Economy

Investors shrug off AI safety concerns and Iran war, sending market to a new peak.

Wall Street’s Nasdaq stock exchange has hit an all-time high, shrugging off concerns about AI safety risks, sky-high tech valuations and the energy shock caused by the United States’ war on Iran.

The Nasdaq Composite index, which is dominated by US tech giants such as Nvidia, Apple and Microsoft, rose 0.45 percent on Tuesday, taking its gains to date this year to more than 17 percent.

The Nasdaq 100, a narrower index that tracks 100 top companies, jumped 0.82 percent.

The S&P 500, the most popular measure of the overall US stock market, closed essentially flat.

Monolithic Power Systems, a Florida-based manufacturer of power circuits, and Canadian e-commerce company Shopify led the gains, surging 8.1 percent and 7.1 percent, respectively.

Micron Technology, one of the world’s top three memory chip makers along with South Korea’s SK Hynix and Samsung Electronics, rose 5 percent.

Chip giant Nvidia, the world’s most valuable company, gained 0.7 percent, while Apple edged up 0.2 percent.

Meta Platforms, which soared 11.4 percent on Monday on excitement surrounding its new AI assistant Muse, dropped 0.63 percent.

Major Asian stock markets opened higher on Wednesday, with Japan’s benchmark Nikkei 225 and South Korea’s Kospi up about 1.4 percent and 0.1 percent, respectively, in morning trading.

Hong Kong’s Hang Seng Index opened lower, falling more than 0.7 percent during the morning trade.

Oil prices were largely flat on Tuesday, after falling more than 3 percent the previous day amid improving oil flows out of the Gulf and hopes of renewed diplomacy between Washington and Tehran.

Futures for Brent crude, the international benchmark, were trading at $99.18 a barrel as of 01:00 GMT.

⁠US President Donald Trump on Tuesday told reporters that US officials ‌held a “very good” meeting with their Iranian counterparts on the sidelines of the United Nations General Assembly in New York, hours after using his address to the session to warn that he could “annihilate” Iran if Tehran did not agree to a deal on the war.

Trump, whose war on Iran is nearing the seven-month mark, said US and Iranian officials would hold another round of talks in the “very near future”.

Jay Goldberg, a senior analyst at Seaport Research Partners in San Francisco, said signs of diplomatic progress between the US and Iran had refocused investor attention on the potential of AI to generate profits after years of multibillion-dollar investments.

“We have been searching for a clear consumer use case to justify the AI spend, and many see Muse as just that product,” Goldberg told Al Jazeera.

“Personally, I think Muse is just a step in the right direction; there will be better products – probably soon – but Muse is one of those things that are so useful they get investors excited about AI prospects again,” Goldberg said.

Some graduates are paying thousands just to look employed. And parents are spending up to $50,000 on career coaches. Why is the entry level job market so broken? Al Jazeera’s Yasmeen ElTahan explains.

Countries including Germany, South Africa and Canada suggest international institution to set and enforce standards.

Twenty countries and the European Union have issued a call for international cooperation to ensure AI remains under human control, including the potential creation of a global oversight body to set and enforce standards.

The countries, including Germany, South Africa, Canada, Australia, the United Arab Emirates and Singapore, issued the joint statement on Monday as global leaders prepare to discuss the risks posed by rapidly advancing AI at the annual gathering of the United Nations General Assembly.

The declaration, released by the office of Finnish President Alexander Stubb, calls on governments and industry to act immediately to ensure that AI is developed in line with international law and remains under “human direction, oversight and control”.

“To realise AI’s potential, industry, governments and society must act now,” the statement says.

“We must address these risks and strengthen oversight – without widening the gap between countries in access to the benefits of AI.”

The declaration urges countries to develop and coordinate “common standards”, share reports of serious safety incidents, and explore the establishment of an international institution to “set standards, enable verification, and convene states when capability thresholds are crossed”.

Signatories include German Chancellor Friedrich Merz, Norwegian Prime Minister Jonas Gahr Store, European Commission President Ursula von der Leyen, Kenyan President William Ruto, Kazakh President Kassym-Jomart Tokayev and Turkish Foreign Minister Hakan Fidan.

The United States and China, the world’s two leading AI powers, did not join the statement, which remains “open for endorsement” by other countries.

US President Donald Trump and Chinese President Xi Jinping are expected to discuss AI when they meet at the White House on Thursday for their third face-to-face summit in less than a year.

Washington and Beijing, which are in a race to dominate cutting-edge technologies, have both rebuffed calls to slow down AI development to ensure greater safety.

Other AI players not among the signatories include India, South Korea, Japan, the UK and France.

The declaration comes as the AI sector is engaged in a heated debate about safety following calls for a slowdown in development by top industry leaders.

In an essay earlier this month, Anthropic CEO Dario Amodei called on firms to “slow the pace” of development to mitigate risks, a proposal that was swiftly endorsed by rivals including OpenAI CEO Sam Altman and SpaceX and Tesla CEO Elon Musk.

Amodei’s call followed a series of cases of AI models engaging in unsanctioned malign activity, including an incident in July in which AI agents being tested by OpenAI hacked the AI start-up Hugging Face.

In the latest intervention by industry on Monday, OpenAI said the US should lead an international effort to develop technical standards for advanced AI.

“The United States is well positioned to lead because its AI industry is at the technical frontier, and it still stands in a privileged global network position in critical areas such as finance, trade, defense, technology, and information systems,” the San Francisco-based AI giant said in a blog post.

“Leading now will determine whether the United States shapes the global AI framework or watches a fragmented, uneven, and conflict-ridden system take hold around it.”

The UN-backed Independent International Scientific Panel on AI, which examined the Hugging Face incident, on Monday also added its voice to calls for new guardrails, saying the cyberattack had exposed the “unravelling” of existing safeguards.

Luiz Inacio Lula da Silva is running in October’s election for a fourth non-consecutive mandate as Brazil’s president.

Brazilian President Luiz Inacio Lula da Silva and Senator Flavio Bolsonaro remain deadlocked in the latest polls, with the first round of Brazil’s election less than two weeks away.

Two new polls on Monday showed that the pair are statistically tied in simulated runoffs ahead of next month’s election. If no candidate wins more than 50 percent of valid votes in the October 4 first round, the two frontrunners advance to a runoff on October 25.

Lula is seeking a fourth non-consecutive term as Brazil’s president, but faces a challenge from the political right in Flavio Bolsonaro, the son of former far-right President Jair Bolsonaro, an ally of US President Donald Trump.

The elder Bolsonaro was ruled ineligible for office after Brazil’s top electoral court found he had abused his power while in office. He was later convicted separately over a plot to overturn his 2022 election loss to Lula.

A Quaest poll released on Monday showed Bolsonaro with 42 percent of voter support in a potential runoff, versus 41 percent for Lula.

Meanwhile, a BTG Pactual/Nexus poll has Lula receiving 46 percent of voter support, compared with 45 percent for Bolsonaro in a potential runoff.

The latest polls mark a narrowing from an earlier Quaest poll on August 5, which put Lula ahead by a wider five-point margin, 44 percent to 39 percent.

US pressure looms over election

Lula launched his re-election bid on August 2 at the Workers’ Party convention in Sao Paulo, casting himself as a defender of Brazilian “sovereignty” as pressure from the US administration looms over the race.

The US imposed two fresh rounds of tariffs on Brazilian products in July, which Lula denounced as an attempt to influence the elections through economic pressure.

The Brazilian leader is currently in New York, where he is preparing to address the United Nations General Assembly.

Lula met New York City Mayor Zohran Mamdani for the first time on Monday. In a brief statement to reporters after the meeting, the Brazilian president said the two had talked about problems common to both Brazil and the United States, particularly the rising cost of living.

FAA halts East Coast flights due to equipment outage, affecting major US airports in New York, Newark, and Philadelphia.

The United States Federal Aviation Administration (FAA) has halted flights to several busy East Coast airports amid an equipment outage, snarling more than 1,000 flights.

On Monday, the FAA issued ground stops at large commercial airports, including New York’s John F Kennedy International (JFK) and LaGuardia; Newark Liberty International in New Jersey, as well as Boston Logan and Philadelphia International Airport.

The flights were halted on the day that 130 world leaders and dozens of ministers were arriving in New York for the annual high-level meeting of the United Nations General Assembly.

US Transportation Secretary Sean Duffy said in a post on social media platform X that flights have resumed into New York’s LaGuardia and into Philadelphia, but that ground stops are still in effect at Newark, JFK, and Teterboro Airport in New Jersey. The ground stop has also been lifted in Boston.

