Financial Markets

Shareholders approved the pay package with as much as 75 percent support on Thursday.

Tesla CEO Elon Musk has scored a resounding victory as shareholders have approved a pay package of as much as $878bn over the next decade, endorsing his vision of morphing the electric vehicle (EV) maker into an AI and robotics juggernaut.

Shares of Tesla rose more than 3 percent in after-hours trading after the shareholders voted on Thursday. The proposal was approved with more than 75 percent support.

Musk took to the stage in Austin, Texas, along with dancing robots. “What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book,” he said. “This really is going to be quite the story.”

He added: “Other shareholder meetings are like snooze fests, but ours are bangers. I mean, look at this. This is sick.”

Shareholders also re-elected three directors on Tesla’s board and voted in favour of a replacement pay plan for Musk’s services because a legal challenge has held up a previous package.

The vote, analysts have said, is a positive for Tesla’s stock, whose valuation hangs on Musk’s vision of making vehicles drive themselves, expanding robotaxis across the United States and selling humanoid robots, even though his far-right political rhetoric has hurt the Tesla brand this year.

A win for Musk was widely expected as the billionaire was allowed to exercise the full voting rights of his roughly 15 percent stake after the carmaker moved to Texas from Delaware, where a legal challenge has held up a previous pay rise.

The approval comes even after opposition from some major investors, including Norway’s sovereign wealth fund.

Tesla’s board had said Musk could quit if the pay package was not approved.

The vote will also allay investor concerns that Musk’s focus has been diluted with his work in politics as well as in running his other companies, including rocket maker SpaceX and artificial intelligence startup xAI.

The board and many investors who lent their endorsement have said the nearly $1 trillion package benefits shareholders in the longer run, as Musk must ensure Tesla achieves a series of milestones to get paid.

Goals for Musk over the next decade include the company delivering 20 million vehicles, having one million robotaxis in operation, selling one million robots and earning as much as $400bn in core profit. But in order for him to get paid, Tesla’s stock value has to rise in tandem, first to $2 trillion from the current $1.5 trillion, and all the way to $8.5 trillion.

Under the new plan, Musk could earn as much as $878bn in Tesla stock over 10 years. Musk would be given as much as $1 trillion in stock but would have to make some payments back to Tesla.

The agency made the announcement as it confronts staffing shortages caused by air traffic controllers who are working unpaid.

The United States Federal Aviation Administration (FAA) will reduce air traffic by 10 percent across 40 “high-volume” markets beginning Friday morning to maintain safety during the ongoing government shutdown, it has said.

The agency made the announcement on Wednesday as it confronts staffing shortages caused by air traffic controllers, who are working unpaid, with some calling out of work during the shutdown, resulting in delays across the country.

FAA Administrator Bryan Bedford said the agency is not going to wait for a problem to act, saying the shutdown is causing staffing pressures and “we can’t ignore it”.

Bedford and Transportation Secretary Sean Duffy said they will meet later Wednesday with airline leaders to figure out how to safely implement the reduction.

Widespread delays

The shutdown, now in its 36th day, has forced 13,000 air traffic controllers and 50,000 Transportation Security Administration officers to work without pay. This has worsened staff shortages, caused widespread flight delays and extended lines at airport security screening.

The move is aimed at taking pressure off air traffic controllers. The FAA also warned that it could add more flight restrictions after Friday if further air traffic issues emerge.

Duffy had warned on Tuesday that if the federal government shutdown continued another week, it could lead to “mass chaos” and force him to close some of the national airspace to air traffic, a drastic move that could upend American aviation.

Airlines have repeatedly urged an end to the shutdown, citing aviation safety risks.

Shares of major airlines, including United Airlines and American Airlines, were down about 1 percent in extended trading.

An airline industry group estimated that more than 3.2 million passengers have been affected by flight delays or cancellations due to rising air traffic controller absences since the shutdown began on October 1. Airlines have been raising concerns with lawmakers about the impact on operations.

Airlines said the shutdown has not significantly affected their business, but have warned bookings could drop if it drags on. More than 2,100 flights were delayed on Wednesday.

On Tuesday, FAA’s Bedford said that 20 percent to 40 percent of controllers at the agency’s 30 largest airports were failing to show up for work.

The federal government has mostly closed as Republicans and Democrats are locked in a standoff in Congress over a funding bill. Democrats have insisted they would not approve a plan that does not extend health insurance subsidies, while Republicans have rejected that.

The United States Federal Reserve has cut its benchmark interest rate by 25 basis points to 3.75 – 4.00 percent, amid signs of a slowing labour market and continued pressure on consumer prices.

The cut, announced on Wednesday, marks the US central bank’s second rate cut this year.

“Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated,” the Fed said in a statement.

“Uncertainty about the economic outlook remains elevated.”

The cuts were largely in line with expectations. Earlier on Wednesday, CME Fed Watch — which tracks the likelihood of rate cuts — said there was a 97.8 percent probability of rate cuts.

After the September cut, economists had largely been expecting two additional rate cuts for the rest of this year. Goldman Sachs, Citigroup, HSBC, and Morgan Stanley, among others, forecast one more 25-basis-point reduction by year’s end following Wednesday’s cut. Bank of America Global Research is the only major firm that is not anticipating another 25-basis-point cut in 2025.

“The Fed has a challenging line to walk; lower interest rates to support labour markets and growth, or raise them to tamp down inflation. For now, they are taking a cautious approach tilted a bit towards the growth concerns,” Michael Klein, professor of international economic affairs at The Fletcher School at Tufts University in Massachusetts, told Al Jazeera.

Despite forecasts, Federal reserve chairman Jerome Powell isn’t necessarily inevitable.

“We haven’t made a decision about December,” Powell told reporters in a press conference.

“We remain well-positioned to respond in a timely way to potential economic developments.”

Government shutdown implications

The cuts come as economic data becomes increasingly scarce amid the ongoing government shutdown, now in its 29th day as of Wednesday, making it the second-longest in US history, behind the 35-day shutdown during the first presidency of Donald Trump in late 2018 and early 2019.

Because of the shutdown, the Department of Labor did not release the September jobs report, which was scheduled for October 3. The only major government economic data released this month was the Consumer Price Index (CPI), which tracks the cost of goods and services and is a key measure of inflation. The CPI rose 0.3 percent in September on a month-over-month basis to an inflation rate of 3 percent.

That data was released because the Social Security Administration required it to calculate cost-of-living adjustments for 2026. As a result, Social Security beneficiaries will receive a 2.8 percent increase in payments compared to 2025.

The shutdown, however, could have a bigger impact on next month’s central bank decision as the Labor Department is currently unable to compile the data needed for its November reports.

However, amid the limited government data, private trackers are showing a slowdown.

“We are not going to be able to have the detailed feel of things, but I think if there were a significant or material change in the economy one way or another, I think we would pick that up,” Powell said.

Consumer confidence lags

Consumer confidence fell to a six-month low, according to The Conference Board’s report that was released on Tuesday.

The data showed that lower-income earners – those making less than $75,000 a year – are less confident about the economy as fears of job scarcity loom. This comes only days after several large corporations announced waves of layoffs.

On Wednesday, Paramount cut 2,000 people from its workforce. On Tuesday, Amazon cut 14,000 corporate jobs. Last week, big box retailer Target cut 1,800 jobs. This, as furloughs and layoffs weigh on government workers. The US government is the nation’s largest employer.

Those making more than $200,000 annually remain fairly confident and are leading consumer spending that is keeping the economy afloat, according to The Conference Board.

Pressures both on consumer spending and the labour market are largely driven by tariffs weighing on consumers and businesses.

