US expects Israel to launch ground operation in Lebanon ‘imminently’

Good morning. Today we’re covering:

• China’s historic market rally

• SoftBank’s $500mn investment in OpenAI

• Why women’s safety is key to India’s economy

But first, US officials expect Israel to launch a ground operation in Lebanon “imminently” to clear border areas of Hizbollah infrastructure, in an intensification of its offensive against the militant group.

Israel has discussed the shape of the planned incursion with Washington, which has sought to limit its scope and duration, fearing it could lead to an open-ended occupation of Lebanon’s border area, according to the officials.

“We believe we’ve reached an understanding where instead they will do something more targeted, focused on specific areas — and focused on clearing out Hizbollah infrastructure near Israeli border communities — and then pulling their forces back,” said a US official.

Israel has already conducted small-scale ground operations in Lebanon in recent days, according to officials. It has also continued to launch waves of air strikes on Lebanon, killing more than 1,000 people over the past two weeks, and forcing up to 1mn people from their homes, according to Lebanese authorities.

The planned offensive in Lebanon would be Israel’s first since 2006, when it fought a 34-day war with Hizbollah that ended in a stalemate. Here’s what else to know.

• Go deeper: Israel appears set for a risky land operation that will put Israeli boots on the ground in Hizbollah’s backyard of southern Lebanon.

• ‘Hizbollah is voiceless’: The future is unclear for Lebanon’s most powerful force after the assassination of its leader Hassan Nasrallah.

• Opinion: We are witnessing a substantial shift in the balance of power in the Middle East, writes John Sawers, the former chief of MI6 and UK ambassador to the UN.

Here’s what else I’m keeping tabs on today:

• Japan’s new leader: Shigeru Ishiba will be sworn in as the country’s prime minister. Yesterday Ishiba called a snap election for October 27 in a bid to secure a public mandate after his unexpected victory in last week’s ruling party leadership contest.

• Economic data: South Korea publishes September trade figures and Indonesia reports inflation data for the month. Manufacturing PMI by S&P Global is due for countries across the region including Japan, India and Vietnam.

• China National Day: Financial markets are closed.

• Mexico: Claudia Sheinbaum assumes office as the country’s first female president.

Five more top stories

1. Chinese equities posted their best day since the 2008 global financial crisis yesterday, extending a historic rally triggered by Beijing’s bumper stimulus package. Analysts said the rally “could go a bit further” but called for more details on fiscal stimulus.

2. Masayoshi Son’s SoftBank will invest $500mn into OpenAI as part of a fundraising round that is expected to close this week and value the artificial intelligence start-up at $150bn. The Japanese group will invest via its second Vision Fund, a large vehicle for backing start-ups, which is now mainly made up of Son’s personal wealth, according to two people with knowledge of the deal.

3. Qatar Airways has agreed a deal to buy a 25 per cent stake in Virgin Australia, the country’s second-largest carrier, the latest in a number of international acquisitions by the Gulf airline. The two airlines said in a statement that the deal was part of a wider plan to eventually publicly list Virgin Australia, where Qatar Airways expects to be a cornerstone investor.

4. Federal Reserve chair Jay Powell signalled that the US central bank would consider reverting to its more usual quarter-point cut in November if economic data remained robust. Powell said the Fed’s larger-than-usual half-point reduction earlier this month reflected “growing confidence” in a soft landing for the world’s largest economy.

5. Exclusive: Peter Thiel’s Founders Fund is backing a nuclear start-up aiming to make fuel for the latest generation of reactors. The venture is focused on high-assay, low-enriched uranium for small modular reactors which tech groups hope can meet their power needs as they rapidly build AI-related data centres. Harry Dempsey has more details.

The Big Read

Protests in India over pervasive violence against women have sparked wider questions about the role of female workers in the economy. The nation currently employs only about a third of its women, and Indian politicians agree there is a clear link between women’s safety and their underrepresentation in the workforce. Economists say making women feel safer is one of the most important steps that India could undertake to turbocharge growth.

We’re also reading . . .

• Wall Street’s new titans: Here’s how a handful of secretive businesses including Jane Street and Citadel Securities have seized market share from the old guard.

• Who’s left at OpenAI: With the exit of his chief technology officer, chief executive Sam Altman is now surrounded by allies, consolidating his power at the ChatGPT maker.

• Europe’s far-right march: The FPÖ’s victory suggests it is no longer necessary to detoxify your brand to win, writes Europe editor Ben Hall.

Chart of the day

Stellantis and Aston Martin became the latest European carmakers to issue profit warnings with the industry hammered by competition from cheaper Chinese rivals and weaker demand in its home market. Shares in Stellantis fell 15 per cent in morning trading yesterday following its warning.

Take a break from the news

That weight-loss drugs should have proliferated in a sector that has always venerated thinness will hardly come as a surprise, writes Jo Ellison. So why will no one in the fashion industry talk about Ozempic?

Additional contributions from Gordon Smith and Tee Zhuo