Global markets have shrugged off a barrage of shocks in recent years, but HSBC sees several developments that could eventually end that streak.

The key risks include higher corporate taxes, a renewed rise in private-sector debt and a shift in the relationship between stocks and bonds. A withdrawal of perceived central-bank support for markets could also test that resilience, the bank said in a note Monday.

While the “removal of central bank puts” could have an adverse impact, HSBC said, such a scenario is difficult to imagine, particularly in the U.S. where equities, wealth effects and financial conditions have become quite intertwined.

Given the outsized weight of the U.S. in global equities and credit, the greatest risks lie there, HSBC said. Higher corporate taxes that squeeze profitability could weigh on markets, while inflation falling close to or below target could restore the negative stock-bond correlation — rise in bond prices when stocks fall.

That, in turn, could encourage investors to reduce equity allocations and put pressure on valuations.

A renewed rise in private-sector leverage could also make the economy and markets more vulnerable to shocks, although HSBC noted that it is at multi-decade lows.

The risks stand out because markets have proven remarkably resilient to bad news in recent years, from surging inflation and tariffs to geopolitical conflicts, the unwinding of carry trades and private-credit concerns.

“It seems as if risk assets continue to ignore every negative catalyst,” HSBC strategists wrote.

The strategists described markets as “Teflon,” arguing that risk assets have remained remarkably resilient despite a long list of potential negative triggers over the past five years.

Deutsche Bank has also questioned how long that endurance can last. The bank said in a report Monday that risk assets have remained “consistently resilient” despite rising real rates and mounting inflation pressures, helped by surprisingly strong global growth.

“The current equilibrium is unsustainable … Risk assets like equities and credit are still strikingly complacent against the stagflationary shock that’s increasingly being priced into rates markets,” Deutsche Bank said.

Rates markets are still pricing only limited central-bank tightening despite mounting inflation pressures, while equities and credit are assuming higher yields will not materially damage growth, it said.

Behind market’s resilience

One key factor is the strength of corporate earnings and economic growth, particularly in the U.S., where consensus estimates have repeatedly underestimated earnings. That resilience has extended beyond technology and artificial intelligence, HSBC said, while U.S. corporate tax rates remain near multi-decade lows.

Another factor is the changing relationship between stocks and bonds. With government bonds no longer providing the same diversification against equity risk as they once did,…

Hello, this is Justina Lee writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

U.S.-Canada trade relations continue to be under strain, with U.S. President Donald Trump on Monday saying that Canadian airplane maker Bombardier must build its products locally in order to keep selling to the American market.

The European Union, meanwhile, is strengthening its ties with Greenland with a fresh boost in the form of a 200-million-euro funding package, amid Trump’s annexation drive for the self-governing Danish territory.

The hostile trade war between Washington and Ottawa continues to bubble and brew, after Trump said that Canada’s Bombardier must manufacture in the U.S. to retain access to the American market.

“NO MORE SELLING BOMBARDIER IN THE UNITED STATES!” Trump wrote on Truth Social. “If they want our Market, they must build here, and stop treating America like a ‘piggybank.'”

U.S. relations with its traditional allies in Europe aren’t doing too good either.

The European Union is seeking to shore up Arctic ties with the Greenland amid Trump’s continued fixation on the territory, which became a major trans-Atlantic issue at the start of the year.

European Commission President Ursula von der Leyen announced a fresh funding boost for Greenland with a 200-million-euro ($232.3 million) funding package, which would focus on connectivity, clean energy and critical raw materials.

Speaking of energy: oil prices extended gains Tuesday, after rising to a six-week high the day before, as tensions in the Middle East continued to escalate with the U.S. and Iran trading strikes over the weekend.

In the markets, U.S. futures were broadly lower, with investors continuing to keep a close eye on Mideast developments. Stock markets in Asia were mixed Tuesday.

The German rocket maker and SpaceX rival Isar Aerospace is looking to increase launches to meet what it claims to be “booming demand.” Chief Commercial Officer Stella Guillen told CNBC that its commercial pipeline exceeds 10 billion euros.

The company successfully reached orbit for the first time over the weekend, marking a significant achievement for the commercial space industry in Europe.