FAA Administrator Bryan Bedford told reporters on Monday that it had “lost the primary circuit” at what is called Philadelphia TRACON, or Terminal Radar Approach Control, which controls air traffic into Philadelphia and airports across the busy northeast US airspace.

Bedford said that the backup fibre had a break and told reporters that it could take up to 13 hours to repair. He said the cut was between the city of New Brunswick, New Jersey, and Newark, New Jersey, which is home to Newark Liberty International Airport.

“An Amtrak construction crew accidentally cut into a fiber line in New Jersey which caused a telecom outage and forced FAA to pause flights in the Northeast,” Duffy said in a post on X.

Newark delays

At Newark alone, more than 1,000 flights had been delayed or cancelled. Throughout the US, there were nearly 4,000 delayed flights and 500 cancelled.

United Airlines said it would waive change fees for impacted travellers. Newark serves as a major hub for the airline.

“Flights that had been destined for Newark have either been held at their departure airport or diverted to alternative airports. Once the FAA outage is resolved, we will work to safely get our customers to their destinations and have issued a travel waiver to give our customers flexibility to manage their travel plans,” a representative for United Airlines said in a statement provided to Al Jazeera.

Newark has recorded the highest levels of delays and cancellations of any airport, according to FlightAware, which tracks flight disruptions in real time. As of 3pm Eastern Time in the US (19:00 GMT), 31 percent of departing flights from Newark had been cancelled, along with 29 percent of inbound flights. Meanwhile, 17 percent of departing flights from the United hub had been delayed, as had 17 percent of inbound flights.

A ground stop was also issued at Teterboro Airport in New Jersey, a private airport neighbouring New York City.

Scott Bessent says airports and companies servicing Iranian carriers risk being cut off from the US dollar system.

United States Treasury Secretary Scott Bessent says Iranian airlines could effectively be shut out of international travel from Wednesday, as Washington threatens foreign companies with secondary sanctions if they continue servicing the country’s carriers.

“On September 23, all the Iranian airlines will be shut down around the world,” Bessent told CNBC on Monday.

The warning is aimed not just at the airlines themselves, but at the airports, fuel suppliers, ticketing companies and other businesses they rely on to operate abroad.

“If they land, you cannot provide them with fuel, you cannot provide them with landing services, you cannot sell them tickets, or you will be knocked out of the dollar system,” Bessent said.

The threat marks the latest step in US President Donald Trump administration’s escalating economic campaign against Tehran, which has continued alongside the war between the US and Iran.

Earlier this month, the US Treasury imposed sanctions on all remaining Iranian airlines that had not already been targeted, as well as companies outside Iran accused of supporting the country’s aviation sector.

Iran’s aviation industry was already heavily constrained by years of US sanctions, which have made it difficult for carriers to buy new aircraft and obtain spare parts and maintenance services.

The measures are part of a much broader sanctions regime aimed at isolating Iran from the international financial system. US secondary sanctions threaten foreign companies that do business with Iran across sectors including energy, shipping, technology, gold and digital assets with penalties of their own.

China ‘very engaged’ on Iran sanctions

Bessent’s comments came a day after talks with Chinese Vice Premier He Lifeng, ahead of Trump’s meeting with Chinese President Xi Jinping on Thursday.

China is one of Iran’s most important economic partners and diplomatic backers, making Beijing’s cooperation potentially significant to Washington’s efforts to financially isolate Tehran.

Bessent said Chinese officials had been “very engaged” in the US pressure campaign. Washington was holding what he described as positive talks with Chinese financial authorities, including People’s Bank of China Governor Pan Gongsheng, about compliance with US sanctions on Iran.

Tehran, Iran – Amid dire fuel shortages and mounting economic challenges, the Iranian government is seeking cost-saving measures for government workers and other citizens to deal with the crisis.

On Saturday, the government set office attendance hours for 8am to 1pm from September 23 to the end of the current Iranian year (late March 2027), with the remaining contractual hours to be completed remotely.

Agencies must also designate one day a week when employees and managers travel to work by public transport. In recent days, government ministers have released videos showing themselves using the metro to commute to work as part of the campaign.

Metro and bus rapid transit (BRT) systems will also be free of charge until mid-November in a bid to encourage commuters to leave their cars at home. Worn-out government vehicles will also be replaced with electric, gas-powered or hybrid alternatives, although this is expected to take years to implement.

The reopening of universities is expected to be staggered and partial, with some lessons shifted online by authorities.

Government-linked offices are required to switch off heating and turn off lights after working hours, while schools, universities, healthcare facilities and operational services are to follow separate arrangements to be announced later.

President Masoud Pezeshkian signed a directive on September 12 instructing government agencies to facilitate remote work for suitable employees to save on petrol, electricity and natural gas costs for the state.

“We have begun consumption savings with the government,” Pezeshkian said earlier this month. This is seen as effectively framing remote work and other measures for government workers as in line with other energy-saving measures that the government has asked of the rest of the population.

Resource-rich Iran has dealt with energy crises before, rooted in mismanagement and dated infrastructure, when similar cost-saving measures were implemented. But the added pressure of war with the United States and Israel has forced the government to think of creative solutions to energy shortfalls.

In early September, the cash-strapped government raised the price of fuel for the third tier of quotas for a second time in less than a year, meaning that people will pay double for any petrol use beyond 110 litres (29 gallons) per month. Imported vehicles and some other categories of cars are also limited to the most expensive tier of fuel.

For the first five months of the current Iranian year, which ended on August 22, average daily petrol production was 122 million litres while consumption was at 132 milion litres, highlighting a shortfall in supply versus demand. In the first half of the sixth month, the gap between production and consumption was around the same, at a 10 million litre shortfall.

The US naval blockade of Iran’s southern ports in place since July has halted fuel imports that previously helped balance the gap. The blockade has also stopped Iran from exporting its oil via supertankers transiting the Strait of Hormuz, affecting its foreign currency income. Crude stored on open waters beyond the blockade line is still being gradually sold to China.

Oil and gas facilities, petrochemical companies and major fuel depots were also bombed by the US and Israel, impacting production and distribution. Oil Minister Mohsen Paknejad said in early September that “a significant portion of production capacity has now been restored, and the process is continuing”.

As rampant inflation continues to squeeze most Iranians, data released this week by the Statistical Center of Iran also highlighted the damage the war with the US has dealt to the economy.

Iran experienced a massive 10.1 percent year-on-year fall in real gross domestic product (GDP) and a 26.4 percent fall in oil and gas extraction between late March and late June 2026, the centre’s data showed.

Including oil, industries and mining were down 14.7 percent, while construction was down by 6.4 percent, services overall by 4.8 percent, and transport, storage and communications by 17 percent.

The government has not released any information on how many workers are estimated to be affected by the remote work directive, or how it expected efficiency to be impacted.

But after decades of mismanagement, corruption and inefficiency among government-linked organisations, some Iranians believe it highlights a wider issue of state inefficiency.

“My unpopular opinion is that if 85-90 percent of government sector personnel are fired and 70 percent of ministries closed down, absolutely no problem will occur in the country,” a user named Mohsen wrote on X.

Zabihollah Salmani, a deputy head of the Administrative and Employment Organisation of Iran, told reporters during a press conference in August that more than 2.43 million were on its payroll.

If council, fire brigades, social security and non-government organisation workers were included, this would bring the number to more than four million people. The average monthly pay for government personnel at the end of the previous Iranian year in late March 2026 was around 240 million rials ($104 at the current exchange rate).

Asked by reporters how many of these employees could potentially be taken off the payroll without hurting output, Salmani said, “We do not yet have these figures.” He added that agencies were being asked to submit that information.

About 1,075,000 people are on the payroll of the Education Ministry, including teachers and trainee staff, while 600,000 employees work under the Ministry of Health and its affiliated networks, according to official figures.

Amir-Hossein, a young man working at a research centre linked with the government-funded University of Tehran, said that since the start of the month, he had been assigned two days of remote work. Working hours were set for 7am-1pm before, but are to be shifted to 8am-1pm starting from Wednesday, per the government.

His work can be done on his laptop, but might require some coordination on the phone or short commutes to other centres, he said. Overall, the remote work lifestyle has been beneficial.

“Sometimes I get more work done than I would have at the office,” he told Al Jazeera, asking not to use his full name due to security reasons.

As Amir-Hossein regularly uses online ride-hailing services to commute to and from his job, working from home has been financially beneficial for him.

An Iran-based economist who spoke to Al Jazeera on background said the government measures are essentially crisis control at best, and not a long-term solution to the problem.

