The Federal Reserve is expected to cut its benchmark rate by 25 basis points today, bringing it to a range of 3.75%-4%. Policymakers are moving to support the economy amid signs of a cooling labor market and subdued inflation, even as data gaps from delayed government reports cloud the outlook. The decision reflects a precautionary step to sustain growth and maintain confidence while leaving the door open for further adjustments if economic conditions weaken.

Treasurys have seen a significant drop in volatility recently, but investors are eyeing Federal Reserve Chair Jerome Powell's upcoming news conference for potential changes. With policymakers divided on interest rates amid a softening labor market and persistent inflation, any hawkish comments from Powell could push 10-year yields above 4%.

A stronger earnings outlook for artificial intelligence companies is easing concerns that the AI-driven global equity rally is a bubble. SK Hynix and Advantest have reported robust earnings, reflecting increased demand, while Nvidia has surged more than 8.5% in Asia after President Donald Trump said he would discuss Nvidia's Blackwell chip with Chinese President Xi Jinping.

Bond investors are divided on the long-term effects of artificial intelligence on interest rates, with some predicting higher rates due to increased economic growth and capital expenditure, while others expect deflationary effects from productivity gains. The timing and magnitude of AI's influence remain unclear, with factors like government debt and demographic shifts further complicating forecasts.

The Senate has failed for the 13th time to pass a bill to reopen the federal government, pushing the shutdown into its fourth week. The ongoing impasse is drawing increasing criticism from the largest federal worker union and continues to stall other legislative efforts. Supplemental Nutrition Assistance Program benefits are at risk of running out, prompting Senator Josh Hawley to propose a bill to fund the program.

President Donald Trump will meet Chinese President Xi Jinping in South Korea this Thursday to formalize a "framework" trade deal after recent negotiations. The accord is expected to have China resume U.S. soybean purchases and pause new rare-earth export controls for a year, while the U.S. delays additional tariffs and rolls back part of its 20% fentanyl-related levy.

Trade negotiations between the US and South Korea have hit a roadblock as President Donald Trump demands a $350 billion investment from South Korea during the Asia-Pacific Economic Cooperation summit. South Korean officials are concerned that such a large cash investment could destabilize their economy and have proposed loans and loan guarantees instead.