MARKET WRAPS

STOCKS: U.S. stocks fell as the 10-year Treasury yield jumped back over 5% to the highest level since 2007.

TREASURYS: Investors sold off U.S. government debt, sending Treasury yields to new highs amid mounting concerns about inflation, rising interest rates and the Middle East conflict.

FOREX: The U.S. dollar rose against a basket of currencies Wednesday as markets bet on the Federal Reserve raising interest rates further.

COMMODITIES: Oil prices staged a rebound, pulling up from a five-session losing streak as investors weighed the prospect of improved Saudi export flows and U.S.-Iran diplomacy against the potential for further disruptions.

HEADLINES

Iran's President Says Open to Talks but Won't Bow to U.S.

Iranian President Masoud Pezeshkian said Wednesday that Iran is ready

for negotiations to end the conflict with the U.S. but warned that Tehran

will never surrender to what he called Washington's bullying, or give up

its nuclear program.

Pezeshkian's remarks at the United Nations General Assembly come

during a protracted stalemate between the U.S. and Iran, with Washington

seeking to choke off Iran's economy through a naval blockade and

sanctions while Tehran continues striking at commercial vessels in the

Strait of Hormuz and regional infrastructure.

A day earlier, the U.S. and Iran said they had held indirect talks on

the sidelines of the General Assembly to discuss steps to end

hostilities.

U.S. Invites Putin to G-20 Summit at Trump Resort in Florida

The Trump administration has invited Russian President Vladimir Putin

to President Trump's resort in Florida in December to attend the Group of

20 leaders meeting, Secretary of State Marco Rubio said Wednesday.

"We think it's an opportunity for him to engage not just with the

president, but with other world leaders," Rubio told reporters in New

York after meeting with Russian Foreign Minister Sergei Lavrov on the

sidelines of the United Nations General Assembly.

"We hope that's an invitation he'll accept," he added.

Fed's Barr Says More Rate Hikes Likely Needed to Return Inflation to

Target

Federal Reserve Gov. Michael Barr said further rate increases are

likely needed to ensure inflation comes down to target in a timely

fashion.

Barr expressed that he supported the Fed's decision to raise interest

rates by a quarter-percentage point last week, speaking at an event in

Chicago. He noted that risks to achieving the Fed's inflation target have

risen.

"Inflation is above our 2 percent target and not clearly trending

toward target in a timely way," a published text of his remarks said. "In

my base case, further policy adjustments are likely to be needed to

ensure inflation comes down to target in a timely fashion."

Anthropic Leaders Back Startup Developing System to Detect Biological

Threats

Two Anthropic leaders are investing in a small startup backed by Peter

Thiel that is developing hardware to detect viruses in the air, as fears

grow that artificial-intelligence systems might cause novel biological

threats.

Logan Graham, head of Anthropic's frontier red team and Sholto

Douglas, a member of its technical staff, invested in a $25 million seed

round for Redwood City-Calif.-based Pilgrim that valued it at $150

million, the company said. They invested in a personal capacity along

with Coinbase co-founder Fred Ehrsam, among other technology leaders, in

a round led by venture capital firm Buckley Ventures. Earlier investors

include Figma CEO Dylan Field.

The startup, Pilgrim, has built a 50-pound tripod-mounted hardware

device called Argus that is packed with sensors that combines air

sampling and genomic sequencing to detect biological threats, like Ebola

or anthrax. It signed an agreement with the Centers for Disease Control

and Prevention to develop an automated airborne biosurveillance system

for the U.S. and has begun deploying Argus in some parts of the country.

Disney Boosts Prices on Several Streaming Subscriptions

Disney is increasing prices on several of its streaming subscriptions,

a person familiar with the matter said, following similar moves from

rivals in recent months.

Standalone plans for the entertainment company's Disney+ and Hulu

streaming services will now cost an additional $2.50, at $21.49 a month,

the person said.

The increase puts the price of Disney's premium streaming plans more

on par with competitor Netflix, which sells its ad-free premium service

for $26.99 a month.

McDonald's Pledges $8.5 Billion in Investments to Help Franchisees

CHICAGO-McDonald's plans to invest billions of dollars to help its

franchisees make investments in equipment and their operations to better

compete with fast-food rivals.

The restaurant giant said Wednesday that it would spend around $8.5

billion to provide franchisees with rent assistance and help with capital

improvements through 2036 as part of a new corporate strategy. The

financial commitment, the company said, is in addition to its typical

capital-spending plans.

The pillars of the company's strategy, known as Next, are food taste

and quality, the consumer experience, restaurant operations and

hospitality. Executives introduced Next earlier this year and are sharing

details on its plans at an investor event Wednesday.

YouTube Is Battling Netflix Over Top Talent

Popular digital creators helped YouTube become the world's dominant

source of video. Now it is fighting to keep their loyalty.

The streaming platform, which is owned by Alphabet's Google, faces

growing competition from Netflix on turf it has controlled for two

decades. The platform known for "Stranger Things" and "KPop Demon

Hunters" is writing big checks to lure the producers of shows like "Good

Mythical Morning" and "Alan's Universe" to make Netflix their second

home.

At an event Wednesday, YouTube rolled out better tools for digital

producers that could help it to keep more of their content exclusively.

Flock Outlines New Limits on License-Plate Searches in Letter to U.S.

