Markets and geopolitics moved together overnight: the Federal Reserve’s September meeting minutes signaled another interest-rate increase is likely before year-end, Bitcoin tested a critical support level, China and the European Union began a difficult second round of trade talks in Beijing, and oil markets balanced supply-recovery signs against the still-unresolved Strait of Hormuz standoff.
Fed minutes point to another rate hike by year-end
The Federal Reserve released the minutes of its September meeting on Wednesday night. The notes show that most policymakers thought another increase in the target rate would likely be appropriate before the end of the year, while keeping an open mind for each upcoming meeting. There was no urgency for an October move. Traders cut the odds of an October hike to about 17%, while a December hike is now largely expected, with markets pricing up to three more quarter-point increases by next June.
The minutes also showed Fed staff raising their inflation forecast for 2026 to 2028, with inflation now expected to reach 2% only in 2029. The war with Iran and heavy AI investment were flagged as factors pushing prices higher. The S&P 500 trimmed its losses to end about 0.2% lower near 7,801 after the release, and the 10-year Treasury yield held near 5.29% after spiking to 5.37% earlier in the session.
Bitcoin slips toward critical $83,000 support as ETF flows quiet down
Bitcoin fell back to around $83,000 on Wednesday, dropping to about $84,200 early in the day in a broad risk-off move. Analysts say holding the $83,000 area is crucial: a sustained break below $82,000 to $83,000 would end the stair-step bullish pattern and open a move toward $80,000 to $81,500, while holding support keeps a retest of $85,500 in play. Roughly $696 million in leveraged long positions were flushed out in the decline.
Ethereum traded near $2,570. Flows into US spot Bitcoin ETFs have gone quiet since a $102.7 million inflow on the first day of October, with trading volumes unusually thin — a sign that recent rallies are being driven by derivatives rather than fresh spot demand.
China and EU open second round of trade talks in Beijing amid tariff warnings
China’s commerce minister Wang Wentao and EU trade chief Maroš Šefčovič opened a second round of trade talks in Beijing on Thursday, described by officials on both sides as difficult. Chinese officials cut short their National Day holiday to prepare for the meetings.
Before the talks began, Beijing warned that a Franco-German proposal for a rapid-response trade tool — nicknamed the “trade bazooka” — would damage trust if activated. The EU is weighing extending its 2024 electric-vehicle tariffs to Chinese hybrid cars, whose exports to the EU surged from about 3,800 in October 2024 to roughly 50,000 a month. Tariff risk on Chinese goods in Europe keeps rising, with the EU’s trade deficit with China reaching €360.6 billion in 2025.
Oil steady near $101 as supply recovers, Hormuz risk lingers
Brent crude held around $101 a barrel and WTI near $88.85 as physical supply signals improved. Shell’s CEO said Middle East oil flows have recovered to about 80% of pre-conflict levels, Vitol estimated roughly 12 million barrels a day of crude exited the Strait of Hormuz over the past 7 to 10 days, and Saudi Arabia’s East-West pipeline is running at 5.8 million barrels a day.
But the standoff continues: about nine tanker-attack incidents were recorded in the Gulf in October so far, US Secretary of State Rubio claimed Iran has lost control of the Strait of Hormuz while Iran’s Revolutionary Guards claimed foreign naval vessels withdrew more than 1,000 km — conflicting rhetoric with no verified trade impact yet. Gaza talks in Sharm El Sheikh ended their morning session with no tangible results, and Britain’s deadline for closing its Israel consulate falls today.
Market snapshot
Bitcoin traded near $83,000 and Ethereum near $2,570, both under pressure. Brent crude held around $101 with WTI near $88.85, the 10-year Treasury yield sat near 5.29%, gold spot slipped about 0.7% to roughly $4,082 as safe-haven demand faded, and the S&P 500 closed near 7,801.