US markets are ticking up on the rate cut. The Nasdaq is up 0.5, the S&P 500 is up 0.1, and the Dow Jones Industrial Average is up by 0.26 as of 2pm in New York (18:00 GMT).

The deal removes a major constraint on raising capital for OpenAI, the maker of ChatGPT, and values the firm at $500bn.

Microsoft and OpenAI have reached a deal to allow the ChatGPT maker to restructure itself into a public-benefit corporation, valuing OpenAI at $500bn and giving it more freedom in its business operations.

The deal, unveiled on Tuesday, removes a major constraint on raising capital for OpenAI that has existed since 2019.

At the time, it had signed an agreement with Microsoft that gave the tech giant rights over much of OpenAI’s work in exchange for costly cloud computing services needed to carry it out. As its ChatGPT service exploded in popularity, those limitations had become a notable source of tension between the two companies.

Microsoft will still hold a stake of about $135bn, or 27 percent, in OpenAI Group PBC, which will be controlled by the OpenAI Foundation, a nonprofit, the companies said.

Microsoft, based in Redmond, Washington in the United States, has invested $13.8bn in OpenAI, with Tuesday’s deal implying that the firm had generated a return of nearly 10 times its investment.

Shares of Microsoft rose 2.5 percent, sending its market value above $4 trillion again.

The deal keeps the two firms intertwined until at least 2032, with a massive cloud computing contract and with Microsoft retaining some rights to OpenAI products and artificial intelligence (AI) models until then – even if OpenAI reaches artificial general intelligence (AGI), the point at which AI systems can match a well-educated human adult.

Simplified corporate structure

With more than 700 million weekly users as of September, ChatGPT has exploded in popularity to become the face of AI for many consumers after OpenAI’s founding as a nonprofit AI safety group.

As the company grew, the Microsoft deal constrained OpenAI’s ability to raise funds from outside investors and secure computing contracts as the crush of ChatGPT users and its research into new models caused its computing needs to skyrocket.

“OpenAI has completed its recapitalization, simplifying its corporate structure,” Bret Taylor, the OpenAI Foundation’s board chair, said in a blog post. “The nonprofit remains in control of the for-profit, and now has a direct path to major resources before AGI arrives.”

Microsoft’s previous 2019 agreement had many provisions that rested on when OpenAI reached that point, and the new deal requires an independent panel to verify OpenAI’s claims it has reached AGI.

“OpenAI still faces ongoing scrutiny around transparency, data usage, and safety oversight. But overall, this structure should provide a clearer path forward for innovation and accountability,” said Adam Sarhan, CEO of 50 Park Investments.

Gil Luria, head of technology research at DA Davidson, said the deal “resolves the longstanding issue of OpenAI being organized as a not-for-profit [organisation] and settles the ownership rights of the technology vis-a-vis Microsoft. The new structure should provide more clarity on OpenAI’s investment path, thus facilitating further fundraising.”

Microsoft also said that it has secured a deal with OpenAI where the ChatGPT maker will purchase $250bn of Microsoft Azure cloud computing services. In exchange, Microsoft will no longer have a right of first refusal to provide computing services to OpenAI.

Microsoft also said that it will not have any rights to hardware produced by OpenAI. In March, OpenAI bought longtime Apple design chief Jony Ive’s startup io Products in a $6.5bn deal.

Washington has announced new sanctions against Russia’s two largest oil companies, Rosneft and Lukoil, in an effort to pressure Moscow to agree to a peace deal in Ukraine. This marks the first time the current Trump administration has imposed direct sanctions on Russia.

Speaking alongside Nato Secretary-General Mark Rutte in the Oval Office on Wednesday, US President Donald Trump said he hoped the sanctions would not need to be in place for long, but expressed growing frustration with stalled truce negotiations.

“Every time I speak to Vladimir [Putin], I have good conversations and then they don’t go anywhere. They just don’t go anywhere,” Trump said, shortly after a planned in-person meeting with his Russian counterpart, Vladimir Putin, in Budapest was cancelled.

Trump’s move is designed to cut off vital oil revenues, which help fund Russia’s ongoing war efforts. Earlier on Wednesday, Russia unleashed a new bombardment on Ukraine’s capital, Kyiv, killing at least seven people, including children.

US Treasury Secretary Scott Bessent said the new sanctions were necessary because of “Putin’s refusal to end this senseless war”. He said that Rosneft and Lukoil fund the Kremlin’s “war machine”.

How have Rosneft and Lukoil been sanctioned?

The new measures will freeze assets owned by Rosneft and Lukoil in the US, and bar US entities from engaging in business with them. Thirty subsidiaries owned by Rosneft and Lukoil have also been sanctioned.

Rosneft, which is controlled by the Kremlin, is Russia’s second-largest company in terms of revenue, behind natural gas giant Gazprom. Lukoil is Russia’s third-largest company and its biggest non-state enterprise.

Between them, the two groups export 3.1 million barrels of oil per day, or 70 percent of Russia’s overseas crude oil sales. Rosneft alone is responsible for nearly half of Russia’s oil production, which in all makes up 6 percent of global output.

In recent years, both companies have been hit by rolling European sanctions and reduced oil prices. In September, Rosneft reported a 68 percent year-on-year drop in net income for the first half of 2025. Lukoil posted an almost 27 percent fall in profits for 2024.

Meanwhile, last week, the United Kingdom unveiled sanctions on the two oil majors. Elsewhere, the European Union looks set to announce its 19th package of penalties on Moscow later today, including a ban on imports of Russian liquefied natural gas.

How much impact will these sanctions have?

In 2022, Russian oil groups (including Rosneft and Lukoil) were able to offset some of the effects of sanctions by pivoting exports from Europe to Asia, and also using a “shadow fleet” of hard-to-detect tankers with no ties to Western financial or insurance groups.

China and India quickly replaced the EU as Russia’s biggest oil consumers. Last year, China imported a record 109 million tonnes of Russian crude, representing almost 20 percent of its total energy imports. India imported 88 million tonnes of Russian oil in 2024.

In both cases, these are orders of magnitude higher than before 2022, when Western countries started to tighten their sanctions regime on Russia. At the end of 2021, China imported roughly 79.6 million tonnes of Russian crude. India imported just 0.42 million tonnes.

Trump has repeatedly urged Beijing and New Delhi to halt Russian energy purchases. In August, he levied an additional 25 percent trade tariff on India because of its continued purchase of discounted Russian oil. He has so far demurred from a similar move against China.

However, Trump’s new sanctions are likely to place pressure on foreign financial groups which do business with Rosneft and Lukoil, including the banking intermediaries which facilitate sales of Russian oil in China and India.

“Engaging in certain transactions involving the persons designated today may risk the imposition of secondary sanctions on participating foreign financial institutions,” the US Treasury Department’s press release on Wednesday’s sanctions says.

As a result, the new restrictions may force buyers to shift to alternative suppliers or pay higher prices. Though India and China may not be the direct targets of these latest restrictions, their oil supply chains and trading costs are likely to come under increased pressure.

“The big thing here is the secondary sanctions,” Felipe Pohlmann Gonzaga, a Switzerland-based commodity trader, told Al Jazeera. “Any bank that facilitates Russian oil sales and with exposure to the US financial system could be subject.”

However, he added, “I don’t think this will be the driver in ending the war, as Russia will continue selling oil. There are always people out there willing to take the risk to beat sanctions.

“These latest restrictions will make Chinese and Indian players more reluctant to buy Russian oil – many won’t want to lose access to the American financial system. [But] it won’t stop it completely.”