Amid the US-Israel war on Iran, the country’s economy has suffered a sharp contraction, with its crucial oil and gas sector taking the biggest hit as the United States tightens its economic and military pressure on Tehran.

Data released by the government-administered Statistical Center of Iran showed gross domestic product (GDP) shrank by 10.1 percent year-on-year between March 21 and June 20, the first quarter of the Persian calendar.

The period covers the opening months of the US-Israel war on Iran, which began on February 28.

The economic downturn has come as Iran struggles to export its oil, one of its most important sources of foreign currency, while also contending with high inflation, a weakening rial, and disruptions to trade and industry.

Here is what you need to know:

What does the economic data say?

The headline GDP number masks an even steeper decline in Iran’s energy industry. Crude oil and natural gas activity contracted by 26.4 percent compared with the same period a year earlier. GDP excluding oil, by comparison, fell by 4.6 percent.

The damage has spread beyond the energy sector. Industry and mining contracted by 14.7 percent, services declined by 4.8 percent, and manufacturing contracted by 2.5 percent. Agriculture was the exception, growing at 2.3 percent.

Those figures come amid an already difficult economic situation in the country. Earlier this month, Iran’s 12-month average inflation reached 69.9 percent, while food, beverage, and tobacco prices rose at nearly twice that rate. Official unemployment climbed to 9.1 percent in the spring.

The rial, meanwhile, fell from about one million to the US dollar a year earlier to more than 2.2 million in early September.

What is the latest with Iran’s oil exports?

Iran’s ability to sell crude has been dramatically curtailed by the US naval blockade, imposed for most of the war.

Iranian crude and condensate loadings collapsed from about two million barrels per day in March to roughly 740,000bpd in July and just 220,000-255,000bpd in August, according to estimates from Kpler and Vortexa.

TankerTrackers.com told the Reuters news agency that 29 tankers, carrying 36.11 million barrels of crude, were trapped in the Strait of Hormuz. Meanwhile, Vortexa estimated total Iranian crude afloat had fallen from 135 million barrels at the end of July to 107 million barrels by late August.

Is Trump winning the economic war on Iran?

By several economic measures, Washington’s pressure campaign is inflicting damage on Iran’s economy.

On September 6, total trade had fallen by 25 to 35 percent, President Masoud Pezeshkian said, with imports hit harder than exports. The US blockade of the Strait of Hormuz has made it hard for ships carrying imports to reach Iranian ports.

Tehran has also explicitly linked the end of the war to economic relief. Iran’s security chief Mohsen Rezaei told Al Jazeera on Saturday that its conditions include “the release of our frozen funds and an end to the naval blockade”.

In addition to the naval blockade, US Treasury Secretary Scott Bessent last month announced an economic pressure campaign against Iran, pledging to target its financial interests across the world. He said the US would target all of Iran’s sources of revenue, including oil, to prevent other countries and companies from doing business with Tehran.

The US-Israeli attacks and Iran’s retaliations have disrupted Tehran’s trade with one of its main economic partners, the United Arab Emirates.

The UAE last month announced an indefinite trade embargo on Iran after accusing its forces of carrying out several ballistic missile attacks, which Tehran denied, calling it a “false flag operation” by Israel and the US.

Chris Beauchamp, market analyst at IG Group, said, “Most wars are contests of stamina more than anything else.”

“The 10 percent drop in Iranian GDP is a sign that the US is succeeding in putting pressure on its foe. But the question rests, as it has done since March, on whether Iran can weather the fall in economic activity better than the US can stand the surge in energy costs,” he told Al Jazeera.

“For a regime prepared to do anything to stay in power, this news will make little difference, so long as the security forces remain loyal,” he added.

What is the latest with diplomatic efforts to end the war?

While Iran has taken a defiant stance against US economic and military pressure, it has indicated repeatedly that it remains open to diplomatic means to end the nearly seven-month-old war.

On Saturday, Rezaei told Al Jazeera that Iran conveyed a formal set of conditions to Washington through Qatari mediators for ending the war.

Iranian state media outlet IRNA reported on Monday that Pakistani Interior Minister Mohsin Naqvi was set to visit Tehran, without specifying the agenda or other details.

Mediators Qatar and Pakistan have been working to re-establish negotiations between the two sides since their memorandum of understanding (MoU) expired last month.

Meanwhile, Iranian Foreign Minister Abbas Araghchi will stop briefly in Qatar before going to New York for the UN General Assembly, IRNA reported.

Iran has repeatedly said it remains ready for any new strikes by Washington.

Rezaei said on Saturday Tehran did not rule out a new US strike against Iran, calling the possibility “very much on the cards” based on his country’s military assessments.

Mark Pfeifle, a Republican strategist and former White House and national security official, said Iran and the US are still willing to strike a deal.

“Sometimes in diplomacy it’s what’s taken off the table,” he told Al Jazeera.

Pfeifle said when Rezaei reiterated his demands for talks with the US, he spoke of “ending the blockade, releasing the frozen funds [and] stopping the attacks”.

“But he left off reparations and reconstruction money, which tells me that there’s a concrete sign that amongst all the rhetoric, which is still very strident, that the pressure campaign that the US is putting on Iran is having some effect,” he said.

“And it tells me that both sides are still looking for room to negotiate in the coming weeks.”

Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani has called on states to respect sovereignty as a condition for security in the Middle East, warning against “cycles of escalation” after “an earthquake” caused by the US-Israeli war on Iran.

The region needs a “framework in which sovereignty is respected” and no state can pose a “threat to another”, Sheikh Mohammed said on Sunday at the opening of the Qatar Economic Forum’s UN General Assembly-adjacent event in New York City.

Sheikh Mohammed – who is also Qatar’s foreign minister – described the economic fallout from the US-Israel war on Iran as “an earthquake” with “its shock waves” reaching far beyond the borders of the Middle East, “challenging assumptions about security and stability”.

“During the crisis, almost every conversation began with security and de-escalation, then turn[ed] to energy supplies, shipping routes, and with our investments, plans will continue. These were different expressions of the same question. When so much is being disrupted, what can still be relied upon?”

He said that Qatar has weathered the test to the “foundations” of the country’s economy and security, but acknowledged that the ongoing conflict in the region is having an impact.

“Permanent security cannot be built through arrangements that leave any state permanently exposed to insecurity,” Sheikh Mohammed said. “We must address the sources of tensions and build confidence.”

Reporting from New York, Al Jazeera’s Kristen Saloomey said that message “no doubt will be repeated” when Gulf leaders meet US President Donald Trump on Tuesday during the UN General Assembly.

Qatar’s $38bn domestic investments

The PM also outlined a domestic shift in Qatar’s investment strategy by pledging more than $38bn in spending on Qatari infrastructure over the next five years.

“That’s meant to attract private investors and send a message of Qatar’s resilience,” Saloomey said, while the PM is nonetheless acknowledging that the ongoing conflict is “having an impact on the region”.

The UNGA starts on Monday and ends on Friday.

The situation in the Middle East and its global ramifications are expected to be high on the agenda during speeches and diplomacy.

Also on Sunday, Qatar’s Foreign Ministry spokesman, Majed Al-Ansari, told US media in New York that the mediation efforts by his government are ongoing to restart talks between Tehran and Washington to end the US-Israel war on Iran.

Scott Bessent and He Lifeng meet in New York for US-China talks ahead of the Trump-Xi meeting later this week.

Top economic officials from China and the United States have begun talks in New York City aimed at clearing the way for possible agreements on trade, artificial intelligence and critical minerals ahead of a meeting between US President Donald Trump and Chinese President Xi Jinping later this week.

US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng began talks at JPMorgan Chase’s Manhattan headquarters on Sunday morning, with US Trade Representative Jamieson Greer also taking part.

The talks come four days before Trump is due to host Xi at the White House, with both sides looking to ease tensions between the world’s two largest economies.

“I’m looking forward to having focused, fulsome and constructive talks today that will set the stage for our leaders’ meeting,” Bessent told reporters as he arrived.

At the top of the agenda is a fragile US-China trade truce due to expire on November 10.

The agreement, reached in Busan, South Korea, last November, capped US tariffs on Chinese goods at about 20 percent after a tit-for-tat trade fight briefly pushed tariffs into the triple digits.

Washington is also pressuring Beijing over its supply of rare-earth magnets and other critical minerals, crucial to industries ranging from cars to advanced semiconductors.

China promised to restore the flow of critical minerals under last year’s truce, but a senior US official said on Friday that Beijing’s performance had “not been up to par”.

