US and Iran hold mediated talks at the UN as Tehran offers to reopen Hormuz within a week, sending Brent to a two-week low
The most concrete diplomatic opening in the US-Iran conflict in weeks played out on the sidelines of the UN General Assembly on Tuesday. Trump envoys Steve Witkoff and Jared Kushner spent roughly three hours in mediated talks with an Iranian delegation led by Foreign Minister Abbas Araghchi, with intermediaries shuttling between the two rooms throughout the day. Witkoff described the round as "promising" and "constructive," and Trump said it "went very well." The substance behind that tone is an Iranian proposal, first reported by Japan's Kyodo News and delivered to Washington through mediators about a week ago: Tehran would reopen the Strait of Hormuz within seven days if the US begins lifting its naval blockade of Iranian ports and halts military operations around the strait, and would then return to formal negotiations. Iranian state television listed the full set of conditions as lifting the blockade, releasing frozen Iranian assets, and ending the war "on all fronts". That last condition is much harder for Washington to meet than the first two.
Trump kept both options openly on the table in his own General Assembly address, saying he faces a "big decision" between a deal that lets Iran rebuild and moving to "annihilate" the Islamic Republic. A direct meeting between Trump and Iranian President Masoud Pezeshkian, which Trump had floated earlier in the week, has been ruled out for now. Oil traded the talks as a net de-escalation anyway. Brent fell for a fifth straight session to around $99/bbl, its lowest in two weeks and down from almost $104 on Monday morning. WTI dropped about 2% to roughly $90, taking its seven-day loss to nearly 13%. The physical backdrop has helped: US Central Command says oil and LNG flows through the strait over the past two weeks have been the highest in six months, thanks to escorted convoys. That supports the market's view that the supply squeeze is easing even before any deal is signed.
02Stock market & economy
The chip-led rally that kicked off the week kept going on Tuesday, though it narrowed. The Nasdaq Composite rose 0.45% to a second straight record close at 27,244.28. The S&P 500 was essentially flat at 7,764.64, just below its own record, and the Dow slipped 0.36% to 51,863.69 as energy names fell with crude. That came after Monday's much broader surge, the S&P 500's best day since early August: the index gained 1.49%, the Nasdaq 2.26% to its first record since June, and the Dow 0.71%. Monday's move was driven by upbeat US-China pre-summit talks, falling oil and softer yields, plus a sharp move in CPU makers covered below. Intel rose 12% and AMD about 9-10%, taking AMD past $1 trillion in market value for the first time. The 10-year Treasury yield rose to about 4.98% early on Tuesday before reversing to around 4.93% as oil kept falling. Gold slipped 0.8% to about $4,308/oz, weighed down by near-5% yields, a firm dollar and continued hawkish talk from Fed officials. Sixteen of eighteen Fed policymakers pencilled in at least one more hike this year in last week's projections, and the next decision comes in late October. European equities caught up with Monday's US gains on Tuesday: the Euro Stoxx 50 rose 1.31% to around 6,318 and the AEX added 0.66% to about 1,102. US futures are little changed early Wednesday ahead of two Fed speeches scheduled for mid-morning New York time.
For the unhedged USD sleeve (MSCI World ETF, S&P 500 ETF, High Dividend Yield ETF), the week so far has been almost ideal. Falling oil is easing the inflation pressure behind the Fed's tightening, while the AI trade that dominates these funds' top weightings is pushing to new highs. The concentration risk is growing too, though: this week's gains are coming disproportionately from a handful of semiconductor names, and Thursday's Trump-Xi summit is a direct test for those same stocks. High Dividend Yield ETF's energy tilt is the one part of the sleeve giving back ground as crude falls. For AEX index ETF and EURO STOXX 50 ETF, cheaper oil is a clear positive for an ECB that raised its deposit rate to 2.5% on 10 September with eurozone inflation at 3.3%. If crude keeps falling, pressure for a third ECB hike eases. The direct exception on the AEX is Shell, which moves with Brent and is the main drag on the index when oil falls.
03Also in the news
Russia-Ukraine diplomacy also got a push in New York. Trump and Volodymyr Zelensky held a bilateral meeting at the UN on Tuesday, joined by Witkoff and Kushner, and discussed what Zelensky called "de-escalatory steps that can open up the way to diplomacy". The most concrete of these is an "energy ceasefire" under which both sides would stop striking each other's energy infrastructure. Zelensky said afterwards that Ukraine is ready for one and ready to meet Vladimir Putin in a US-brokered trilateral format. Trump repeated that he thinks "they are going to make a deal" but gave no specifics. Moscow's core demand for a Ukrainian withdrawal from the remaining parts of Donetsk is still unresolved, and no date has been set for the next round of trilateral talks.
Xi Jinping's state visit formally begins today, running 23-25 September, with the White House arrival ceremony on Thursday morning. Weekend reporting on Sunday's ministerial talks added useful detail on where the gaps are. Treasury Secretary Scott Bessent reportedly rejected Beijing's request for a two-year extension of the Busan tariff truce and offered six months instead. The two sides did agree to set up a standing AI dialogue, and possibly a crisis communications line for AI incidents. A six-month extension would push the next deadline to around May 2027, keeping tariff risk live rather than resolving it.
04Off the beaten path
why AI agents are suddenly a story about ordinary CPUs, not just Nvidia's GPUs
For three years, "AI hardware" has effectively meant graphics processors: the Nvidia accelerators that train and run large models. This week's semiconductor rally was about a different chip entirely. The trigger was Meta's new Muse app, a personal AI agent that uses websites and apps on a user's behalf. It has topped the US free iPhone chart for several days, with about 1.8 million iOS downloads in the US and Canada in its first 12 days, versus 1.3 million for ChatGPT over the same stretch after launch. Muse is doing tasks rather than answering questions, and that workload looks very different from a chatbot's. Each agent runs inside virtual machines that can stay active after the user closes the app, and a lot of the work is coordination: scheduling steps, calling tools, passing data between sub-agents and checking whether a task is finished. That orchestration layer runs mostly on conventional server CPUs. Analysts cited by TrendForce estimate CPU-to-GPU ratios for some agent workloads anywhere from 4:1 to as high as 40:1, compared with a handful of CPUs per rack of GPUs in today's typical AI data centre.
The market has moved quickly on that idea: Arm rose about 17% on Monday, Intel 12%, and AMD crossed a $1 trillion valuation. The supply side is already tight: Intel CEO Lip-Bu Tan says the company can currently meet only about half of customer demand. AMD recently doubled its outlook for server-CPU market growth to more than 35% a year, reaching over $120 billion by 2030. For a diversified portfolio, the useful takeaway is less about any one stock and more about breadth. If agents really do need that many more CPUs, the AI spending boom behind so much of MSCI World ETF's and S&P 500 ETF's recent returns spreads beyond a single dominant supplier. That would make it somewhat less fragile than a pure-GPU story. The caveat is timing: the 40:1 figure is an analyst estimate for some workloads, not a measured industry average, and three days at the top of the App Store is not yet evidence of lasting demand. It's worth watching whether hyperscalers start citing CPU capacity in their next round of capex guidance.
Compiled from CNBC, Reuters, Yahoo Finance, TheStreet, Axios, Al Jazeera, The Times of Israel, The Jerusalem Post, Iran International, The National, Kyiv Independent, CNN, CSIS, TrendForce, 24/7 Wall St., Trading Economics, and TradingKey. This is a news summary, not investment advice — no position sizing or timing recommendations are implied.