The week began with a seismic shift in policy, as President Trump announced a major overhaul of the H-1B visa system — an employment-based visa previously allocated through an annual lottery. Widely used by leading technology and banking firms, the visa will now carry a cost of $100,000 per applicant, significantly increasing the expense of hiring tech workers and analysts.
The H-1B programme allows businesses to hire foreign workers for highly skilled roles, typically lasting between three and six years. The tech industry relies heavily on H-1B workers, with the current administrative fee around $5,000. Commerce Secretary, Howard Lutnick, was a strong advocate for the programme. When President Trump signed the executive order, he commented: “No longer will these big tech companies train foreign workers. They must pay the government $100,000, then they have to pay the employee. So, it’s just not economic”.
US Federal Reserve Chair, Mr Jerome Powell, spoke on Tuesday about the importance of the central bank “balancing” the risk of sustained high inflation with a weakening jobs market. There is a clear divide among Federal Reserve members, with some remaining cautious about further rate cuts, focusing instead on the lingering impact of Trump’s tariffs, which are still to be assessed. Newly appointed Fed policymaker Stephen Miran has pushed for sharp US interest rate cuts to prevent a collapse in the labour market — a view aligned with that of President Trump, who appointed him to the Fed.
The Fed cut its policy rate by 25 basis points (0.25%) last week, and markets are now pricing in a further three cuts by year-end. There remains an 80% probability of a similar rate cut at the Fed’s next meeting in October.
The theme of “good news is bad news” appears to be firmly back in play, following the revision of US GDP figures for Q2. The US economy grew by 3.8% over the quarter — the fastest pace in two years. This resilience was driven by a surge in artificial intelligence-related investment and stronger-than-expected consumer spending, which rose by 2.5%. US equity markets reversed on the back of the data, with the S&P 500 falling 0.5% and the small-cap index, Russell 2000, down 1%. It’s possible the market does not believe the positive data will continue, given the tariff impact expected in Q4, however, it is more likely the good data makes interest rate cuts less likely. Falling interest rates under a no-recession environment have historically been very supportive of risk assets – Thursday’s data does bring in the question of whether such accommodative policy is required.
In the UK, Jaguar Land Rover (JLR) has extended the closure of several plants until at least 1 October, following a major cyberattack in early September. The company, which operates three factories across the UK, typically produce around 1,000 vehicles per day. With over 33,000 workers currently at home, JLR is estimated to be losing over £50m a day. The shutdown has also severely impacted the wider supply chain, which supports over 100,000 jobs, prompting calls for government intervention.
British investment firm Petershill Partners has become the latest in a growing list of companies announcing plans to delist from the London Stock Exchange. Majority-owned by Goldman Sachs and known for acquiring stakes in hedge funds, Petershill cited dissatisfaction with its share price and valuation, which it believes has failed to reflect the company’s strong financial performance and asset quality. Shares in the company rose by 33% on the news but are still down around 12% since their debut on the stock exchange in 2021.
This was the last full week of September, a month which is typically weak for equities. We have not seen such weakness this year with a range of markets making all-time highs. Commodities have also been strong, with any pull back in the gold and silver prices being well bought and advancing higher.
Nathan Amaning, Investment Analyst
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