MARKET WRAPS

STOCKS: An uncertain outlook for peace in the Middle East weighed on stocks on Thursday, with investors weighing dissonant reports on attacks and negotiations.

TREASURYS: The 10-year Treasury yield rose to its highest level since 2007 and the 30-year yield hit its highest since 2004 amid increasing expectations the Federal Reserve will raise interest rates at its October meeting.

FOREX: The dollar rose to an eight-week high against a basket of currencies.

COMMODITIES: Oil prices rose amid renewed Middle East escalation concerns after Saudi Arabia said it intercepted six ballistic missiles launched at the kingdom, while U.S.-Iran talks showed little sign of progress.

HEADLINES

Trump's Summit With Xi Starts With Pomp and Pageantry

WASHINGTON-A red carpet. Members of the U.S. military holding Chinese

and U.S. flags on the roof of the White House. A flyover of U.S. jet

fighters and a stealth bomber.

President Trump kicked off a summit with China's Xi Jinping with an

extravagant welcome ceremony, as Washington and Beijing look to ease

brewing tensions over the war in Iran, artificial intelligence and trade.

It is Xi's first visit to Washington in more than a decade.

Trump and first lady Melania Trump shook hands with Xi and his wife,

Peng Liyuan, on a red carpet outside the White House on Thursday morning.

Behind them, the U.S. Marine Silent Drill Platoon, which features

two-dozen newly trained infantry Marines, and U.S. Joint Forces Command

performed a presidential salute.

U.S. Treasury Yields Hit Multiyear Highs on Economic Data, Fed Rate-Boost

Expectations

Yields on U.S. Treasurys continued to set fresh multiyear highs amid a

strong batch of economic data, increasing expectations the Federal

Reserve will raise interest rates at its October meeting.

The 10-year Treasury yield rose as high as 5.165%, the highest level

since 2007, while the 30-year yield increased to 5.455%, the highest

since 2004, according to Tradeweb data.

U.S. oil prices also continued to rise, with Brent crude prices

climbing over 4%, to $107.87 a barrel, adding to inflation concerns. U.S.

natural gas futures rose more than 6%.

Fed's Paulson Joins Chorus of Policymakers Predicting More Rate Increases

Ahead

Anna Paulson, president of the Federal Reserve Bank of Philadelphia,

joined the growing number of policymakers warning that the central bank

will likely need to implement additional rate increases to rein in

inflation.

In remarks at the Philadelphia Fed's Annual Fintech Conference,

Pauslon said she supported raising the federal-funds rate to a range of

3.75% to 4% at last week's meeting. She characterized the higher rate as

a "recalibration" designed to push inflation back to the Fed's 2% target.

"Looking ahead, if conditions evolve as I expect, some modest further

tightening may be warranted," said Paulson, who is currently a voting

member of the policy-setting Federal Open Market Committee. "Returning

inflation to 2% is a top priority, and I will support the policy path

that gets us there while carefully weighing risks to the labor market

along the way."

Mortgage Rates Just Hit 7%. Here's How the Housing Market Is About to

Change.

Average 30-year mortgage rates hit 7.03% this week, the first time

they have surpassed 7% since the beginning of last year, according to

Freddie Mac. The threshold doesn't hold any particular economic

significance, but it is psychologically important for buyers. Economists

say that with mortgages above 7%, more potential buyers are likely to

stick to the sidelines, dragging down a housing market that is in its

fourth year of stagnant sales.

Here are five things to know about how the housing market changes with

rates above 7%.

Jeff Bezos' Blue Origin Is Fueled With $30 Billion of His Fortune

Jeff Bezos has invested $30 billion in Blue Origin since its founding

in 2000, an extraordinary commitment from the Amazon.com founder into a

company that aims to rival SpaceX.

Documents reviewed by The Wall Street Journal discuss that investment,

which has helped Blue Origin become a large space company with sites

around the country, around 15,000 employees and an ambitious growth plan.

The total investment includes $2 billion that Bezos is putting into

Blue Origin as part of the company's first-ever capital raise that

includes outside investors. The company has already raised $10 billion

for that round, which values the company at $140 billion, according to

the documents and people familiar with the matter.

OpenAI Agents Tried to Hack Four More Websites While Seeking Data

OpenAI's artificial-intelligence agents were performing mundane online

data-collection tasks earlier this year-and went to extraordinary lengths

to get it.