AI enters the talks

Artificial intelligence (AI) is also expected to feature prominently, adding a relatively new issue to negotiations long dominated by trade.

Bessent has said the countries could discuss AI “guardrails” aimed at addressing shared risks, including preventing powerful models from falling into the hands of malign non-state actors.

The talks are expected to cover both open- and closed-weight AI models. Chinese open-weight models have increasingly attracted US companies, in part because they can be cheaper than closed systems developed by US firms such as OpenAI and Anthropic.

“The United States remains the leader in AI,” Bessent said. “And we are open to discussions on avoiding shared risks and avoiding bifurcation of our two systems.”

Another potential point of friction is Iran. China remains one of Tehran’s most important economic partners and buys much of its oil, making Beijing an important target of Washington’s efforts to increase economic pressure on Iran as the US-Israel war on Iran enters its seventh month.

Expectations remain low

Despite the packed agenda, analysts are not expecting a sweeping breakthrough.

“I think there will be some show of deliverables because of the fact that it’s a presidential summit coming, but I don’t feel like we’re on the verge of some sort of breakthrough,” Anna Ashton, a China trade analyst and founder of Ashton Intelligence, told Reuters.

“I think status quo is probably both sides’ general best expectation.”

Former US Deputy Secretary of State Kurt Campbell similarly said the immediate goal may simply be keeping tensions contained.

“One of the only things we can hope for in the short term is a truce, and that this will likely continue through the remainder of this year,” Campbell said.

Sunday’s negotiations are part of a series of meetings between Bessent, He and Greer over the past 16 months aimed at hammering out areas of agreement before Trump and Xi meet face to face.

EDINBURG, Texas — Quinten Martinez, pumping gas under a hot south Texas sun, remembers a time when fueling up didn’t require difficult decisions.

“Is it going to be groceries this week?” said the 28-year-old Amazon delivery driver as he watched the numbers tick higher. “Is it gonna be getting gas in our tank to go to work?”

He shook his head when asked about President Trump’s assertion last week that higher gas prices are a small price to pay for the war with Iran.

“I don’t feel like it’s a good trade-off,” Martinez said. “I don’t feel like this is good for anyone.”

Voters across the country, and across the political spectrum, tend to agree.

Interviews with voters in several states, along with a fresh round of national polling, reveal an overwhelming sense of frustration that skyrocketing gas prices — a direct result of Trump’s war — are creating serious and sustained financial hardships for America’s working class.

The acute concerns are adding to a bad political environment that may be worsening for Trump and his Republican Party as early voting gets underway in the November midterm elections.

Historically, the party holding the White House has suffered major losses in midterms. About seven weeks before election day, Republican candidates at all levels are struggling with the additional burden of Trump’s weak approval ratings, an unpopular war and an affordability crisis that Trump and his congressional allies had promised to fix.

But when Trump campaigned in North Carolina on Wednesday, he played down the effect of surging gas prices.

“You have a little higher. It’s a very inexpensive price to pay for what we’ve done,” Trump said of the war, which he describes as necessary to prevent Iran from obtaining a nuclear weapon. “Remember that. It’s a little more. Frankly, even if it was a lot more.”

‘Gas prices matter’

Despite what Trump says, there are few things that may matter more this election year than the price of a gallon of gasoline, according to political operatives in both parties.

Gas prices are moving sharply in the wrong direction at a time of year when drivers typically get some relief. The national average for a gallon of gas reached $4.48 on Friday, according to the American Automobile Assn., up roughly 17 cents over the last week, 40 cents in a month and $1.27 from a year ago.

“Gas prices matter because they’re one of the few economic indicators voters experience and see in real time,” said veteran Republican strategist Chris Wilson. “The price is literally staring them in the face several times a week. So I wouldn’t minimize the frustration we’re seeing, particularly among working- and middle-class voters.”

Interviews with voters last week found bipartisan frustration and disappointment.

Democrats and unaffiliated voters were especially motivated to punish Republicans at the ballot box for their economic hardship, while some of Trump’s working-class supporters pledged to support Republicans this fall, even if they weren’t happy with the president’s leadership on the economy.

Some Republicans say they’re disappointed

Dan Lloyd, who voted for Trump, lamented the president’s leadership as the 63-year-old carpenter paid $4.39 a gallon to fill up his pickup truck in Mesa, Ariz.

“He hurt himself stepping into this,” Lloyd said of Trump. “Where’s all this oil from Venezuela? I thought we were flush with gas and everything, but no. The American people eat it every time, whether it’s interest rates, food, gasoline.”

Still, he expects to vote Republican in the midterms.

“I think the Democratic Party has lost its way,” Lloyd said. “I just feel like the whole system’s on the verge of collapse.”

In sweltering Edinburg, Texas, 52-year-old Kristin Jimenez shrugged off the rising price of gas after filling up her Mercedes.

“We’ve paid the same price under Republican presidents, we’ve paid this price under Democrat presidents,” said Jimenez, a mother who runs a small business. She plans to vote for a Republican because they’re the “lesser of two evils.”

She said gas prices aren’t part of her calculation.

“We don’t mind paying $8 for a cup of coffee at Starbucks, but we have a problem paying four bucks at the pump?” she said. “Make it make sense.”

More than 1,500 miles to the north in central Michigan, 35-year-old Garth Johnson is trying to make ends meet running a deep-cleaning business with several gas-powered vehicles and one machine fueled by diesel, which was $6.79 a gallon as he filled up his SUV.

Johnson voted for Trump, but doesn’t know what he’s going to do in November. He said he doesn’t feel qualified to second-guess the president’s evaluation of the war, but he’s feeling financial pressure in his own life.

“I like a lot of the things he’s done,” Johnson said, but added, “I’m a little guy and I’ve got to live my life.”

Other voters are less forgiving

Midterm voting was already underway Friday in Virginia, where Alan Johnson said Trump seems to have “no empathy” for Americans who are struggling financially.

“With the gas prices being what they are and continuing to grow, we’ve got to do something. Hopefully the Democrats can get into office and turn the ship around,” said the 60-year-old engineer, who cast ballots in the morning for Democrats for the U.S. Senate and House.

In Raleigh, N.C., teacher Brittney Bivins sees surging gas prices as evidence that Trump and his Republican Party aren’t dealing with the issues that matter most to people like her.

“He really doesn’t care about everyday people,” the 45-year-old said. “He can afford the gas, but most of us can’t. So it feels like he’s not even connected to his own people.”

Bivins, who described herself as an independent, said she’s eager to support Democrats this fall — especially the party’s emerging democratic socialist wing.

At a gas station in Lansing, Mich., Rina Risper spent $50 on eight gallons of premium gas.

“When I rolled up I was in shock, actually, and said, well, maybe I should drink water instead of having that $4.99 bottle of whatever it was I was gonna get,” Risper said. She thinks Trump’s tariffs will make affordability even worse.

“We’re not in Miami. We’re in Lansing, Michigan,” she said. “It’s really going to impact our people.”

Polls reflect economic distress

Nationwide, more than three times as many voters say they are falling behind financially as getting ahead, according to a Fox News survey released Wednesday. By a 15-point margin, Democrats are considered the party that would better handle inflation and prices at a time when the cost of living and the economy are voters’ top concerns.

The Fox poll found that 61% of voters say gas prices are a major problem for their household, compared with 48% two years ago, while 52% say the same for healthcare costs, compared with 44% in 2024. Majorities also view housing costs and grocery prices as major problems, although neither has increased.

Overall, nearly two-thirds of voters (63%) say the administration has made the economy worse, compared with 52% in September 2025, including one-quarter of Republicans. Only 46% of Republicans say the administration has improved the economy, while about one-quarter don’t see an impact.

Back in rural south Texas, an area where Trump’s GOP made gains in recent elections, Martinez, the Amazon delivery driver, could not contain his frustration.

Trump “likes to tout that we are the best economy in the world,” said Martinez, but in rural towns, “you don’t see any of the winning, you don’t see any of the ups that he’s talking about.”

“You just see struggles for day-to-day life,” he said.

Peoples, Bedayn and Cooper write for the Associated Press. Peoples reported from New York and Cooper from Mesa. AP writers Allen G. Breed in Raleigh, Jacqueline GaNun in Lansing, Sarah Rankin in Richmond and Nicholas Riccardi in Mason, Mich., contributed to this report.

Tehran, Iran – Hossein, a 32-year-old marketing specialist based in Tehran, has been thinking of replacing his 13-year-old Iranian-made car with a newer model.

Even though he earns about four-and-a-half times the minimum wage after a recent pay rise – his salary is now close to 900 million rials (about $390 at the current exchange rate) – imported vehicles are not even remotely affordable for him.

