Good morning! Mr. Xi arrives in Washington this afternoon, and markets are carefully watching US-China relations after preliminary talks were reportedly "successful," according to the Treasury secretary.

Tuesday's oil price declines bounced a little after President Trump failed to provide details on progress with Iran, but most of Monday's optimism remained as investors stay bullish.

While the S&P 500 (^GSPC) closed flat and the Dow (^DJI) fell 0.4%, the Nasdaq (^IXIC) posted another all-time high after gaining 0.5%.

What we're watching Wednesday: Besides Xi and Trump, we'll be watching the start of Meta's Connect conference and more news from Qualcomm's conference in Hawaii (must be nice!).

It's a light day on the calendar, but we'll be watching for any economic surprises in S&P Global's economic activity data for September.

 Strong demand for Meta Platforms' (NASDAQ: META) Muse AI assistant has renewed investor enthusiasm for artificial intelligence ahead of the company's Connect conference. (Cheng Xin/Getty Images)

Heading into Meta Connect, Mark Zuckerberg and company have a massive hit on their hands.

Meta’s new artificial intelligence agent, Muse, has quickly risen to the top of the app charts, garnering glowing reviews from users and effusive praise from tech and business heavyweights. 

(Meanwhile, SpaceXAI's Grok has "modest demand.")

ChatGPT changed the narrative back in 2022. But sometimes not being first is the better place to be. And improbably, Meta's AI efforts have public sentiment on their side. 

Muse isn’t a chatbot. And it's not powered by the most sophisticated LLM. Its early success suggests that consumers, when it comes to new AI tools, want a particular kind of help from a special set of skills.

Muse allows people to create personalized AI agents, a multitasking go-getter that does things for you on the internet. 

Initial impressions have reflected well on Meta, which had been rocked by personnel changes, corporate reshufflings, and criticism of bottomless AI spending.

But Muse’s out-the-gate momentum has fueled a double-digit stock price surge, and underscored how Meta’s massive social platforms and advertising prowess could be the most viable path to AI profitability.

In Facebook, Instagram, and WhatsApp, Meta has a massive built-in marketing operation, given that it owns the means of communication/marketing and all the data to be gleaned from our social feeds.

But critically, the company also known for Cambridge Analytica is also convincing trustworthy people who matter.

“Meta deserves a tremendous amount of credit for the product work they have put in, as well as the massive infrastructure commitment entailed in providing users with a very capable virtual machine for free,” wrote Ben Thompson, author of the extremely respected and independent newsletter Stratechery.

Every new jobs report will be colored by the rapid progress of AI agents. (Getty)

Meta’s initial AI win isn’t all good news in the broader AI discussion.

Similar to every major update from frontier labs like Anthropic and OpenAI, signs of technological progress also inspire anxiety for what the spread of AI-powered tools means for working people and the tech and services companies that employ them. 

Muse's instant excellence raises some uncomfortable questions. If the AI assistant can successfully surf the web, acquire goods, and negotiate on behalf of its users, how soon will it and similar tools lead to job displacement?

Layoffs in the name of boosting efficiency aren’t unique to the AI era. But every new jobs report, specifically the bad ones, will be colored by the rapid progress of AI agents.

On the other hand, though AI tools may accelerate job losses or give corporations cover to shrink headcount, the potential for rehiring and the advent of new, AI-inspired roles and businesses may bring some balance to the employment equation. 

Meta CEO Mark Zuckerberg, for instance, is so confident that Muse will make money for small businesses and e-commerce companies that Meta's long-term business model is to keep Muse free or low-cost and instead take a small cut of commercial transactions. 

Early interest in AI agents is already creating knock-on effects in the AI ecosystem.

Shares of Intel have surged 25% over the past week, as investors eye the benefits coming to the semiconductor industry. CPUs, or central processing units, enable agents to perform tasks such as navigating websites and shopping online. They’ve taken on a new level of importance as AI agents gain traction among consumers. 

Vehicles identified as a Chinese-manufactured Chery Jaecoo J5 EV and an Omoda 9 plug-in hybrid are parked at a lot in Toronto, Ontario, on May 4, 2026. (Reuters/Carlos Osorio) · REUTERS / REUTERS

There's a long list of things the market is watching this week as Chinese leader Xi Jinping and President Trump get together in Washington, with trade and AI at the top of the list.

As our Washington Correspondent Ben Werschkul wrote in his preview, expect small steps rather than big breakthroughs. For the most part, investors want to see the two countries part ways without anything broken or on fire.

Progress would be a bonus, and with all the Big Tech CEOs in attendance on Wednesday evening, perhaps anything could happen.

But the automotive industry is worried about that "progress," if it meant a deal of some kind were to happen that opened up the American auto landscape to Chinese companies and their slick, cheap EVs.

Right now, 100% tariffs and bans from the Commerce Department prevent Chinese vehicles from vrooming onto American roads as they've done in Europe, Australia, Asia, Mexico, and even Canada.

But the Canadian dalliance with a small number of Chinese EVs has put automakers into a tizzy: People seem to like them — and their low prices.

Joint ventures seem to be the most likely way into the US market for Chinese companies. But even this would be very risky for Detroit's long-term prospects, and ahead of the meeting, a large coalition wrote to the president, urging the administration to "keep the door firmly shut."

Two very strong forces are in opposition: Detroit automakers and Americans' need to buy cars they can afford. Even if the automakers keep China at bay for now, you have to wonder when the math starts to tip the other way.

See what else is trending on Yahoo Finance.

(Tayfun Coskun/Anadolu via Getty Images)

There are many signs that investors are having a risk-friendly moment.

And perhaps the most obvious one is that bitcoin appears to be, for the lack of a better word, back.

Yesterday, we wrote about Michael Saylor's Strategy (MSTR) reclaiming coins and stock it lost during the lean summer. But for the most part, crypto analysts seem ready to make the big meteorological claim.

As Fundstrat's head of digital assets Sean Farrell told us this week: "The crypto winter is over."

The "credible" bitcoin breakout, as he put it, gives no guarantees that things will be "linear." Translation: Things could get spicy as people start paying attention again to something that they may have written off.

Compass Point's Ed Engel called it even more clearly: "We believe crypto is in the early innings of a new bull market and we see few signs of overheating."

With yields and inflation high — and concerns over the Fed's ability to solve the world's problems — it's logical to wonder if this is some sort of reaction to that as part of a fresh "debasement" trade. 

But bitcoin is only rarely a safe-haven asset. More often than not, it's a barometer that the market feels "risk-on."