Diplomatic Tensions Rise as Markets Eye US-China Summit

World leaders are gathering at the United Nations General Assembly in New York this week for diplomatic talks, but tensions remain high due to ongoing conflicts and trade disputes.

The meeting between US President Donald Trump and Chinese President Xi Jinping on Thursday is a key event, coming after Treasury Secretary Scott Bessent met with China's Vice Premier He Lifeng over the weekend to discuss trade relations and AI concerns.

However, oil prices have slipped back on hopes that Saudi Arabia will restore some flows through its East-West pipeline following attacks by Iran-backed Houthis last week.

The Federal Reserve's rate hike last week has also weighed on markets, with one more hike now fully priced in by year-end and a move as soon as next month seen as 50-50.