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U.S. boosts missile defense funding, curb your enthusiasm on U.S. tax reform, and RBI poised to keep rates unchanged. Here are some of the things people in markets are talking about.

Shooting Down ‘Rocket Man' 

U.S. Congressional defense committees reallocated more than $400 million in funds into missile defense programs in a bid to allay the threat posed by Kim Jong Un's nuclear and military ambitions. The Pentagon has requested nearly $10 billion for the fiscal year that started in October. Boeing Co., Raytheon, and Orbital ATK Inc. are seen as the top beneficiaries of this shift in spending priorities. In testimony before the Senate Armed Services Committee on Tuesday, U.S. Defense Secretary Jim Mattis spoke out in support of Secretary of State Rex Tillerson's diplomatic efforts with North Korea, which had been disparaged by U.S. President Donald Trump. Investors may be already over the threat of escalating tensions on the Korean peninsula, with the SPDR Gold Shares exchange-traded fund seeing its biggest outflow in more than two months on Monday. Chinese tourists don't share those sentiments, though – the number planning to visit South Korea during this week-long national holiday slumped by 70 percent, according to the nation's largest travel website.

Could Be Taxing

Strategists are warning investors that nothing is certain with tax reform after the White House's initial proposal helped reignite risk appetite. Republican leaders are reportedly mulling capping the state and local tax deduction – which primarily benefits constituents in traditionally blue states – rather than than eliminating it entirely. Tennessee Senator Bob Corker said “softness” on ending this deduction raises questions about the party's “intestinal fortitude” – an early sign that tax reform may face the same internal squabbles that imperiled earlier healthcare reform efforts. Kentucky Senator Rand Paul, for his part, also took exception with the Republicans' tax proposal, fearing it would raise taxes on a substantial portion of the American middle class.

RBI to Stand Pat

The Reserve Bank of India is expected to keep its benchmark repurchase rate on hold at 6 percent after higher food prices drove inflation back toward the central bank's target in August. Policy makers may trim their forecasts for economic growth this year as a dearth of investment continues to weigh on activity. On Tuesday, India's finance ministry lowered a tax on fuel in a bid to help tame price pressures. Services purchasing managers' indexes for Australia and Japan in September are also slated for release, as is the Nikkei Singapore whole economy PMI.

Treasury Timidity

Stubbornly low bond yields amid a synchronized global expansion and a Federal Reserve that's set to shrink its balance sheet continue to befuddle some portfolio managers as pessimism toward fixed income builds. Ten-year Treasury yields dipped on Tuesday even as JPMorgan said the share of its clients with a short position in the securities relative to their benchmark stands at 44 percent, the highest level in more than a decade. Investors are once again seeking protection from a pickup in price pressures by way of an inflation-protected Treasury exchange-traded fund. And while equity and foreign exchange volatility grind lower, Treasury volatility is starting to pick up, judging by Bank of America's MOVE Index.

Top Quartet 

The Dow Jones Industrial Average, Nasdaq Composite Index, Russell 2000 Index, and S&P 500 Index all closed at fresh records on Tuesday. Cyclical sectors – tech, industrials, and financials – paced the advance. Shares of automakers also posted strong gains on September sales figures that crushed expectations thanks to vehicle replacements following Hurricane Havey. West Texas Intermediate futures retreated for a second day ahead of Wednesday's weekly U.S. inventory report. The Bloomberg Dollar Spot Index was virtually flat on the day. Nikkei 225 and S&P/ASX 200 equity futures are both trading in positive territory ahead of the open on Wednesday.

What we've been reading

This is what caught our eye over the last 24 hours.

• Ex-Goldman banker (and former 1MDB adviser) Tim Leissner is barred from U.S. securities.
• Bank of Japan's glass ceiling starts to crack.
• Catalonians run Spanish police out of town.
• Buffett may trade some stocks based on Trump's tax plan.
• Australia's internet is slower than Kenya's.
• Justin Trudeau loves this Jay Z-backed sock startup.
• The new Apple Watch, reviewed.

To contact the author of this story: Luke Kawa in New York at lkawa@bloomberg.net.

To contact the editor responsible for this story: Boris Korby at bkorby1@bloomberg.net.