—Justina Lee

Gasoline prices, over $4 per gallon, hit record high for Labor Day

A late-summer surge in gasoline prices means drivers are paying more at the pump than they ever have on Labor Day.

And, since the holiday weekend is one of the busiest travel weekends of the year, according to rental car company Hertz, that means road trips may be more expensive than usual.

The national average for a gallon of regular unleaded gas was $4.15 on Monday, a record high for the holiday, according to AAA.

The price has never been above $4 per gallon on Labor Day,…

Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

The conflict in the Middle East continues to extend, with no diplomatic breakthrough in sight.

Energy Secretary Chris Wright said Sunday that there may be no nuclear agreement with Tehran. If Iran attempts to rebuild its nuclear capabilities, he suggested, the U.S. may simply have to destroy them again.

That is not good news for a world suffering the consequences of a war most countries had little to do with.

The Iran conflict and Ukrainian attacks on Russian refineries have seen oil prices rise in global markets, with U.S. consumers seeing record diesel prices.

However, comments from Wright suggest those promises may be increasingly difficult to be kept, as he suggested the U.S. may not reach a nuclear deal with Iran.

When asked if the U.S. will continue striking Iran when it attempts to rebuild its nuclear infrastructure, the energy secretary said, “You have to destroy their capabilities to do it.”

“We are degrading their capacity to develop nuclear weapons and ultimately to deliver them if they develop them,” he added.

The statements seem to contradict claims made by Trump administration officials earlier in the conflict, when Defense Secretary Pete Hegseth said that the conflict would not lead to a forever war, and President Donald Trump calling it a “little excursion.”

Now, that “little excursion” is beginning to look increasingly like a quagmire.

On Saturday, U.S. forces hit three Iranian crude oil carriers after the Islamic Revolutionary Guard Corps launched ballistic missiles toward two Navy warships in the region, the U.S. Central Command said.

With few signs of progress on Iran, the Trump administration has turned its attention to the other conflict that has been raging on for years now.

Over the weekend, U.S. peace envoys Jared Kushner and Steve Witkoff travelled to Moscow and Kyiv in an effort to help end the Russia-Ukraine conflict, although no immediate breakthrough was seen.

Kyiv, meanwhile, struck a Russian refinery, further pressuring oil markets.

Oil prices continue to stay elevated, and now diesel prices hit a record high in the U.S. Truckers in the U.S. are paying an average of $5.85 a gallon nationwide, a nearly 60% increase over the same period last year when diesel cost $3.71 a gallon.

John Kilduff, partner at energy hedge fund Again Capital, told CNBC that higher diesel prices will impact Americans whether or not they drive. “You can do all the virtual shopping you want, it’s all going to come to your house on a truck that ran on diesel fuel so there’s no way around it.”

Greater political stability under Prime Minister Giorgia Meloni’s government has boosted Italy’s appeal in the eyes of international investors, but the country’s former leaders say more needs to be done.

Speaking to CNBC on Friday, two former prime ministers of Italy said reform is necessary to boost the Mediterranean country’s stuttering economy.

On Friday evening, Meloni’s coalition government, which took office in October 2022, held a rally in the port city of Bari to mark its becoming Italy’s longest-serving cabinet since World War II.

“In these years we have worked to increase employment, reduce unemployment, support families and businesses, strengthen security, manage public finances with seriousness, and restore to Italy weight and credibility on the international stage,” Meloni said in a translated statement on Friday.

Italy’s economy grew by 0.5% over the course of 2025, below the euro area average of 1.5% and one of the slowest rates in the bloc. The Italian employment rate remains solid, but youth unemployment stood at 18.9% in July, above the euro area average of 14.9%.

“This, of course, is a failure,” Gentiloni said. “In the last two or three years, we see the [spending] power of families going down, and this is a reason for the government not to be so satisfied as it’s looked.”

U.S. Treasury Secretary Scott Bessent praised the European Union for formally joining “Operation Economic Outcast,” the U.S.-led sanctions campaign aimed at severing Tehran from the global financial system, as Washington widens its war to include economic pressure.