Senate

Flock Safety told the U.S. Senate that it has tightened the

requirements for police officers and other users to access and search its

database of billions of license plates amid growing concerns about misuse

of its divisive product.

The Atlanta-based company has made changes to the information users

provide when explaining their searches, Flock's chief legal officer said

in a letter to Sen. Josh Hawley, a Republican from Missouri. Flock has

said its cameras scan about 20 billion plates a month. While users have

always been required to justify their searches of the company's database,

the information was entered "in a free-text field," yielding answers that

weren't always specific, the company said in the letter viewed by The

Wall Street Journal.

Flock has now added a drop-down menu with standardized categories

modeled after the Federal Bureau of Investigation's data-reporting

system. Law-enforcement searches will require a case number in order to

conduct a search by the end of the year, although the system can be

bypassed in an emergency, Flock said.

TALKING POINT Meta's Muse AI Agent Triggers Worries About Brokerage Stocks Concerns about the impact of artificial intelligence on brokerage firms have repeatedly driven selloffs in those firms' stocks. On Tuesday, the sector took a licking, this time because of worries about Facebook parent Meta's new personal AI assistant, Muse.

Shares of Charles Schwab dropped 6% on Tuesday, its largest percentage decrease since April 16. LPL Financial and Raymond James Financial fell 7.4% and 3.5%, respectively, amid a broader selloff in financial stocks.

Those three stocks saw more muted activity on Wednesday, with Schwab down 0.2% early in the afternoon, LPL up 0.1%, and Raymond James down 0.3%. The Vanguard Financials ETF was down 0.1%. The benchmark S&P 500 index was down 0.8%.

Meta says Muse, which has surged to the top spot in Apple's app store, can help users with a range of tasks, including sending emails, booking travel, and making purchases. Meta unveiled Muse earlier this month.

Investors' concern about Muse centers on whether it or other AI tools may eventually help investors automatically move idle cash out of low-paying sweep accounts at brokerage firms to higher-paying options, such as high-yield savings accounts and money-market funds. That could put a dent in profits at Schwab, LPL, and other companies that generate handsome net interest income from sweep accounts. NII is the difference between what financial services companies pay in interest on customer deposits and what they earn on interest-bearing assets, such as loans.

The potential stakes for brokerage firms are higher in this elevated interest-rate environment, Truist analyst David Smith writes in a Sept. 22 research note. That means customers have stronger incentives to move idle dollars from low-paying sweep accounts to higher-yielding accounts.

There are hurdles, however, to a hypothetical "max cash sorting" scenario becoming reality, Smith says. Cash balances in sweep accounts are unlikely to go to zero because customers will want to keep dry powder handy for investing opportunities. In addition, some Schwab rivals have offered high-yield savings and brokerage accounts for years, and that hasn't meaningfully hindered Schwab's asset growth, he adds. Plus, brokerage firms aren't without options. If their profits on sweep cash drop, they can make up for it by charging more for other services.

--By Andrew Welsch

Expected Major Events for Thursday 00:30/JPN: Sep Japan Flash Manufacturing PMI

05:00/JPN: Aug Convenience Store Sales

05:00/JPN: Aug Steel Production

06:45/FRA: Sep Monthly business survey (goods-producing industries)

06:45/FRA: Sep Consumer confidence survey

08:00/GER: Sep ifo Business Climate Index

08:00/GER: ifo Joint Economic Forecast of German economic research institutes

10:00/UK: Sep CBI Distributive Trades Survey

12:30/CAN: Jul Retail trade

12:30/US: 2Q International Transactions

12:30/CAN: Jul Payroll employment, earnings and hours, and job vacancies

12:30/US: 09/19 Unemployment Insurance Weekly Claims Report - Initial Claims

12:30/US: U.S. Weekly Export Sales

12:30/US: 2Q U.S. International Investment Position

13:00/RUS: Weekly International Reserves

14:00/US: Aug New Residential Sales

14:30/US: 09/18 EIA Weekly Natural Gas Storage Report

15:00/US: Sep Federal Reserve Bank of Kansas City Survey of Tenth District Manufacturing

20:30/US: Foreign Central Bank Holdings

20:30/US: Federal Discount Window Borrowings

23:01/UK: Sep UK Consumer Confidence Survey

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Expected Earnings for Thursday Amerityre Corp (AMTY) is expected to report for 4Q.

BlackBerry Ltd (BB,BB.T) is expected to report $0.05 for 2Q.

Costco Wholesale Corp (COST) is expected to report $6.53 for 4Q.

Darden Restaurants Inc (DRI) is expected to report $2.06 for 1Q.

Lite Strategy Inc $(LITS)$ is expected to report for 4Q.

Orbit Garant Drilling (OGD.T) is expected to report for 4Q.

Rave Restaurant Group Inc (RAVE) is expected to report for 4Q.

Scholastic Corp (SCHL) is expected to report $-3.42 for 1Q.

TD SYNNEX Corp $(SNX)$ is expected to report $3.77 for 3Q.

Trio-Tech International (TRT) is expected to report for 4Q.

Vecima Networks Inc (VCM.T) is expected to report for 4Q.

tinyBuild Inc (TBLD.LN) is expected to report for Interim.

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This article is a text version of a Wall Street Journal newsletter published earlier today.