According to Bloomberg, several senior refinery executives in India – who asked not to be named due to the sensitivity of the issue – said the restrictions would make it impossible for oil purchases to continue.

On Wednesday, Trump said that he would raise concerns about China’s continued purchases of Russian oil during his talk with President Xi Jinping at the 2025 Asia-Pacific Economic Cooperation summit in South Korea next week.

Have oil prices been affected?

Oil prices rallied after Trump announced US sanctions. Brent – the international crude oil benchmark – rose nearly 4 percent to $65 a barrel on Thursday. The US Benchmark, West Texas Intermediate, jumped more than 5 percent to nearly $60 per barrel.

Pohlmann Gonzaga, however, predicted that the “market will correct from this 5 percent over-jump. You have to recall that sentiment in energy markets is still negative due to the gloomy [global] economic backdrop.”

The central bank said deal was part of a comprehensive strategy to help it respond to forex and capital markets volatility.

The Central Bank of the Argentinian Republic (BCRA) said it has signed a $20bn exchange rate stabilisation agreement with the United States Treasury Department, six days ahead of a key midterm election.

The central bank’s statement on Monday said the agreement sets forth terms for bilateral currency swap operations between the US and Argentina, but it provided no technical details.

The central bank said: “Such operations will allow the BCRA to expand its set of monetary and exchange rate policy instruments, including the liquidity of its international reserves”.

The Argentinian peso closed at a record low, down 1.7 percent on the day to end at 1,475 per dollar.

The BCRA said the pact was part of a comprehensive strategy to enhance its ability to respond to foreign exchange and capital markets volatility.

The US Treasury did not immediately respond to a request for details on the new swap line and has not issued its own statement about the arrangement.

US Secretary of the Treasury Scott Bessent said last week that the arrangement would be backed by International Monetary Fund Special Drawing Rights held in the Treasury’s Exchange Stabilization Fund that will be converted to dollars.

Bessent has said that the US would not put additional conditions on Argentina beyond President Javier Milei’s government continuing to pursue its fiscal austerity and economic reform programmes to foster more private-sector growth.

He has announced several US purchases of pesos in recent weeks, but has declined to disclose details.

Midterm vote

Argentinian Minister of Economy Luis Caputo said last week that he hoped the swap deal framework would be finalised before the October 26 midterm parliamentary vote, in which Milei’s party will seek to grow its minority presence in the legislature.

Milei, who has sought to solve Argentina’s economic woes through fiscal spending cuts and dramatically shrinking the size of government, has been handed a string of recent political defeats.

US President Donald Trump said last week that the US would not “waste our time” with Argentina if Milei’s party loses in the midterm vote. The comment briefly shocked local markets until Bessent clarified that continued US support depended on “good policies”, not necessarily the vote result.

He added that a positive result for Milei’s party would help block any policy repeal efforts.

The French bank will pay more than $20m to three plaintiffs amid allegations of human rights abuses.

BNP Paribas shares have tumbled as much as 10 percent after a United States jury found the French bank helped Sudan’s government commit genocide by providing banking services that violated American sanctions, raising questions about whether the lender will be exposed to further legal claims.

The bank’s shares were down on Monday morning in New York.

The federal jury in Manhattan on Friday ordered BNP Paribas to pay a combined $20.5m to three Sudanese plaintiffs who testified about human rights abuses perpetrated under former President Omar al-Bashir’s rule.

The Paris, France-based bank said it will appeal the verdict.

“This result is clearly wrong and ignores important evidence the bank was not permitted to introduce,” the company said in a statement on Monday.

Uncertainty about whether BNP Paribas could face further claims or penalties weighed on the bank’s shares on Monday, and would likely continue to do so, traders and analysts said.

The shares dropped as much as 10 percent at one point, and were last down 8.7 percent – set for their biggest daily fall since March 2023.

Lawyers for the three plaintiffs, who now reside in the US, said the verdict opens the door for more than 20,000 Sudanese refugees in the US to seek billions of dollars in damages from the French bank.

BNP said, “this verdict is specific to these three plaintiffs and should not have broader application. Any attempt to extrapolate is necessarily wrong as is any speculation regarding a potential settlement.”

Nonetheless, analysts say the news will likely drag on the bank’s shares in the coming months.

“A combination of a lack of visibility on the potential financial impact and next legal steps, a reminder of 2014 share price performance as well as a capital path that leaves relatively little room for error, is likely to hang over the shares until more visibility is provided,” analysts at RBC Capital Markets said in a note.

BNP Paribas in 2014 agreed to plead guilty and pay an $8.97bn penalty to settle US charges that it transferred billions of dollars for Sudanese, Iranian and Cuban entities subject to economic sanctions.

RBC said the bank’s shares underperformed the sector by 10 percent from the first litigation provision booked in early 2014 to the settlement in June 2014.

Stellantis announced a $13bn investment in the US, which will see production of the Jeep Compass move to the US from Canada.

Canada has threatened legal action against carmaker Stellantis NV over what Ottawa says is the company’s unacceptable plan to shift production of one model to a United States plant.

On Wednesday, Minister of Industry Melanie Joly sent a letter to Stellantis CEO Antonio Filosa noting that the company had agreed to maintain its Canadian presence in exchange for substantial financial support.

“Anything short of fulfilling that commitment will be considered a default under our agreement,” she said. If Stellantis did not live up to its commitment, Canada would “exercise all options, including legal”, she said.

Stellantis announced a $13bn investment in the US on Tuesday, a move that it said would bring five new models to the market. As part of the plan, production of the Jeep Compass will move to the US state of Illinois from a facility in Brampton in the Canadian province of Ontario.

A copy of the letter was made available to the Reuters news agency. The existence of the letter was first reported by Bloomberg.

Stellantis had paused retooling of the Brampton plant in February, shortly after US President Donald Trump announced tariffs against Canadian goods, upending the highly integrated North American auto industry.

In a statement on Tuesday night, Canada’s Prime Minister Mark Carney said Ottawa had made clear it expected Stellantis to fulfil the undertakings it had made to the workers at the plant.

“We are working with the company to develop the right measures to protect Stellantis employees,” he said.

Ontario is Canada’s industrial heartland and accounts for about 40 percent of its national gross domestic product (GDP).

“I have spoken with Stellantis to stress my disappointment with their decision,” Ontario Premier Doug Ford said on social media on Wednesday.

Stellantis spokesperson LouAnn Gosselin said the company was investing in Canada and noted plans to add a third shift to a plant in Windsor, Ontario.

“Canada is very important to us. We have plans for Brampton and will share them upon further discussions with the Canadian government,” she said in an emailed statement.

The United States and China have started charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil, making the high seas a key front in the trade war between the world’s two largest economies.

A return to an all-out trade war appeared imminent last week, after China announced a major expansion of its rare earths export controls, and US President Donald Trump threatened to raise tariffs on Chinese goods to triple digits.

But after the weekend, both sides sought to reassure traders and investors, highlighting cooperation between their negotiating teams and the possibility they could find a way forward.

China said it had started to collect the special charges on US-owned, operated, built or flagged vessels, but it clarified that Chinese-built ships would be exempted from the levies.

In details published by state broadcaster CCTV, China spelled out specific provisions on exemptions, which also include empty ships entering Chinese shipyards for repair.

Similar to the US plan, the new China-imposed fees would be collected at the first port of entry on a single voyage or for the first five voyages within a year.

“This tit-for-tat symmetry locks both economies into a spiral of maritime taxation that risks distorting global freight flows,” Athens-based Xclusiv Shipbrokers said in a research note.

Early this year, the Trump administration announced plans to levy the fees on China-linked ships to loosen the country’s grip on the global maritime industry and bolster US shipbuilding.