“We appreciate their strong and early stance,” Bessent said in a social media post Thursday evening stateside. “The world is sending a clear message to the Iranian regime: We will not stop until every remaining financial lifeline has been severed,” he added.

The comments came after Brussels, in a statement on Aug. 31, said it supported efforts aimed at stopping the “destabilizing activities” by Tehran and resuming peace talks, including through Operation Economic Outcast, to apply additional economic pressure against the Islamic regime.

The bloc’s endorsement came as the Group of 20 finance ministers and central bank governors gathered in Asheville, North Carolina, earlier this week.

“The United States stands firm with our allies in ensuring the murderous Iranian regime cannot exploit the global financial system to fund its nuclear ambitions, weapons programs, and terror proxies,” Bessent said in the Thursday post.

The Trump administration launched the “Operation Economic Outcast” campaign in late August, targeting Iran’s access to digital assets, advanced technology procurement, gold reserves, commercial aviation and shipping.

Iran’s foreign ministry spokesperson Esmail Baghaei pushed back against the EU’s move to endorse what he called Washington’s “economic terrorism.” Baghaei blasted in a post on Sept. 1 that the bloc had “surrendered its sovereignty, its laws and regulations, values and ethics to U.S. coercion.”

Bessent cast the campaign as an “economic onslaught” against Iran’s global financial connections, warning that countries aiding Tehran should “expect to share in the isolation of a withering regime.” China was the largest trading partner for Iran, buying around 90% of Iran’s sanctioned crude exports before the war.

The EU has separately maintained its own sanctions regime targeting Iran’s nuclear and ballistic missile programs and its military support for Russia.

Bessent had signaled ahead of the summit that he intended to press G20 counterparts to cut financial ties with Tehran, or face secondary sanctions. He also indicated new secondary sanctions each week with an initial focus on banks, warning to cut off institutions that facilitate Iran-related transactions entirely from the dollar-based financial system.

The U.S. military carried out a new wave of strikes earlier this week, hitting military targets in Iran in retaliation for attacks…

Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.

Abraham Lincoln warned that “a house divided against itself cannot stand.” On interest rates, Washington is indeed divided.

Federal Reserve Chair Kevin Warsh has signaled that a rate hike could be on the table. Governor Christopher Waller says rates could remain unchanged if inflation continues to cool. Vice President JD Vance wants them lowered.

Given that, markets are in guessing mode on which option the Fed will circle in later this month.

U.S. markets rallied Thursday, following signals from Waller that he would support holding rates if inflation data came in as expected.

The S&P 500 posted back-to-back gains, while the benchmark 10-year Treasury note yield fell to 4.77%. On Wednesday, the yield hit its highest level since November 2023.

The probability that the Fed would raise rates at its September meeting is down to 50.2%, according to the CME FedWatch tool, from 63.2% on Wednesday.

Waller, in a Reuters interview, expressed confidence in current inflation trends, saying that impacts from tariffs and higher energy prices did not really affect the economy.

While he said inflation was “meaningfully above” the Fed’s 2% target, he noted that recent trends “suggest we are finally seeing some signs of disinflation.”

Vice President JD Vance went even further, asking the Fed to lower rates so as to make homes more affordable.

“We believe that the Fed should be lowering interest rates,” he said, calling it the “proper and responsible” response to recent U.S. inflation data and reinforcing calls from President Donald Trump.

All these stand in stark contrast to Fed Chair Kevin Warsh, who signaled at the Jackson Hole symposium last week that he would raise rates in order to address persistently high inflation.

Carney fires back

Away from the markets, the U.S.-Canada trade spat started up again, with Canadian Prime Minister Mark Carney responding to claims by U.S. Commerce Secretary Howard Lutnick that Ottawa had scuppered trade talks with the U.S. for political purposes.

“I don’t think, with all respect, appointed, unelected Cabinet members in the United States are experts on Canadian politics,” Carney said, adding that his administration will always stand up for Canada’s best interests.

But the prime minister maintained that a deal benefiting both Canada and the U.S. was possible. “We’re ready to sit down and strike that deal when the Americans are ready,” he said.

Lululemon stock tanks

While influencers all over social media may be sporting Lululemon’s products, it appears to not have been enough to save the company from a quarter of…