Even finding a locally made car might be out of his budget, with an economic crisis gripping the country since the United States and Israel launched a surprise war on Iran on February 28 and later enacted a crippling siege and sanctions on the country.

“I’m losing hope of ever being able to buy a new domestic production car too, unless the country opens up and becomes a bit more normal again,” Hossein, who asked to keep his full name confidential for security reasons, told Al Jazeera.

His old manual Peugeot 206 model, an originally French-made car but now produced domestically after foreign counterparts left Iran due to sanctions, can fetch up to 10 billion rials ($4,350) if he sells it towards making a new purchase. However, his replacement options are limited.

Upgrading to a slightly improved Peugeot 207 with an automatic gearbox could cost him 28 billion rials ($12,170) now. This means that, after selling his car, he would need more than 20 months of his entire salary.

A domestic sedan Shahin model costs more than 31 billion rials ($13,480), and a crossover Reera is priced at more than 43 billion rials ($18,700).

With these options, he would need to save about 24 months and 37 months of his whole salary, respectively, and that is if prices remain stable and he does not spend a rial on anything else. But the reality of the fast-rising living costs and lagging incomes in Iran means he can barely put aside any money, let alone afford a new car.

Domestic car prices have mostly risen 40 to 80 percent since the start of the war, while some vehicles sell for more than 130 percent of their September 2025 costs.

The costs of maintaining the vehicles are also rising much faster than people’s salaries. Domestically produced tyres, motor oil, brake pads and clutch kits have at least doubled since last year, with some car parts having more than tripled in price.

Domestic vehicles have generally low safety standards, meaning that they contribute to staggering road accident deaths. At least 1,609 Iranians have been killed so far on intercity roads in the current month of Shahrivar of the solar Hijri calendar, which ends on September 22. More than 20,000 people lose their lives on the roads every year. In comparison, fewer people in the whole of the European Union, nearly five times Iran’s population, died on roads last year.

Iran’s fuel-guzzling cars also contribute to smoke-congested city streets, degrade vehicles faster and increase fuel costs, just as petrol prices have risen for users.

How did we get here?

Experts say, due to a combination of protected state-linked businesses, privileged access, economic isolation and a curtailing of imports, Iranian households have no choice but to pay exorbitant prices – compared with their salaries – to buy low-quality cars.

The damage from the war, including the extensive bombing of multiple steel giants by Israel and the US, has only added insult to injury. The naval blockade of Iran’s southern ports has prevented goods coming in from popular neighbouring markets like the United Arab Emirates.

Under such circumstances, domestic vehicle manufacturers have little incentive to improve.

End customers are also beset by government charges, currency and financing costs, margins levied by murky intermediaries – and in numerous documented cases, industry corruption.

“People are forced to buy expensive low-quality cars whose real prices should be a quarter of global prices, and this is a direct harm done to them,” Mohammad Rashidi, a member of the presiding board of Iran’s parliament, told local media on Saturday. “The traces of a mafia system are visible throughout the process.”

His claims echo those of other officials and state-linked media, who have openly described the industry as resembling an organised crime operation.

According to the latest figures released by state media, about 233,000 cars were manufactured or assembled in Iran in the first five months of 2026, compared with 366,000 the year before. Only about 25,000 vehicles were imported in that period.

Only a handful of state-linked companies or intermediaries are allowed to import vehicles, with duties plus value-added tax increasing final prices up to 200 percent.

The government and parliament have discussed lowering import tariffs this year, with no agreement announced so far.

The premiums are more visible for high-end cars, with a 2026 Toyota Land Cruiser VXR going for approximately 660 billion rials ($287,000) in Iran at the moment, while the same model is available for about $86,000 in the UAE. The same story applies to most other models, at different rates depending on the rarity of the vehicle and the availability of parts.

The price of a mid-range Chinese-designed SUV sold as Exeed VX in international markets is listed at about $32,000 in China, while it is priced at about $42,000 in the UAE. The same car, assembled from imported parts by a state-linked company in Iran under a different name, currently costs Iranian customers the equivalent of $53,000.

The bizarre situation was on full display during a three-day “international” car exhibition in Tehran last week that mostly featured Chinese-manufactured vehicles. These remain available in Iran despite the US sanctions, since Tehran exports almost all of its oil to China and barters this for goods, including cars.

Some domestic manufacturers and importers were absent, either because they had no products to offer or because they had angry customers who registered months ago to get vehicles they never received. Spare parts for some of the vehicles on display are currently either not available in the Iranian market or cost several times their price in international markets.

Even the cheapest vehicles offered at the exhibition were completely unaffordable to the average Iranian. It would take a worker on the minimum wage with standard allowances 50 years to buy an XPENG G9, a Chinese-made electric SUV priced at 120 billion rials ($52,150), on his or her salary, without spending a rial on food, housing or clothing.

Still, there were huge queues outside the exhibition centre each of the three days.

“It was sad because most people just came to take pictures with the cars they knew they could never afford,” a young man who attended the exhibition told Al Jazeera. “The doors of the cars were locked too.”

The Iranian lender has faced years of Western sanctions over alleged ties to Tehran’s nuclear programme.

Turkiye’s banking watchdog has revoked the operating licence of Iranian lender Bank Mellat’s branch in the Turkish city of Istanbul.

“It has been decided to revoke the operating licence of Bank Mellat, Head Office in Tehran, Istanbul Turkey Central Branch,” read the decision by the Banking Regulation and Supervision Agency (BDDK), published in the Official Gazette on Saturday.

The regulator said the decision was taken under a clause of Turkiye’s banking law allowing a bank’s licence to be revoked or withdrawn if its continued operation is deemed to pose a risk to depositors’ rights or to the security and stability of the financial system.

Bank Mellat has been subject to Western sanctions for years over accusations that Tehran was pursuing a nuclear weapon under the cover of a civil nuclear programme.

Those sanctions were lifted as part of a landmark 2015 deal between Tehran and world powers to curb Iran’s nuclear ambitions. However, the United States unilaterally pulled out of the agreement in May 2018, reimposing economic sanctions on the country.

Bank Mellat was hit by further US and Gulf sanctions in 2019 after being named as one of 25 entities linked to Iran’s Islamic Revolutionary Guard Corps (IRGC).

The Turkish notice did not cite the US measures or specify operational issues.

Earlier this month, the US Treasury Department imposed sanctions on a small Turkish investment bank and two subsidiaries over alleged ties to Iran.

The Treasury Department accused Golden Global Yatirim Bankasi Anonim Sirketi (Golden Global Bank) of facilitating “tens of millions of dollars’ worth of transactions for the Islamic Revolutionary Guard Corps-Qods Force” and providing the Iranian government with banking access to move its funds internationally.

Golden Global Bank has denied the accusations.

Sanaa, Yemen – Ahmed Yahya, 28, fills his taxi with 10 litres of petrol as he begins his workday early in the morning.

“I feed my taxi with fuel first so that it can help feed my family,” Yahya, a taxi driver, said as he wiped the dust from his front window at a petrol station on the outskirts of Sanaa.

Up until earlier this week, Yahya used to pay 4,750 Yemeni riyals, the equivalent of roughly $8.90 in Houthi-controlled areas of Yemen. The price had remained unchanged for about four years in territory under the rebel group’s control – including the capital Sanaa.

But then, on Monday, the Houthis announced a roughly 10 percent increase in the price of petrol, up to 5,250 Yemeni Riyals ($9.80). After years of economic misery, Yahya described the price hike as another “painful surprise to an already devastated people”.

The Houthi-run Yemen Petroleum Company said the diesel and petrol price increase was the result of a “global increase in fuel prices”, and promised that it would be temporary. The increase in global oil prices this year comes off the back of the impact of the United States-Israel war on Iran. But, more recently, the Houthis’ own capture of Yemen’s southern Red Sea coast from government forces last week, and attacks on Saudi Arabia, have played a major role in increasing prices.

“When I heard the announcement of the new fuel price, I was shocked and frustrated. We’re hardly surviving, and this price increase will make survival even harder,” said Yahya, as he lamented another burden in a country where 18 million already face acute food insecurity – a lack of reliable access to enough food.

‘Rent or food?’

Yahya, a father of three, has been working as a taxi driver for five years. Although the job helps make ends meet, he feels financially insecure, especially with the ongoing changes in food and fuel prices.

“My family spend about 75,000 Yemeni riyals [$140] a month on food expenses such as flour, rice and cooking oil. With the fuel price rise, we will need at least 85,000 Yemeni riyals [$159] a month for the same food items,” said Yahya.