An investigation during the administration of former US President Joe Biden concluded that China uses unfair policies and practices to dominate the global maritime, logistics and shipbuilding sectors, clearing the way for those penalties.

China hit back last week, saying it would impose its own port fees on US-linked vessels from the same day the US fees took effect.

“We are in the hectic stage of the disruption, where everyone is quietly trying to improvise workarounds, with varying degrees of success,” said independent dry bulk shipping analyst Ed Finley-Richardson. He said he has heard reports of US shipowners with non-Chinese vessels trying to sell their cargoes to other countries while en route, so the vessels can divert.

The Reuters news agency was not immediately able to confirm this.

Tit-for-tat moves

Analysts expect China-owned container carrier COSCO to be the most affected by the US fees, shouldering nearly half of that segment’s expected $3.2bn cost from the fees in 2026.

Major container lines, including Maersk, Hapag-Lloyd and CMA CGM, slashed their exposure by switching China-linked ships out of their US shipping lanes. Trade officials there reduced fees from initially proposed levels, and exempted a broad swath of vessels after heavy pushback from the agriculture, energy and US shipping industries.

The Office of the US Trade Representative (USTR) did not immediately respond to a request for comment from Reuters.

China’s Ministry of Commerce on Tuesday said, “If the US chooses confrontation, China will see it through to the end; if it chooses dialogue, China’s door remains open.”

In a related move, Beijing also imposed sanctions on Tuesday against five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean, which it said had “assisted and supported” a US probe into Chinese trade practices.

Hanwha, one of the world’s largest shipbuilders, owns Philly Shipyard in the US and has won contracts to repair and overhaul US Navy ships. Its entities will also build a US-flagged LNG carrier.

Hanwha said it is aware of the announcement and is closely monitoring the potential business impact. Hanwha Ocean’s shares sank by nearly 6 percent.

China also launched an investigation into how the US probe affected its shipping and shipbuilding industries.

A Shanghai-based trade consultant said the new fees may not cause significant upheaval.

“What are we going to do? Stop shipping? Trade is already pretty disrupted with the US, but companies are finding a way,” the consultant told Reuters, requesting anonymity because he was not authorised to speak with the media.

The US announced last Friday a carve-out for long-term charterers of China-operated vessels carrying US ethane and liquefied petroleum gas (LPG), deferring the port fees for them through December 10.

Meanwhile, ship-tracking company Vortexa identified 45 LPG-carrying VLGCs — an acronym for very large gas carriers, a type of vessel — that would be subject to China’s port fee. That amounts to 11 percent of the total fleet.

Clarksons Research said in a report that China’s new port fees could affect oil tankers accounting for 15 percent of global capacity.

Meanwhile, Omar Nokta, an analyst at the financial firm Jefferies, estimated that 13 percent of crude tankers and 11 percent of container ships in the global fleet would be affected.

Trade war embroils environmental policy

In a reprisal against China curbing exports of critical minerals, Trump on Friday threatened to slap additional 100 percent tariffs on goods from China and put new export controls on “any and all critical software” by November 1.

Administration officials, hours later, warned that countries voting this week in favour of a plan by the United Nations International Maritime Organization (IMO) to reduce planet-warming greenhouse gas emissions from ocean shipping could face sanctions, port bans, or punitive vessel charges.

China has publicly supported the IMO plan.

“The weaponisation of both trade and environmental policy signals that shipping has moved from being a neutral conduit of global commerce to a direct instrument of statecraft,” Athens-based Xclusiv said.

The deal also gives the ChatGPT creator the option to buy upto 10 percent of AMD.

United States chipmaker AMD will supply artificial intelligence chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10 percent of the company.

Shares of the chipmaker surged more than 34 percent on Monday when the deal was announced, putting them on track for their biggest one-day gain in more than nine years and adding roughly $80bn to the company’s market value.

The deal, latest in a string of investment commitments, underscores OpenAI and the broader AI industry’s voracious appetite for computing power as companies race towards developing AI technology that meets or exceeds human intelligence.

“We view this deal as certainly transformative, not just for AMD, but for the dynamics of the industry,” AMD executive vice president Forrest Norrod told the Reuters news agency.

Deal helps ‘validate technology’

The agreement closely ties the startup at the centre of the AI boom to AMD, one of the strongest rivals of Nvidia, which recently agreed to make substantial investments in OpenAI.

Analysts said it was a significant vote of confidence in AMD’s AI chips and software but is unlikely to dent Nvidia’s dominance, as the market leader continues to sell every AI chip it can make.

AMD executives expect the deal to net tens of billions of dollars in annual revenue. Because of the ripple affect of the agreement, AMD expects to receive more than $100bn in new revenue over four years from OpenAI and other customers, they said.

The chipmaker is expected to report revenue of $32.78bn this year, according to LSEG data. In contrast, analysts are expecting Nvidia to report revenue of $206.26bn for the current fiscal year.

“AMD has really trailed Nvidia for quite some time. So I think it helps validate their technology,” said Leah Bennett, chief investment strategist at Concurrent Asset Management.

Shares of Nvidia dipped more than 1 percent.

OpenAI CEO Sam Altman said the AMD deal will help his startup build enough AI infrastructure to meet its needs.

It was not immediately clear how OpenAI would fund the enormous deal.

OpenAI, which is valued at $500bn, generated approximately $4.3bn in revenue in the first half of 2025 and burned through $2.5bn in cash, according to media reports.

In September, Nvidia announced a deal to supply OpenAI with at least 10 gigawatts worth of its systems.

In contrast with the startup’s deal with AMD where it will take a stake in the chipmaker, Nvidia will invest $100bn in the ChatGPT parent under the terms of the agreement announced in September.

Taking a stake in AMD could give OpenAI “the power to potentially influence corporate strategy. With Nvidia, OpenAI is simply the client and not a part-owner,” said Dan Coatsworth, head of markets at A J Bell.

OpenAI has worked with AMD for years, providing inputs on the design of older generations of AI chips.

The startup and its main backer, Microsoft, announced last month that they had signed a non-binding agreement to restructure OpenAI in to a for-profit entity.

A person familiar with the matter said the deal with AMD does not change any of OpenAI’s ongoing compute plans, including that effort or its partnership with Microsoft.

Trump had imposed a 40 percent US tariff on Brazilian goods in July on top of a 10 percent one earlier even though the United States has a trade surplus with Brazil.

Brazilian President Luiz Inacio Lula da Silva has asked United States President Donald Trump to lift the 40 percent tariff imposed by the US government on Brazilian imports.

The leaders spoke for 30 minutes by phone on Monday. During the call, they exchanged phone numbers in order to maintain a direct line of contact, and President Lula reiterated his invitation for Trump to attend the upcoming climate summit in Belem, according to a statement from Lula’s office.

Shortly after, Trump posted on his Truth Social platform that he had had a good conversation with Lula.

“We discussed many things, but it was mostly focused on the Economy, and Trade, between our two Countries,” Trump said.

He added that the leaders “will be having further discussions, and will get together in the not too distant future, both in Brazil and the United States”.

The Trump administration had imposed a 40 percent tariff on Brazilian products in July on top of a 10 percent tariff imposed earlier. Lula reminded Trump that Brazil was one of three Group of 20 (G20) countries with which the US maintains a trade surplus, according to the Brazilian leader’s office.

The Trump administration has justified the tariffs by saying that Brazil’s policies and criminal prosecution of former President Jair Bolsonaro constitute an economic emergency.