Newly published findings from nonprofit AI research lab Transluce, as

well as from the Australian government, found that AI agents linked to

OpenAI attempted in May and June to break into university and government

websites to seek information. The attempted hacks join a growing list of

incidents in which AI agents have gone rogue in pursuit of their goals.

This time, however, the attempted breaches weren't tied to OpenAI

evaluations of cybersecurity, where models were ordered to hack, but

rather what appear to be internal training of models and benchmark tests

of their ability to find public information on the internet. The agents

were seeking information like Thai labor force statistics, Korean

crude-oil imports and Australian dermatological data.

Amazon to Expand Robot-Making Capacity With New, $100-Million Indiana Hub

Amazon.com, already one of the world's biggest robot makers, is

scaling up production as it automates more of the work inside its

warehouses.

The e-commerce company said it would spend more than $100 million on a

new robotics-manufacturing facility in Greenwood, Ind., which is set to

open by 2028.

Amazon last month announced plans to construct another robotics hub in

Austin, Texas. The new facilities will double the number of Amazon's

robot-making plants to four.

New York State Sues Polymarket in Escalating Crackdown on Prediction

Markets

New York state, one of the largest markets for gambling in the U.S.,

escalated its fight against prediction markets Thursday by suing

Polymarket's domestic arm, alleging that the bet-on-nearly-everything

site was illegally running a gambling operation.

The state, where Polymarket and its chief rival-Kalshi-are based, has

aggressively sought to rein in the rapidly growing industry. Attorney

General Letitia James has brought suits against competitors with similar

claims, and New York City Council Speaker Julie Menin has raised a

possible investigation into the companies' marketing practices.

"We believe in New York and we're staying here. While the AG's

decision to copy/paste a recycled lawsuit is disappointing, we'll fight

for our users," Neal Kumar, Polymarket's chief legal officer, said in a

statement.

TALKING POINT BlackRock Investment Portfolios Debut on the Blockchain as Digital Tokens

BlackRock has built three investment portfolios that will trade as digital tokens, marking the asset manager's latest push to bring traditional assets to the alternative financial system that powers cryptocurrencies.

The world's largest asset manager's model portfolios, or preset investing templates, will be tokenized by Ondo Finance. In tokenized form, funds, stocks and other assets can trade on the blockchain, the digital ledger that underpins many cryptocurrencies.

Model portfolios have emerged as a popular way for financial advisers to outsource investment decisions to professional investors. According to Broadridge Financial Solutions, 87% of the 400 advisers it surveyed said they used them, with 25% noting they used them exclusively. And they are gaining momentum; total assets within the portfolios surged to $9.8 trillion in June from $7.7 trillion a year earlier.

The new portfolios will be the first BlackRock has designed to be tokenized by another firm.

Ondo is launching seven tokenized model portfolios on Thursday, including the three from BlackRock: high-income, diversified growth and high-growth.

The BlackRock portfolios will hold a mix of stock, bond and bitcoin exchange-traded funds depending on their profile. Ondo will issue a token tracking each of the portfolios. As investors buy them, self-executing software automatically buys shares in the underlying ETFs that make up the portfolio.

The model portfolios will initially be available to non-U. S. investors, who won't have direct shareholders rights in the underlying securities held. Investors will be able to borrow against their tokens, transfer them and trade them 24/7.

--Vicky Ge Huang, The Wall Street Journal

Expected Major Events for Friday 05:00/JPN: Aug Supermarket sales

05:30/JPN: Aug Tokyo area department store sales

05:30/JPN: Aug Nationwide department store sales

06:00/GER: Oct GfK consumer climate survey

06:45/FRA: 2Q Job creation

08:30/UK: Aug Capital issuance statistics

12:30/US: Aug Advance Report on Durable Goods

14:00/US: Sep University of Michigan Survey of Consumers - final

All times in GMT. Powered by Onclusive and Dow Jones.

Expected Earnings for Friday Escalon Medical Corp (ESMC) is expected to report for 4Q.

Lunai Bioworks Inc (LNAI) is expected to report for 4Q.

NanoViricides Inc $(NNVC)$ is expected to report $-0.10 for 4Q.

Southern Banc Co Inc (SRNN) is expected to report for 4Q.

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