The resumption of fighting in Yemen in the past few months, after a four-year period of relative calm in the country’s war, has contributed to the price rises. But for Yahya, relatively safe in Sanaa, it’s the increased expenses that are the more troubling development.

“When prices rise, they affect what we eat, drink, and how we live,” he said. “Let me give you an example: I pay 25,000 Yemeni riyals [$47] in rent every month. With the increase in food prices, putting money aside to pay the rent has become more challenging. What is the priority? Rent or food?”

An April report by the International Monetary Fund (IMF) said that Yemen’s internal conflict has led to significant macroeconomic vulnerabilities and a marked decrease in income per capita, leaving more than half of the population in urgent need of humanitarian assistance.

“It [the conflict] has caused widespread food insecurity, disease outbreaks, mass family displacement, and limited access to clean water,” the report said.

Risky and costly transportation

One of the links between the renewed fighting and the increase in prices is the longer distances needed to transport products across the country, as truckers avoid roads near the front lines.

“A truck carrying goods from the south to the north or vice versa now takes up to a week to reach its final destination. Before the renewed fighting, a similar journey would have taken three days or less,” explained Saleh Abdullah, a shopkeeper in Sanaa.

The increased transportation costs, including the higher fuel prices, are passed on to the consumer.

“This means no family is immune to this trouble,” Abdullah said. “Whether it is the flour, the baby milk, the fruits, the vegetables, or anything else, families will feel the pain of price increases.”

“Some customers become angry at us when we sell products at a higher price,” he added. “We didn’t impose prices. We just react and adapt to the changes in the country or the region.”

Ibrahim Abdu, an employee at the Nehm customs checkpoint in Sanaa governorate, said the number of trucks arriving in the capital has declined over the past few weeks.

“Fighting has cut off many roads, and merchants have avoided risking their products and drivers,” he told Al Jazeera.

‘A hunger multiplier’

Years of war have taken a heavy toll on Yemen’s economy, disrupted businesses, and pushed millions of people into poverty and food insecurity. Against this bleak backdrop, the country’s humanitarian tragedy has been worsening.

Ahmed Mohammed, a former humanitarian worker in Hodeidah, describes the fuel price rise as a “hunger multiplier” in war-torn Yemen.

“If a breadwinner struggles to buy a family three meals a day, he may be able to afford only two given the rising price of food commodities. This will deepen hunger among families,” said Mohammed.

He added: “War is ugly, and one of its ugliest aspects is seeing a family unable to afford a kilogramme of flour, sugar or rice.”

The UN Refugee Agency (UNHCR) warned this week that the violence threatens to trigger a humanitarian crisis as more people are displaced, pressuring communities with limited resources.

A multi-faceted impact

Wafiq Saleh, an economic researcher and executive director of the Taiz Centre for Yemeni-Gulf Studies, said the 10 percent hike in fuel prices in Houthi-controlled areas deals a blow to Yemeni consumers.

“Its impact will manifest as a major inflationary wave, placing a heavy burden on the most vulnerable and income-deprived segments of society,” Saleh told Al Jazeera.

While this price increase may appear modest in percentage terms, its effects extend far beyond the petrol station, rippling through various goods and services and creating new hardships, according to Saleh.

“Petroleum products serve as intermediate inputs for a wide range of goods and services. Consequently, a 10 percent rise in fuel prices does not merely increase people’s expenses by 10 percent; it triggers a cascading effect on prices,” he said.

“The most severely affected sectors include agriculture – which relies on diesel for crop irrigation – and the transport and services sectors, where rising costs immediately drive up passenger fares and food prices.”

He added that the increase would also affect water and electricity services, many of which rely on diesel-powered generators, further increasing the cost of basic services.

Small- and medium-sized enterprises are similarly affected.

“Small enterprises are operating on narrow profit margins, and they may be forced to either cease operations or pass the increased costs on to the final consumer,” Saleh said.

Italy’s defence minister warns of severe economic fallout if Bab al-Mandeb becomes impassable, bypassing EU delays.

Italy will deploy warships to ensure safe passage for its commercial vessels through the Bab al-Mandeb strait, Defence Minister Guido Crosetto said, adding that Rome would not wait for a joint decision from the European Union.

“We have the capabilities to protect the passage,” Crosetto said, warning that if the waterway became impassable, the economic consequences would be severe.

The Italian defence minister said that Rome “must not allow bureaucratic delays in decision-making to exacerbate an already complex situation”.

Bab al-Mandeb links the Red Sea to the Gulf of Aden, forming one of the world’s busiest shipping corridors between Europe and Asia and a critical route for oil, gas and container traffic heading to and from the Suez Canal.

Roughly 12 to 15 percent of global trade has historically passed through the narrow waterway, which separates Yemen from Djibouti and Eritrea on the African side and is only about 30km (19 miles) wide at its narrowest point.

The strait’s importance has grown sharply since Iran effectively seized control of the Strait of Hormuz earlier this year amid its war with the United States and Israel, choking off the world’s most important oil chokepoint and pushing much of the Gulf’s crude exports towards alternative routes.

Saudi Arabia, in particular, has increasingly relied on pipelines and Red Sea shipping to bypass Hormuz altogether, making the Bab al-Mandeb strait one of the last major arteries still open to Gulf oil reaching global markets.

Control of the strait has been contested for years, as Yemen’s government, Houthi rebels and, at times, forces in the region have held stretches of its coastline at different points since the war in Yemen began in 2015.

The significance of the strait has been hit dramatically in the past few weeks, when the Iran-backed Houthi movement launched a rapid offensive that brought the entirety of Yemen’s western Red Sea coast under its control, including several strategically located islands.

The advance has given the Houthis effectively unrestricted access to the waterway, a development seen as a major setback for international shipping, given the group’s history of attacking vessels it associates with the US or its allies in the region.

The US and the European Union have already carried out military operations aimed at better protecting merchant ships from Houthi attacks in the area, though those efforts have struggled to fully secure the route as fighting in Yemen has escalated.

DEVELOPING STORYDEVELOPING STORY,

The 25 basis-point hike is the first raise in three years and comes ahead of critical midterm elections in the United States.

The United States Federal Reserve has said it will raise interest rates by a quarter of a percentage point as inflation, driven by soaring fuel prices amid the US-Iran war, continues to weigh on the economy.

The Fed, which is the central bank of the US, said on Wednesday that it will hike interest rates by 25 basis points to 3.75 percent to 4 percent.

It is the first hike in more than three years and comes just weeks before the US midterm elections, despite repeated demands from US President Donald Trump to lower rates.

“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient,” the Fed said in a statement on Wednesday.

“Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.”

After Wednesday’s hike, Fed officials expect one more rate increase this year, according to their quarterly projections.

CME FedWatch, which tracks the likelihood of monetary policy decisions, forecast a 92.3 percent chance of the Fed increasing rates to 3.75 to 4 percent. A week ago, that forecast was a 40 percent chance of a quarter-percent rate increase.

But in the days since, a slew of data shifted those expectations.

For one, consumer prices jumped in August by 0.4 percent, the highest increase in four months. On an annual basis, prices rose 3.4 percent, matching the increase recorded in July, while the job market remains healthy.

Since then, benchmark crude oil prices have continued to soar as strikes in the US-Israel war on Iran have intensified. Brent crude hovered near $109 per barrel on Tuesday.

The average price for a gallon (3.8 litres) of petrol is $4.36, up 14 cents in the past week, and up from $4.06 in the last month, according to the American Automobile Association (AAA), which tracks daily petrol prices.

Diesel, on the other hand, was at $6.31, the highest recorded average and roughly double from a year ago. That, in turn, is expected to further stoke prices as diesel is used in trucks to haul everything from fruits and vegetables to steel and cement.

At the same time, the benchmark 10-year Treasury yield broke above the psychologically important 5 percent threshold on Tuesday, hitting 5.02 percent, its highest level in 19 years. The yield serves as a benchmark for borrowing costs, including car loans and home mortgages, and is a bellwether for inflation.

“The economy is in an unusual place,” Michael Klein, professor of international economic affairs at Tufts University’s Fletcher School and executive editor of EconoFact, a nonpartisan economic and social policy publication, as unemployment remains at a comfortable level while higher prices continue to stick, sending inflation beyond the Fed’s target of 2 percent.

“There [has been] a lot of pressure on Chairman Warsh to raise interest rates because of inflation coming in high, and that has been compounded by concerns about Trump’s pressure” as the president has continued to demand that interest rates be lowered, Klein said.