Earlier this month, Bolsonaro was convicted of attempting a coup after losing his bid for re-election in 2022, and a panel of the Supreme Court sentenced him to 27 years and three months in prison.

In September, Trump and Lula had a brief encounter at the sidelines of the UN General Assembly in New York, with Trump hailing their “excellent chemistry”.

During Monday’s call, Lula also offered to travel to Washington to meet with Trump, his office said.

The United States government is set to shut down unless Congress passes an appropriations bill to fund its operations.

Without this legislation, federal agencies will be forced to suspend nonessential activities starting on Wednesday at 12:01am in Washington, DC (04:01 GMT).

Although Republicans control the House of Representatives, Senate and White House, they cannot pass the bill on their own. While Republicans have 53 of the 100 seats in the Senate, 60 votes are needed to advance the bill to a vote.

Republicans have proposed a short-term spending plan, but Democrats have been trying to use the approaching shutdown as leverage. They are pushing to reverse Medicaid cuts included in tax legislation passed in July and extend tax credits for healthcare purchased through government exchanges.

With neither side willing to compromise, a shutdown could have ripple effects across the US economy.

Layoffs and impact on consumer sentiment

The federal government is the nation’s largest employer. In a memo last week, federal agencies were told to prepare layoff notices for programmes that would run out of funds by the deadline and for those not considered a priority by the administration. The memo itself did not explicitly make it clear what those priorities are.

The White House did not respond to Al Jazeera’s request for clarification.

The cuts would be through what is called Reduction In Force, or RIF. But it is unclear whether the cuts, even if the president were to push them through, would last because Trump doesn’t have the power to carry them out, said Daniel Hornung, policy fellow at the Stanford Institute of Economic Policy Research.

“There’s no legal authority that you [the White House] get from shutting down to do RIFs,” Hornung  told Al Jazeera.

RIFs require 30- to 60-days notice if an agency looks to make cuts, so Hornung expected that any cuts made now would be challenged in court.

But even if the job cuts are blocked, it is not clear when that would happen. As a result, those out of work may put off purchases, especially for big-ticket items, according to Michael Klein, professor of international economic affairs at Tufts University in Massachusetts.

“Consumers will start spending less because they’re concerned about what the future looks like,” Klein told Al Jazeera.

“It might be decided [by the court] that it’s not lawful, but that could be a long time. Even if it all gets resolved, those out of a job probably aren’t going to be spending like they otherwise would.”

The memo did not provide a specific number of jobs that could be cut. It comes as more than 150,000 workers are also expected to leave the federal workforce after accepting buyouts this year. Those reductions – as part of the deferred exit programme, which kept workers on payrolls until the end of September – are the largest federal worker job cuts in almost 80 years.

In addition to the permanent layoffs, government workers face furloughs as long as the government is shut down. Workers considered not essential to government operations would stop working until Congress passes budget bills or a stopgap measure.

Delayed jobs report

On Tuesday, the Jobs Openings and Labor Turnover Survey, or JOLTS, released by the Department of Labor showed that hiring declined by 114,000 jobs to 5.1 million in August while job openings increased slightly by 19,000 to 7.2 million. If the government shuts down, the Labor Department would delay the release of key economic reports that gauge the health of the US economy.

On Thursday, it is scheduled to publish weekly jobless claims and on Friday the monthly jobs report, detailing how many jobs were created, in which sectors and the unemployment rate. Normally, the department releases that report on the first Friday of each month unless a holiday intervenes.

The broader labour market has already shown signs of cooling in recent months. In August, the US economy, the largest in the world, added only 22,000 jobs.

Softening labour conditions were one reason the Federal Reserve cut interest rates by 25 basis points in September. A delay in new data could leave the central bank with less information to consider as it weighs whether to cut rates again. Still, a short delay is unlikely to have a major effect because the Fed’s next two-day policy meeting is not until October 28-29.

Hornung believes this shutdown is coming during a fairly unique economic situation that the central bank will need to watch.

“The main risk is that we’re in a precarious spot in the economy anyway. Unlike the prior shutdowns like the prolonged 2018 shutdown, the economy was performing well, the prolonged 2013 shutdown, the economy, was in the midst of a slow but long, gradual recovery,” Hornung said.

“Now the labour market has really weakened. It appears in recent months the risk of inflation remains because of the tariffs. And so, it’s kind of this question of how much can the economy withstand.”

Market impact

Historically, shutdowns have had limited impact on financial markets because investors typically recognise that a shutdown is short-lived.

“Typically in shutdown scenarios, there’s not much impact on either equity markets or in bond markets, mostly because investors tend to look through shutdowns and assess that any temporary slowdown associated with the shutdown will be reversed when the government opens back up,”  Hornung added.

This time, the dynamics are different as the government is planning to slash jobs vs just putting employees on furlough, and this is set against Trump’s broader economic agenda focused on tariffs, which have already pressured businesses.

Markets were relatively flat before the looming shutdown. As of 3:30pm in New York (19:30 GMT), the Dow Jones Industrial Average was up 0.08 percent, the Nasdaq was up 0.06 percent and the S&P 500 was up 0.2 percent.

New York, USA – Next week, the United States Federal Reserve will hold a two-day policy meeting to decide whether to lower interest rates.

The meeting follows a months-long pause in rates and comes amid heightened pressure on the central bank.

US President Donald Trump recently dismissed Federal Reserve Governor Lisa Cook on allegations of mortgage fraud, which she is contesting in court, and has escalated his loud and repeated criticism of Fed Chair Jerome Powell.

The Fed, which emphasises its independence from political influence, will weigh new economic data as it considers its next move. The benchmark interest rate has remained at 4.25 percent – 4.50 percent since December.

So far, the Fed has held rates steady, saying the stance preserves flexibility to respond to economic shocks tied to shifting trade policy. But many economists now believe a rate cut is imminent.

They point to signs of a cooling labour market and tariff-related pressure on inflation as factors that could support lowering rates, not political pressure.

“I think that the Fed has made it pretty clear that they’re going to cut rates in September, and the market certainly expects that,” Daniel Hornung, policy fellow at Stanford Institute of Economic Policy Research and former deputy director of the National Economic Council, told Al Jazeera.

CME FedWatch, which tracks the probability of Fed policy moves, puts the likelihood of a quarter of one percentage point cut at 94.5 percent, echoing research from JPMorgan last month.

“For Fed Chair Jerome Powell, the risk management considerations may go beyond balancing employment and inflation risks, and we now see the path of least resistance is to pull forward the next cut of 25 basis points to the September meeting,” Michael Feroli, chief US economist at JP Morgan, said at the time.

Prices jump

Consumer prices rose 0.4 percent in August from the previous month, the sharpest increase in seven months, according to the Labor Department’s consumer price index (CPI) report released on Thursday.

The gain followed a 0.2 percent rise in July. Economists surveyed by Reuters had forecast a 0.3 percent monthly increase in core CPI.

Energy costs climbed 0.7 percent, fueled by a 1.9 percent jump in gasoline. Airfares climbed 5.9 percent, apparel prices rose 0.5 percent, shelter increased 0.4 percent, grocery prices were up 0.6 percent, and restaurant meals rose 0.3 percent.

Some goods saw particularly steep increases. Coffee prices jumped 3.6 percent on the month as Brazil, the world’s top coffee exporter, redirected shipments away from the US following new tariffs.

The Producer Price Index (PPI), which tracks prices businesses receive for goods and services, showed coffee up nearly 7 percent from July and more than 33 percent over the past year.

There is a comparable phenomenon with beef, for which the US relies heavily on Brazil.  CPI data showed a 2.7 percent increase, while the PPI measured a 6 percent monthly rise and a 21 percent yearly increase.

