a three-month high just shy of $105 per barrel this morning. Indeed, fixed income markets are sensing a potential softening in Washington’s rhetoric in the next few trading sessions against the backdrop of the Republicans trying to sustain their narrow Senate lead in the midterm elections, in an effort that could boost the GOP’s chances by alleviating pain at the pump, suppressing interest rates and subduing volatility in stocks and credit assets. Additionally, tomorrow’s congressional vote on the Clarity Act will follow Republican’s acceptance of certain Democratic Party demands in the updated proposal, which is generating excitement in cryptocurrencies and prediction markets, with Bitcoin and Ethereum climbing strongly. Elsewhere, the greenback is strengthening, which alongside rising slowdown anxieties stemming from the possibility of lighter AI-related activities, investments and projects, is hurting non-energy commodities across the board.

White House Intervenes at a Critical Point

With certain market levels reaching dangerous resistance points that could generate economic pain, the White House has stepped in at a critical time to quell turbulence. Indeed, with the 10-year soaring above the pivotal 5% number and West Texas Intermediate (WTI) crude missing $105 per barrel by a whisker, Treasury Secretary Scott Bessent definitely needed help in suppressing volatility across stocks, fixed-income and commodities. Moreover, with the most significant driver of corporate earnings growth and GDP expansion at risk of slowing due to AI executives ringing alarm bells about the technology’s capability to threaten humanity’s existence, the US and Chinese governments have issued statements in protest of the industry’s communications. Both countries worry that a slower pace of adoption would derail cyclical momentum and lead to weaker tech stock performance and softer tax revenues. Apparently, the fears of being left behind in the technological race are currently outweighing the anxieties related to possible societal hazards, as Washington and Beijing continue to see AI as the top supporter of economic activity and market buoyancy while disregarding the potential harm towards civilization, at least for now.

International Roundup

Canada Inflation Matches Expectations

A slight easing in the rapid increase in gasoline costs helped Canada’s headline inflation remain unchanged last month with the Consumer Price Index once again climbing 3% year-over-year (y/y), according to Statistics Canada. The month-over-month (m/m) pace for August, furthermore, sank 0.1% after July’s 0.5% ascent. Both August metrics matched the economist consensus estimates. With the Middle East conflict disrupting the flow of energy commodities, gas stations jacked up stickers 22.8% during the 12-month period that terminated at the end of August, a moderation from the 25.7% y/y July print.  On a positive note, it appears that higher energy costs have had little, if any, impact on other economic sectors with the Core CPI up 2.4% and 0.1% y/y and m/m following July’s 2.3% and 0.2% results. Other variations of the price index, the Median and Trimmed Core, climbed 2% and 1.9%. Both were unchanged from July.

Within the monthly headline publication, the following items and the extent of their price changes became less expensive:

• Gasoline, 0.9%
• Transportation, 0.6%
• Clothing and footwear, 0.8%
• Food, 0.2%
• Recreation, education and reading, 0.1%
• Alcoholic beverages, tobacco products and recreational cannabis, 0.1%

The shelter category and the group consisting of household operations, furnishing and equipment both became 0.3% more expensive.

And Manufacturing Sales Decline

Sales of manufactured products in Canada slipped by 0.4% m/m in July, a steeper drop than the economist consensus estimate of 0.2% and a reversal from the 0.3% increase in the preceding month, according to Statistics Canada. Also in June, total revenues reached a record high of C$127.5 billion, a result of a 0.3% m/m climb. Raw materials, finished products and goods in process led the gains with increases of 0.7%, 0.1% and 0.1%. Unfilled orders also hit a record high of $134.6 billion with the value up 1.9% from June. Meanwhile, declines in transportation equipment, wood products and primary metals operations contributed to the country’s capacity utilization rate weakening from 82.2% in June to 80.7% in July.

Gate Price Pressure Slows in Hong Kong

Wholesale prices in Hong Kong were up 13.10% y/y during the second quarter after posting a 17.70% y/y hike for the first three months of the year, according to Census and Statistics Department.