“Higher interest rates tend to weaken the economy… but if the market believes that there’s going to be a rate increase, it’s priced in already as prices move on news, so this won’t be news,” Klein said, adding that should help steady yields.

HILTON has revealed 10 new locations are set to come to the UK – and one is coming to a major capital city.

The new hotels will form part of the chain’s “value-focused” brand.

Ten new hotels, operating under the Spark by Hilton brand, are set to come to major railway stations, stadiums, motorways and visitor attractions across the UK.

The locations, confirmed to open in Cardiff, Coventry, Derby, Doncaster – among others will add a total of 672 rooms to Hilton’s portfolio.

Created with “value” in mind, the sites will provide reliable, comfortable and affordable accommodation.

Exact dates of completion and room rates are yet to be confirmed, however the company said the new locations could open as early as late 2026 through to 2028.

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Paul Blackmore, vice-president of development for the UK and Ireland at Hilton, said: “With nearly 700 rooms in the pipeline, including the brand’s first hotel in Wales, Spark continues to gain momentum.”

Launched in 2023, Spark by Hilton operates more than 275 hotels worldwide, with more than 200 properties in development.

The budget conscious “premium economy” brand was designed to provide a reliable and value-driven stay at an accessible price point.

The 10 properties have been signed through an agreement between Hilton and UK hotel owner and operator AG Hotels Group.

An additional 53-room property in Dunfermline, Scotland is scheduled to launch in late 2026.

However this is set to operate separately from the 10 hotels included in the latest agreement.

JEDDAH: Oman’s refinery output fell 3.7 percent year on year to about 129.1 million barrels through July, with diesel production declining 6.8 percent, according to preliminary data from the National Centre for Statistics and Information. 

The latest figures showed that total motor-fuel production declined 1.4 percent through July, Oman News Agency reported, citing NCSI data. 

Diesel production fell to 43.31 million barrels from 46.48 million barrels a year earlier. Domestic sales declined 8.3 percent to 11.11 million barrels, while exports fell 11.8 percent to 33.33 million barrels. 

The decline in refinery output comes as Oman continues to develop its downstream energy and petrochemical industries as part of its economic diversification strategy. Invest Oman describes the petrochemical sector as a key pillar of Oman Vision 2040, with major projects including the Duqm Refinery and Liwa Plastics supporting the production of higher-value products from the country’s hydrocarbon resources. 

Production of regular gasoline, or 91-octane petrol, fell 4.5 percent to 9.63 million barrels through July, compared with 10.09 million barrels during the same period in 2025. Sales declined 4.6 percent to 10.04 million barrels, while exports rose 9.8 percent to 1.98 million barrels. 

“By contrast, production of premium gasoline, or 95, rose 2.6 percent through the end of July 2026 to 8.32 million barrels, compared with 8.11 million barrels during the same period in 2025,” ONA reported. 

It added that M95 sales, however, fell 10.6 percent to 8.86 million barrels, from 9.90 million barrels, while exports dropped 33.9 percent to 362,900 barrels, compared with 549,100 barrels a year earlier. 

The figures extend a trend seen earlier in the year. Through June, Oman’s total refinery output had fallen 5.1 percent to 108.85 million barrels, with diesel and regular petrol production declining while jet fuel and naphtha output increased. 

Jet fuel, naphtha rise 

Jet fuel production increased 12 percent to 16.79 million barrels through July, from 14.99 million barrels a year earlier. Sales fell 9.2 percent to 2.57 million barrels, while exports rose 27.4 percent to 14.52 million barrels. 

Naphtha production increased 4.5 percent to 22.61 million barrels, while sales rose 3.2 percent to 8.33 million barrels and exports increased 2.6 percent to 14.66 million barrels. 

LPG and other refinery products 

Liquefied petroleum gas production declined 3.3 percent through the end of July to 6.46 million barrels, compared with 6.68 million barrels during the same period in 2025. 

“Its sales also fell 22 percent to 1.76 million barrels, compared with 2.26 million barrels. By contrast, its exports increased 3.9 percent to 2.06 million barrels, compared with 1.98 million barrels,” ONA stated. 

Production of other refinery products fell 15.9 percent to 21.97 million barrels, compared with 26.12 million barrels a year earlier, with sales of those products declining 21.7 percent to 18.32 million barrels and exports falling 3.1 percent to 5.62 million barrels. 

Petrochemical production 

In the petrochemical sector, benzene production increased 7.3 percent to 109,900 tonnes through July, compared with 102,400 tonnes during the same period of 2025, while exports of the aromatic chemical rose 11.3 percent to 108,000 tonnes, according to the statistics. 

Paraxylene production increased 9.6 percent to 370,500 tonnes, compared with 338,000 tonnes a year earlier, with exports rising 1.7 percent to 372,400 tonnes. 

Polypropylene production, meanwhile, fell 25.4 percent to 149,900 tonnes from 200,800 tonnes during the same period last year. 

Despite the decline in output, sales of the key plastic material rose 32.1 percent to 23,500 tonnes, while exports fell 17.9 percent to 122,300 tonnes, compared with 148,900 tonnes. 

DELANO, Calif. — The rows of candies and nuts at the Guadalajara Meat Market — tamarindo con chile, seasoned pistachios, spicy paletas — sat mostly untouched as customers filtered through this carniceria in the late afternoon heat.

“You see a lot of people consuming the minimum, what they need to get by through the week,” said owner Carina Murillo, 31, as she checked out customers on a recent weekday. “Instead of buying six items, they’re buying three items.”

While customers bypass extras, like the snacks at the front counter, Murillo’s costs have gone up. Imported goods from Mexico and Canada have become more difficult to source and sometimes carry tariffs, she said. Transportation fees have risen as diesel prices respond to the war in Iran. The market’s insurance costs have risen by about a third. All of it has forced Murillo to increase prices.

“You see a lot of people consuming the minimum,” says Carina Murillo, owner of Guadalajara Meat Market. “Instead of buying six items, they’re buying three items.”

As the area struggles, Murillo, a college graduate who years ago felt motivated enough to door-knock for political causes, is among those who have become disillusioned. Those in Washington, she said, don’t understand the lives of the working people who keep the country running.

There have been “years where I feel completely overpowered to the point where I’m not motivated to take part,” said Murillo, who didn’t vote in 2024 but plans to do so in November. “That’s what happens when you feel discouraged or like nothing’s going to change.”

The economic strife plaguing Americans is clear in this rural, majority-Latino Central Valley congressional district, home to the state’s most competitive House race, the closely watched contest between Republican Rep. David Valadao and Democrat Randy Villegas.

Democrats hope the national economic angst will translate into big turnout in the midterm elections, but some in this region worry that years of financial struggle may depress voters’ desire to participate rather than motivate them.

Rep. David Valadao (R-Hanford) presides over a congressional hearing in March. The Republican is in a race against Democrat Randy Villegas that is considered a toss-up.

(Allison Robbert / Associated Press)

And Republicans, who rely on their party turnout beating that of Democrats in rural areas, also face the risk that frustration with the current political climate could dampen enthusiasm.

“Before they can think about Valadao, before Trump or Gavin Newsom or who’s going to run, families are concerned with the immediate: paying the rent, having the food on the table,” said Eliseo Gamiño, who heads the Central Valley Leadership Round Table, a coalition of Latino community leaders and elected officials. “You can’t be thinking about voting when your kids are hungry.”

Few voters who spoke to The Times in this swing district were decided on which party to support in November — or whether to vote at all. Such undecided voters will likely decide the election outcome, and persuading them is the key challenge for both parties as November nears.

Alexa Lopez sweeps up at closing time on a slower than usual Friday that saw one dress sold at Christina’s Fashion in Delano.

In a district that is the third-youngest in population in the country, the simmering uncertainty among Gen Z and millennial voters in particular could affect turnout or results.

Thirty-one percent of its voting-age population is 29 or younger, according to the Tufts University research center CIRCLE, which tracks youth civic engagement, making it among the top swath of House races in which young people could swing the outcome.

California’s swingiest district

The 22nd District, carved from the state’s agricultural epicenter, is one of fewer than two dozen toss-up races nationwide that will likely determine which party controls the U.S. House in the second half of President Trump’s current term. It is also among several high-stakes races nationwide that will test progressive candidates.

Valadao’s seat has long been considered a vulnerable one; Democrats added about 100,000 Fresno residents to the district under Proposition 50’s new map in a bid to help their chances. The boundaries include swaths of Kern, Kings and Tulare counties, along with a very small piece of Madera County.