Overall, the PPI slipped 0.1 percent, suggesting some businesses are absorbing tariff costs rather than passing them to consumers. Service prices fell 1.7 percent, driven by a 3.9 percent decline in margins for machinery and vehicle wholesalers, which offset a 0.1 percent increase in goods prices. That came after wholesale inflation was revised higher to 0.7 percent in July, which was well above economists’ forecasts.

Even so, companies are beginning to warn that they cannot continue absorbing higher costs. In recent weeks, Campbell’s Co, which makes Campbell’s Soup and Goldfish crackers, and Procter & Gamble have both said they plan to raise prices on consumer goods in the months ahead as tariff pressures persist.

Labour market tumbles

The US labour market, a key factor in the Federal Reserve’s interest rate decisions, has cooled sharply.

Approximately 263,000 people submitted initial jobless claims last week, the most in four years, Department of Labor data released on Thursday showed.

On Tuesday, the Bureau of Labor Statistics also revised down job gains over the past few months, as well as between April 2024 and March 2025, when the US economy added 911,000 fewer jobs than had been previously reported.

All of that is echoed by poor jobs numbers last week. In August, the economy added only 22,000 jobs, with gains concentrated in healthcare (which added 31,000 jobs) and social assistance (which added 16,000). The unemployment rate climbed to 4.3 percent, the Labor Department reported.

Revisions showed July job growth slightly stronger at 79,000, up from 73,000, while June was cut from a modest gain to a loss of 13,000.

“The recent job numbers were really, especially the revision of the earlier numbers, were really kind of problematic for the economy,” Michael Klein, professor of International Economic Affairs at the Fletcher School at Tufts University, told Al Jazeera.

Job openings and turnover also declined, leaving more unemployed workers than available positions for the first time since April 2021.

A report from Challenger, Gray & Christmas highlighted the strain, noting a 39 percent jump in job cuts between July and August. Private payroll growth slowed as well, according to the ADP National Employment Report, which showed just 54,000 jobs added, down from 106,000 the prior month.

Competing forces

Typically, high inflation prompts higher interest rates, which discourage borrowing and spending and help rein in prices.

“The Fed is in a very difficult position right now because there is both a weakening labour market and evidence of higher inflation. Typically, if the Fed is facing a weaker labour market, it would want to lower interest rates. And if it’s facing higher inflation, it would want to raise interest rates. But we’re in a situation now where there are countervailing forces,” Klein said.

The labour market is already weighing on consumer spending. Rising layoffs and slower hiring have made shoppers cautious, and the latest consumer confidence index shows plans to buy big-ticket and discretionary items are slipping.

With Trump’s shifting tariffs and hardline immigration policies, businesses are stuck in a “wait-and-see” mode, increasing uncertainty.

“We are seeing immigration and tariff policies that have the simultaneous effect of raising prices and slowing growth in the labour market,” Hornung said.

The switch in the ranking came after a blockbuster earnings report from Oracle, powered by multibillion-dollar orders, sent Oracle stock shooting up.

Oracle cofounder Larry Ellison has wrested the title of the world’s richest person from longtime holder Elon Musk.

On Wednesday, as stock in Ellison’s software giant rocketed more than a third in a stunning few minutes of trading, Ellison’s net worth surpassed the Tesla CEO, according to wealth tracker Bloomberg. As of 3pm in New York (19:00 GMT), Oracle stock is up 34.4 percent for the day.

Ellison, 81, is now worth $393bn, according to Bloomberg. That is several billion more than Musk, who had been the world’s richest person for four years running. Stock in one of Musk’s biggest holdings, Tesla, has been moving in the opposite direction of Oracle’s, dropping 14 percent so far this year as of Tuesday.

The switch in the ranking came after a blockbuster earnings report from Oracle, powered by multibillion-dollar orders from customers as the AI race heats up.

Ellison’s net worth is largely derived from his 41 percent stake in Oracle.

Another news organisation with a long history of tallying the world’s richest, Forbes, still has Musk at the top, at $439bn. Bloomberg put his net worth at $385bn. The difference is in how the two estimate the value of Musk’s rocket company SpaceX, among other private holdings.

It comes as Tesla shareholders have offered Musk a $1 trillion compensation package.

With Ellison’s surging fortune on Wednesday, he could fund the lifestyles of five million US families for a year, about the entire population of Florida, allowing them to all quit their jobs, assuming the US median household income.

The fintech company made its debut on the New York Stock Exchange on Wednesday.

Klarna, the Swedish buy-now-pay-later company, has made its highly anticipated public debut on the New York Stock Exchange (NYSE), the latest in a run of high-profile initial public offerings this year.

Klarna sold 34.3 million shares to investors at $40 a share late on Tuesday and was listed on the exchange on Wednesday. That is above the forecasted range of $35 to $37 a share and values the company at more than $15bn. The stock is expected to start trading once the NYSE is able to initiate the first batch of trades.

The amount of money raised in Klarna’s initial public offering, approximately $1.37bn, is the largest IPO this year, according to Renaissance Capital. That’s notable because 2025 has been one of the busier years for companies going public.

Other IPOs this year include the design software company Figma and Circle Internet Group, which issues the USDC stablecoin. Investors are also looking forward to the expected market debuts of the ticket exchange StubHub and the cryptocurrency exchange Gemini, which is majority-owned by twins Cameron and Tyler Winklevoss.

Founded in 2005 as a payments company, Klarna entered the United States buy-now-pay-later market in 2015 in partnership with department store operator Macy’s. Since then, Klarna has expanded to hundreds of thousands of merchants and embedded itself in internet browsers and digital wallets as an alternative to credit cards. The company recently announced a partnership with Walmart.

Klarna will trade under the symbol “KLAR.” While the company was founded in Sweden and is a popular payment service in Europe, company executives said they made the decision to go public in the US as a signal that Klarna’s future growth opportunities lay with the US shopper.

“It’s the largest consumer market in the world, and it’s the biggest credit card market in the world. It’s a tremendous opportunity, from our perspective,” said CEO and co-founder Sebastian Siemiatkowski in an interview with The Associated Press ahead of the IPO.

Over the years and in multiple interviews, Siemiatkowski has made it clear that Klarna wants to steal away customers from the big credit card companies and sees credit cards as a high-interest, exploitative product that consumers rarely use correctly.

Split purchases

Klarna’s most popular product is what’s known as a “pay-in-4” plan, where a customer can split a purchase into four payments spread over six weeks. The company also offers a longer-term payment plan where it charges interest. The business model has caught on globally, particularly among consumers who are reluctant to use credit cards. The company said 111 million consumers worldwide have used Klarna.

Klarna and other buy-now-pay-later companies have attracted increased public interest in recent years as the business model has caught on. State and federal regulators, as well as consumer groups, have expressed some degree of worry that consumers may overextend themselves financially on buy-now-pay-later loans just as much as they do with credit cards.

Siemiatkowski says the company is actively monitoring how consumers use their products, and the average balance of Klarna users is less than $100. Because the company issues loans that are six weeks or less, Klarna argues it can more easily adjust its underwriting standard depending on economic conditions.

Klarna reported second-quarter revenue of $823m in August before going public and said that it had an adjusted profit of $29m. The delinquency rate on Klarna’s “pay-in-4” loans is 0.89 percent, and on its longer-term loans for bigger purchases, the delinquency rate is 2.23 percent. Those figures are below the average 30-day delinquency rates on a credit card.

