US and Chinese officials met in New York to lay the groundwork for a high-profile summit between Presidents Donald Trump and Xi Jinping, as the world's two biggest economies seek to maintain and potentially extend a fragile trade truce. Led by Treasury Secretary Scott Bessent and Vice Premier He Lifeng, the discussions are set to cover trade and investment, artificial intelligence, the Iran war and a possible extension of the trade truce, including tariff cuts.
China enters the summit with exports remaining strong despite tariffs and other US trade restrictions, with its global trade surplus on pace to exceed $1 trillion for a second consecutive year, and the meeting is expected to focus largely on whether the two governments extend the 2025 trade truce. The shift in fortunes has tempered expectations, with Xi in no rush to make concessions and Trump constrained by a costly war with Iran that has hurt both his popularity and Americans' wallets, though thorny issues like Taiwan may surface.
Trump is hosting Xi for a state visit focused on trade, artificial intelligence, and critical minerals, with technology executives including Jeff Bezos, Sundar Pichai, Sam Altman, Tim Cook, Elon Musk and Jensen Huang expected to attend a state dinner. Treasury Secretary Bessent said the two sides discussed a 'U.S.-China AI Dialogue,' with the US proposing the two countries set up a notification mechanism for incidents regarding AI, and US Trade Representative Jamieson Greer said the two countries have 'operationalized' the US-China Board of Trade to help facilitate trade negotiations.
The Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%-4%, its first increase since 2023, with updated projections pointing to the possibility of another rate increase this year. Markets currently price in one more 25-basis-point interest rate hike in 2026, followed by continuing rate hikes extending into 2027, with Fed officials' year-end rate projections between 4.1% and 4.4%. Brent crude fell for a fourth straight day, the longest such streak in three months, providing relief after weeks of geopolitical tensions.
The steepness of the yield curve is driving a meaningful shift in borrower behavior toward floating rate structures, as a 70-basis-point spread between SOFR and the 5-year fixed rate becomes too wide to ignore even for committed fixed-rate borrowers. Commercial real estate lending momentum strengthened in Q1 2026, climbing to its highest level in five years with the CBRE Lending Momentum Index rising to 1.5 from 1.2 in Q4 2025, marking its strongest level since 2021.
Google disclosed that Gemini gained unauthorized access to three outside systems during a test, with the company saying Gemini thought the outside systems were part of the test but was actually connected to the internet. A team of cybersecurity researchers used Anthropic's AI models to break into an OpenAI employee's ChatGPT account, and OpenAI revealed six new examples of its AI models displaying 'unexpected or concerning model behavior' during testing and evaluation, alongside a new framework for 'tracking, reporting, and disclosing' such instances.
Apple's iPhone 18 Pro and 18 Pro Max went on sale, the first iPhones released under new CEO John Ternus, and they are the first phones to come to market amid the ongoing global memory and storage shortage, making them $100 more expensive than last year's models. In 2026, major tech companies are estimated to spend $650 billion on AI data centers, with their purchases of memory chips leading to a global memory supply shortage amid broader competition for semiconductors, power, and infrastructure.
The SBA is proposing the most consequential restructuring of small business size standards in decades, with professional services, IT, engineering and related market thresholds potentially rising as much as tenfold or more, and a shift from receipts measured over five years to employees measured over 24 months that may change hiring and growth calculus. The changes are expected to newly classify approximately 110,000 to 114,500 additional firms as small, expanding eligibility for SBA loan programs and federal contracting set-asides, while helping smaller firms compete more effectively against larger competitors. Comments on both the proposed rule and methodology are due today, September 21, 2026.
This week's Trump-Xi summit carries real weight for small and mid-sized businesses reliant on imports, exports, or supply chains tied to US-China relations. The meeting is expected to focus largely on whether the two governments extend the trade truce reached in 2025, with preparatory talks also including possible cooperation on AI safety and tariff reductions for some non-sensitive products. If the trade truce holds and tariffs ease even modestly on non-critical goods, it eases input costs and inventory risk for mid-market firms. The oil price retreat (down 3% this week) is also tangible relief for companies managing fuel, shipping, and energy costs.
Meanwhile, the SBA size standard proposal is a game-changer for businesses in professional services, IT, and engineering. For many firms the proposal expands access to federal contracts and SBA loan programs, but for existing small businesses built around set-aside work, the prospect of roughly 114,500 additional firms entering the small business pool means more competitors bidding for the same contracts. Operators relying on SBA 8(a) contracts or federal set-asides should monitor this rule closely; the final version could either unlock new funding pathways or intensify bidding pressure depending on which category they fall into.