“It’s going to be crucial in an area that is more purple, more bipartisan, where it’s very clear it can go either way … that these candidates make an effort to get those voters on their team,” said Brittany Martinez, a California-based Republican strategist.

Valadao, 49, who comes from a dairy farming family, is well known in the district and has repeatedly secured victory in close races, retaking the seat in 2020 after losing it in 2018’s blue wave. He saw a close race in 2022, then won by nearly seven percentage points in 2024, outperforming Trump.

His biggest vulnerability this time around may be his vote for the One Big Beautiful Bill Act, which included steep cuts to Medicaid. Local hospitals are bracing for funding cuts, though a carve-out may keep many valley residents from losing coverage. The district has the highest proportion of Medi-Cal recipients of any in the state, with 67% of residents enrolled as of 2025, according to the California Health Care Foundation.

Valadao spent part of the August recess touring the Central Valley for private meetings with local entities including a hospital, a housing program, a sawmill and a school district, and held a telephone town hall last week. Democrats have criticized him for not holding face-to-face voter events, including public town halls.

Democratic candidate Randy Villegas chats with residents during an August town hall in Hanford.

Villegas, 31, a professor and school board member who was endorsed by Sen. Bernie Sanders (I-Vt.) and is aligned with the Working Families Party, bested a Democrat backed by the party’s House campaign arm to win the nomination.

Villegas has banked on a more public-facing approach to win over swing voters — recently handing out popsicles from a pushcart he wheeled around a Labor Day event in Bakersfield, for instance — a strategy his campaign calls “going everywhere.” Republicans have criticized his record as too far left for the moderate district.

Both candidates have attempted to lean away from partisan narratives. Valadao rarely mentions Trump on social media and did not attend the president’s Republican convention in Dallas last week; Villegas has worked to frame the progressive issues he champions as an effort to help Central Valley voters rather than an ideology.

Trump carried the district as drawn now by less than 2 percentage points in 2024. Since then, residents say they have felt squeezed by housing, gas and grocery prices. The war in Iran has pinched Central Valley farmers — already struggling with water supply and other issues — by driving up fertilizer prices.

Ailyn Flores, center, picks up balloons for a party at Big Delano Discount store.

Tyler Stidham, 28, and her husband recently moved back to Lemoore from San José with their 1-year-old in order to live with family because they could no longer afford their own place.

“Rent got too high and having a family is expensive,” she said as the couple waited for their order from a food truck at the Hanford farmers market on a recent Thursday evening. They have cut out family trips and started meal-planning and budgeting to save money.

Stidham said she is planning to vote and hoping government leaders can make life more affordable. Her husband recalled a favorable impression of Valadao after once meeting him. Stidham isn’t sure who she’ll be casting her vote for.

“I haven’t done my research [yet],” she said.

Young voters said they felt frustrated waiting for a better economy that has yet to materialize.

“I feel like the government is playing in our face. I feel like everything is a show,” said Emma Woodward, 23, of Hanford.

The Sierra movie theater has closed down in Delano, Calif.

(Gary Kazanjian / For The Times)

A store manager at a coffee chain, Woodward bought a house last year to avoid throwing money at increasingly high rent payments, but it has been “hard to survive.” She got a roommate to help with costs, but the two of them sometimes find themselves using food drives for groceries. She has cut out “fun spending,” including concerts and travel.

Woodward said she wanted to vote in order to send the message to Congress that the economy needs improvement. She, too, wanted to research the candidates further; she leaned toward Villegas but was not yet convinced.

‘Whatever happens happens’

Valadao and Villegas must also battle to reach apathetic voters — those who may sit the election out or who are fed up with both parties. In one indication of voter fatigue, local organizers have found it a challenge to register new voters this year.

Dresses on display at Christina’s Fashion store after closing time on a quiet Friday night in Delano, Calif.

People who are unregistered often express mistrust in the government and the feeling that “nothing’s going to change,” said Biviana Camacho, 23, civic engagement program manager for Loud for Tomorrow, a youth organizing group based in Delano that runs voter registration events.

“A lot of folks have been in survival mode for such a long time,” she added, as the group worked on planning a fall event series on a recent afternoon. Their goal: 20 to 25 new registrations per event.

The group’s head of membership, Rosanai Paniagua, 28, agreed. “Here, there’s not a lot of hope because people haven’t seen what good policy could do for them,” she said. “A lot of apathy, for sure, because change hasn’t really happened here.”

Marco Estrada, 20, taking a break outside the Main Street barbershop where he works in Delano, said he wasn’t sure he could imagine anything Congress could do for him. He’s never voted and doesn’t plan to in November. His two co-workers said the same.

“Whatever happens happens,” Estrada said.

Valeria Valdez, a College of the Sequoias freshman, said she was planning to vote in her first election and said the government should help lower gas prices. The 18-year-old wasn’t sure, though, whether she would make a decision in the House race.

“It feels pretty far away from me, to be honest,” she said. “I just want to do what I can for our community and not focus on how corrupt the government is.”

That sentiment is part of what Villegas is aiming to target as he meets voters.

“It’s easy to feel cynical and apathetic in a moment where so many things seem stacked against us,” Villegas said in an interview. “But I tell people that … their vote and their voices do matter, otherwise we wouldn’t have billionaires and corporations spending millions of dollars trying to influence these election outcomes.”

A spokesperson for Valadao did not respond to a request for comment. Valadao said on a Washington Sun podcast in January that he “absolutely” worries about Republican voter enthusiasm, but noted it was a problem on both sides of the aisle. Earlier this month, he conveyed confidence about his race.

“I’ve won in these types of races. I can win again,” he told the Associated Press. “I think we should be fine.”

Inside Murillo’s market, business picked up as 5 o’clock neared. Murillo rang up tortillas, cuts of meat, and three-liter Mexican soda bottles. She advised a customer about treating a bug bite, helped a man wire money and cajoled a city worker about getting a sidewalk repair.

Congress should “definitely” be helping communities like hers, she said. She plans to research her voting options so she can participate in November. But trusting political candidates, she mused, can feel like a risk for voters.

“Whether they execute what they promise or not,” she said, “that’s shown with time.”

Prices spiked as attacks on oil tankers escalated in the Middle East.

Oil prices have increased by four percent, with benchmark Brent crude hitting $105 a barrel after the biggest rise in attacks on shipping since the Iran war began spurred trader concerns about further supply disruptions.

Brent crude futures were up $4.05, or four percent, at $105.26 a barrel by 1215 GMT on Thursday. United States oil topped $100 a barrel for the first time since May, as West Texas Intermediate crude futures CLc1 rose $3.99, or 4.15 percent, to $100.04.

Brent prices have surged by more than 30 percent from lows touched in early August, as a permanent agreement between the US and Iran to cease attacks never materialised and fighting resumed.

Iran-aligned Houthis seized control of Yemen’s port of Mocha on Thursday, further threatening Red Sea traffic, while Gulf traffic remains restricted through the Strait of Hormuz as tanker attacks in the region have intensified in recent days.

“The recent run-up in prices lays bare the market’s approach: this conflict will last longer than anticipated even a month ago, let alone at the beginning of the summer. If oil supply and exports are diminished, the oil balance remains tight and prices remain elevated,” PVM analyst John Evans said.

Iran said it had attacked 10 ships near the Strait of Hormuz on Wednesday, after the US hit five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.

While fears of prolonged and more severe supply disruptions in the Gulf have lifted Brent above $100, analysts say the durability of the rally will hinge on China.

Chinese demand

China, the world’s largest crude importer, has stepped up purchases in recent weeks after months of subdued demand, boosting physical crude markets, ING analysts said in a note.

If Chinese buying continues to recover, it could amplify the impact of any supply disruptions and drive prices higher, while a pullback in imports could temper market gains, ING said.

“For months, the bearish case rested on soft Chinese demand,” said David Jorbenaze, global oil market lead at commodities information provider, ICIS.

Rising oil prices have worsened worries about inflation and cranked up pressure within the bond market, helping to lower stocks again on Wall Street.

The S&P 500 fell 0.6 percent and is on track for a fourth straight loss.

The increase in oil prices has pushed the price for a gallon of regular petrol to an average of nearly $4.28 across the US, according to the American Automobile Association. That is not only costing more at the pump but also through higher prices for all kinds of products that move by truck to store shelves.

Following Thursday’s reports, traders are betting on a close to 70 percent chance the Fed will raise the federal funds rate at its meeting next week. That’s up from the 61 percent probability seen the day before, according to data from CME Group. That’s also despite President Donald Trump’s consistent lobbying for interest rates to go lower rather than higher.