Klarna will now be the second-largest buy-now-pay-later company by market capitalisation behind Affirm. Shares of Affirm have surged more than 40 percent so far this year, putting the value of the US-based company around $28bn, helped by a belief among investors that buy-now-pay-later companies may take away market share from traditional banks and credit cards. Affirm fell slightly on Wednesday.

Klarna’s primary underwriters for the IPO were JPMorgan Chase and Goldman Sachs.

The Supreme Court has scheduled to hear the case in November, lightning fast by its typical standards.

The United States Supreme Court has granted an unusually quick hearing on whether President Donald Trump has the power to impose sweeping tariffs under federal law.

The justices said on Tuesday that they will hear arguments in November, which is lightning fast by the typical standards of the nation’s highest court.

The small businesses and states that challenged the tariffs in court also agreed to the accelerated timetable. They say Trump illegally used emergency powers to set import taxes on goods from almost every country in the world, nearly driving their businesses to bankruptcy.

The justices also agreed to hear a separate challenge to Trump’s tariffs brought by a family-owned toy company, Learning Resources.

Two lower courts have found that most of the tariffs were illegally imposed, though a 7-4 appeals court has left them in place for now.

The levies are part of a trade war instigated by Trump since he returned to the presidency in January, which has alienated trading partners, increased volatility in financial markets and driven global economic uncertainty.

Trump has made tariffs a key foreign policy tool, using them to renegotiate trade deals, extract concessions and exert political pressure on countries. Revenue from tariffs totalled $159bn by late August, more than double what it was at the same point a year earlier.

The Trump administration asked the justices to intervene quickly, arguing the law gives him the power to regulate imports and that the country would be on “the brink of economic catastrophe” if the president were barred from exercising unilateral tariff authority.

The case will come before a court that has been reluctant to check Trump’s extraordinary flex of executive power. One big question is whether the justices’ own expansive view of presidential authority allows for Trump’s tariffs without the explicit approval of Congress, which the US Constitution endows with the power to levy tariffs.

Three of the justices on the conservative-majority court were nominated by Trump in his first term.

Impact on trade negotiations

US Solicitor General D John Sauer has argued that the lower court rulings are already impacting those trade negotiations. Treasury might take a hit by having to refund some of the import taxes it has collected, Trump administration officials have said. A ruling against the tariffs could even hamper the nation’s ability to reduce the flow of fentanyl and efforts to end Russia’s war against Ukraine, Sauer argued.

The administration did win over four appeals court judges who found the 1977 International Emergency Economic Powers Act, or IEEPA, lets the president regulate importation during emergencies without explicit limitations. In recent decades, Congress has ceded some tariff authority to the president, and Trump has made the most of the power vacuum.

The case involves two sets of import taxes, both of which Trump justified by declaring a national emergency: the tariffs first announced in April and the ones from February on imports from Canada, China and Mexico.

It does not include his levies on foreign steel, aluminium and autos, or the tariffs Trump imposed on China in his first term that were kept by former President Joe Biden, a Democrat.

Trump can impose tariffs under other laws, but those have more limitations on the speed and severity with which he could act.

Argentina’s markets have tumbled, with the peso currency at a historic low, after a heavy defeat for President Javier Milei’s party at the hands of the Peronist opposition at local elections stoked worries about the government’s ability to implement its economic reform agenda.

On Monday, the peso was last down almost 5 percent against the US dollar at 1,434 per greenback while the benchmark stock index fell 10.5 percent, and an index of Argentine stocks traded on United States exchanges lost more than 15 percent. Some of the country’s international bonds saw their biggest falls since they began trading in 2020 after a $65bn restructuring deal.

The resounding victory for the Peronists signalled a tough battle for Milei in national midterm elections on October 26, when his party is aiming to secure enough seats to avoid overrides to presidential vetoes.

The government now faces the difficult choice of whether to allow the peso to depreciate ahead of next month’s midterms or spend its foreign exchange reserves to intervene in the FX market, according to Pramol Dhawan, head of EM portfolio management at Pimco.

“Opting for intervention would likely prove counterproductive, as it risks derailing the IMF programme and diminishing the country’s prospects for future market access to refinance external debt,” Dhawan said via email, referring to the International Monetary Fund (IMF). “The more resources the government allocates to defending the currency, the fewer will be available to meet obligations to bondholders — thereby increasing the risk of default.”

He said early indications that the government may double down on the current strategy “would be a strategic misstep”.

The 13-point gap in the Buenos Aires Province (PBA) election in favour of the opposition Peronists was much wider than polls anticipated and what the market had priced in. The government setback at the polls adds to recent headwinds for a market that had until recently outperformed its Latin American peers.

“We had our reservations about the market being too complacent regarding the Buenos Aires election results. The foreign exchange market will undoubtedly be under the spotlight, as any instability there can have a ripple effect on Argentine assets,” said Shamaila Khan, head of fixed income for emerging markets and Asia Pacific at UBS, in response to emailed questions.

“However, it’s important to note that simply using reserves to prop up the currency isn’t likely to provide much reassurance to the market,” she added. “The midterm elections, in my opinion, carry more weight and their outcome will significantly influence how Argentine assets perform in the coming months.”

The bond market selloff saw the country’s 2035 issue fall 6.25 cents, on track for its largest daily drop since its post-restructuring issuance in 2020.

Based on official counts, the Peronists won 47.3 percent of the vote across the province, while the candidate of Milei’s party took 33.7 percent, with 99.98 percent of the votes counted.

Argentina – one of the big reform stories across emerging markets since Milei became president in December 2023 – has seen its markets come under heavy pressure over the last month following a corruption scandal involving Milei’s sister and political gatekeeper Karina Milei where she has been accused of accepting bribes for government contracts..

The government defeat also comes after the IMF approved a $20bn programme in April, of which some $15bn has already been disbursed. The IMF has eagerly backed the reform programme of Milei’s government to the point that its director, Kristalina Georgieva, had to clarify remarks earlier this year in which she invited Argentines to stay the course with the reforms.

The IMF did not respond to questions on whether this vote result would change its relationship with the Milei administration or alter the programme.

Market selloff

Argentina’s main equity index has dropped around 20 percent since the government corruption scandal broke, its international government bonds have sold off, and pressure on the recently unpegged peso has forced authorities to start intervening in the FX market.

“The result was much worse than the market expected – Milei took quite a big beating, so now he has to come up with something,” said Viktor Szabo, portfolio manager at Aberdeen Investments.

Morgan Stanley had warned in the run-up to the vote that the international bonds could fall up to 10 points if a Milei drubbing dented his agenda for radical reform. On Monday, the outcome saw the bank pull its ‘like’ stance on the bonds.

Barclays analyst Ivan Stambulsky pointed to comments from Economy Minister Luis Caputo on Sunday that the country’s FX regime won’t change.

“We’re likely to see strong pressure on the FX and declining reserves as the Ministry of Economy intervenes,” Stambulsky said. “If FX sales persist, markets will likely start wondering what will happen if the economic team is forced to let the currency depreciate before the October mid-terms.”

Some analysts, however, predicted other parts of the country were unlikely to vote as strongly against Milei as in Buenos Aires province given it is a traditional Peronist stronghold.

They also expected the Milei government to stick to its programme of fiscal discipline despite economic woes.

“The Province of Buenos Aires midterm election delivered a very negative result for the Milei administration, casting doubt on its ability to deliver a positive outcome in October’s national vote and risking the reform agenda in the second half of the term,” said JPMorgan in a Sunday client note.

“The policy mix adopted in the coming days and weeks to address elevated political risk will be pivotal in shaping medium-term inflation expectations — and, ultimately, the success of the stabilisation programme.”

Canadian PM Carney also announced a fund of $5 billion in Canadian dollars ($3.6bn US) to help firms in all sectors hurt by tariffs.

