Flashpoints, Fed Bets, And A Thaw: Talking Point This Week

The Russian drone violation of Polish airspace as well as Israel's targeted attack on Hamas leadership in Doha took centerstage in geopolitical news. It almost seems that the world digests these news with ease. But yes, on Sept. 11, Poland invoked NATO’s Article 4 after the drone invasion, escalating tensions and prompting consultations among NATO allies. Also, the French government fell after Prime Minister François Bayrou lost a no-confidence vote in the Parliament. In more disturbing news, 31-year old Donald Trump ally Charlie Kirk was assassinated.

In non-geopolitical news, gold's spot price has soared roughly 5% this month, reaching a record $3,674.27 per ounce on Tuesday. In 2025, it has broken over 30 nominal records and surpassed the inflation-adjusted high from Jan. 21, 1980, when prices hit $850 an ounce. Mistral, France’s first artificial intelligence firm, is completing a Series C round to raise €1.7 billion, which has drawn new investment from ASML Holding NV, valuing the tech firm at €11.7 billion! Mistral has pitched itself as an alternative to Silicon Valley giants such as OpenAI and Google.

Here are the key talking points of this week:

US Data Strengthens The Case For Fed Rate Cuts

A surge in US jobless claims to a four-year high on Thursday cemented investors' bets for a Fed rate cut next week, weighing on the dollar and bond yields, and lifting Wall Street's three main indices to new highs. For now at least, expectations of easy monetary policy are clearly trumping growth worries. Russell 2000 outperformed on Thursday to a new 2025 high. Is there a macro case for US small caps? Well, US small-cap stocks have significantly underperformed for the past 12 months, but Gavekal Research argues that the trend could be changing, as financial deregulation and more interest rate cuts would disproportionately benefit smaller firms.

Thaw For Real?

Donald Trump seems to have softened his stance, however, affirming a "special relationship" with India, praising Modi as a "great Prime Minister" and personal friend, and expressing optimism about imminent trade talks. PM Modi reciprocated warmly, posting on X that he "deeply appreciates and fully reciprocates" Trump's sentiments, emphasising their "very positive and forward-looking Comprehensive and Global Strategic Partnership" as close friends and natural partners, with teams working to conclude negotiations swiftly.

Overnight, Trump's nominee for US Ambassador to India, Sergio Gor, testified before the Senate that the two nations share far more in common than India does with China, stressed Trump's "crystal clear" directive for India to halt Russian oil imports, and vowed to prioritise pulling India firmly into the US orbit while resolving tariff disputes, calling it one of America's most vital global ties. A Bloomberg Editorial Board opinion piece had written earlier that the White House should remember that the logic of American support for India hasn’t changed. It remains the world’s biggest democracy and a valuable partner in its most vital region. And that as part of the “Quad” diplomatic group, along with Japan and Australia, India can play a critical role in diversifying supply chains, developing advanced technology and upholding a rules-based order against Chinese pressure.

GST Conclave Takeaways

The NDTV Profit GST Conclave had some strong takeaways for businesses and policymakers alike. While corporates expressly mentioned that they will pass on the GST cut price differential, there was hope for clarity around ITC and concession tax. On larger topics, the political heavyweights weighed in strongly.

Finance Minister Nirmala Sitharaman spoke at length about the effort behind the GST reforms. When quizzed on the global equations and whether she is bullish on the India-China thaw, she observed that she would look at it cautiously. Commerce Minister Piyush Goyal did mention that the relationship is a work in progress. He also mentioned that FTAs with other blocs are opening up large markets, and there are more to come. CEA Anant Nageswaran was hopeful on growth, and even mentioned that if the rupee were to remain week (rupee hit record lows this week), it may not be undesirable in the short term.

Stunning Gains

Wearable devices shares exploded 978% on Sept. 11, 2025, after the Israeli company announced securing a breakthrough US patent for voice and gesture control technology. The stock surged from $1.01 to an intraday high of $10.89 before closing at $5.18. If we were to expand the frame a little, think of Opendoor Technologies. The stock has gone up 7x in the last six months. For those unfamiliar—Opendoor is an online platform that buys and sells residential real estate. The company has been reporting losses for the last five years. The stock surged 60% after Shopify’s Kaz Nejatian was named CEO. Some might call this “profitless prosperity.”

As we end, here a piece borrowed from the Marginalian, for I think it has a relevance for today's worldly events:

We are part and parcel of the big plan of things. We are simply instruments recording in different measure our particular portion of the infinite. And what we absorb of it makes for character, and what we give forth, for (our art). 

Have a great weekend everyone.