Canada will waive a requirement that 20 percent of all vehicles sold next year be emissions-free, part of an aid package designed to help companies deal with damage done by tariffs from United States President Donald Trump.

Prime Minister Mark Carney made the announcement on Friday.

The 20 percent target was mandated by the Liberal government of then-Prime Minister Justin Trudeau in 2023.

Carney, Trudeau’s successor, said waiving the rule would help the industry deal with punitive US measures that are also targeting the steel and aluminium sectors.

“This will provide immediate financial relief to automakers at a time of increased pressures on economic competitiveness,” Carney told a televised press conference.

Ottawa will also launch an immediate 60-day review to reduce costs linked to the EV sales requirement.

The Canadian Vehicle Manufacturers’ Association welcomed the move, saying the push for mandates imposed unsustainable costs on companies and threatened investment.

Carney said it was too soon to draw any conclusions about whether Ottawa should lift the 100 percent tariffs it imposed on Chinese-made electric vehicles last year. China on Friday prolonged a probe into imports of canola from Canada, one of the world’s leading suppliers.

Carney, who won an April election on the need to diversify the economy away from the US, said Ottawa would set up a new fund worth $5 billion Canadian dollars ($3.6bn US) with flexible terms to help firms in all sectors affected by tariffs.

The US measures are “causing extreme uncertainty that is holding back massive amounts of investment”, he said.

Ottawa will introduce a new policy to ensure the federal government buys from Canadian suppliers and is also introducing a new biofuel production incentive, with more than $370 million Canadian dollars ($267m US) for farmers to address immediate competitiveness challenges.

Carney did not mention specific new aid for the steel and aluminium sectors. When pressed, he said companies could apply for help from existing funds.

Nestle has fired CEO Laurent Freixe after just one year in the job following an investigation into an undisclosed “romantic relationship”, ousting its second chief executive in a year and throwing the Swiss food giant into its deepest leadership chaos in decades.

Freixe’s sudden dismissal followed an investigation into an undisclosed romantic relationship with a direct subordinate that breached Nestle’s code of business conduct, Nestle said late on Monday.

Freixe was replaced by Nespresso chief Philipp Navratil, a rising star at the world’s largest food company as it battles slowing sales, the impact of United States tariffs and eroding investor confidence after years of underperformance.

The Frenchman’s predecessor Mark Schneider failed to cope with the challenge, and it cost him his job in August 2024. Paul Bulcke, CEO from 2008 to 2016, will step down as chairman in April and will be replaced by Pablo Isla, a former CEO of Spanish fashion retailer Inditex.

“The loss of two CEOs and a chairman in a year is of historic proportions for Nestle,” said Ingo Speich, head of corporate governance and sustainability at Deka, a top 30 Nestle investor.

“The new CEO needs to fix the business model and bring volumes back. He needs to do better M&A [mergers and acquisitions] and focus more on emerging markets.”

The upheaval underscores the struggle not only at Nestle but also other consumer goods companies to reignite sales and recover stock values as the post-pandemic cost-of-living crisis drives consumers towards cheaper alternatives. Meanwhile, US tariffs threaten to further inflate prices and alienate already price-sensitive shoppers.

Shares in the maker of Nescafe and KitKat chocolate bars were down 0.8 percent in Zurich by 1:18pm (11:18 GMT).

Speak Up

The company said concerns about a possible relationship were raised by staff via the company’s internal reporting channel, Speak Up, although an initial investigation was unsubstantiated. Freixe had initially denied the relationship to the board, a company spokesperson said.

When staff concerns persisted, Nestle said it ordered an investigation overseen by Bulcke and Lead Independent Director Isla with the support of independent outside counsel. Swiss media reported that Swiss lawyers from the Baer & Karrer law firm helped with the inquiry.

Freixe, who spent 39 years with Nestle, will receive no exit package, the company told the Reuters news agency.

In a short statement, Bulcke thanked Freixe for his years of service at Nestle but said the dismissal was a “necessary decision”.

His dismissal adds to a list of top executives forced to resign after investigations into their relationships with colleagues.

Energy giant BP’s former CEO Bernard Looney and McDonald’s CEO Steve Easterbrook were both removed for failing to disclose relationships with colleagues.

The Swiss financial news website Inside Paradeplatz reported that Freixe met the woman in 2022 before he became CEO and when he was head of Nestle’s Latin America business.

Freixe was not immediately available to comment when contacted via email. The identity of the female subordinate has not been made public.

Swiss law does not prohibit relationships between senior executives nor does it require disclosure although most large companies have internal codes of conduct that require they are disclosed.

Corporate governance expert Peter V Kunz from the University of Bern said he was not familiar with Nestle’s rules but said requirements at most public companies were broadly similar.

“In this respect, Mr Freixe’s behaviour – regardless of whether it was legal or not – seems to me to be simply stupid and incomprehensible in this day and age,” Kunz told Reuters, adding that he did not think investors had grounds for legal action against Nestle.

Opportunity for overhaul

Nestle’s shares, a bedrock of the Swiss stock exchange, have lost almost a third of their value over the past five years, underperforming their European peers.

Freixe’s appointment failed to halt the slide, and the company’s shares shed 17 percent of their value during his leadership, disappointing investors.

One top 20 Nestle investor welcomed news of the change, saying Freixe had been a disappointment and bringing in Navratil was an opportunity for a more ambitious overhaul.

The new CEO needs to slim down the company, cut costs and above all reduce the headcount, the investor, who declined to be named due to the sensitivity of the matter, said, adding that it is also crucial for the company to raise organic growth to boost volumes.

“The cash flow must cover the dividend,” the investor said. “That’s an absolute priority.”

In July, Nestle launched a review of its underperforming vitamins business, which could lead to the divestment of some brands after first-half sales volumes missed expectations.

Freixe’s dismissal was featured on the front page of Swiss newspapers with Neue Zuercher Zeitung noting that Nestle had lost its “legendary stability” during which CEOs stayed on for years before eventually becoming chairmen.

AJ Bell investment director Russ Mould said the company would likely face a period of uncertainty over whether Navratil will follow the same path as his predecessor.

“While Navratil is also an internal appointment, he will want to put his own mark on strategy, and that suggests the clock could be reset when it comes to the turnaround plan,” Mould said.

BREAKINGBREAKING,

The US president says Lisa Cook to be removed from position ‘effective immediately’.

United President Donald Trump has ordered the removal of Federal Reserve governor Lisa Cook amid unproven claims of mortgage fraud.

In a letter posted on social media on Monday night, Trump said Cook was being sacked “effective immediately”, in accordance with his powers under the US Constitution and the 1913 Federal Reserve Act.

Citing allegations made last week by the US federal mortgage regulator, Trump said there was “sufficient reason to believe you may have made false statements on one or more mortgage agreements”.

“The Federal Reserve has tremendous responsibility for setting interest rates and regulating reserve and members banks,” Trump said in the letter, which was shared on his platform Truth Social.

“The American people must be able to have full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve. In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”

Trump had on Friday threatened to fire Cook, who was appointed by former President Joe Biden, if she did not resign.

Trump’s extraordinary move is set to raise further questions about the independence of the US central bank, which has been under intense pressure from Trump to lower interest rates.

In a letter addressed to US Attorney General Pam Bondi and Department of Justice official Ed Martin earlier this month, Federal Housing Finance Agency director Bill Pulte, a staunch Trump ally, alleged that Cook had listed two properties as her primary home addresses.

The Federal Reserve did not immediately respond to Al Jazeera’s request for comment.

More to follow…