In today’s CEO Daily: Diane Brady on what CEOs are saying about the immigration crackdown.
The big story: Hamas has begun releasing hostages to Israel.
The markets: U.S. futures are strongly up, premarket.
Plus: All the news and watercooler chat from Fortune.

Good morning from Washington, where we are about to commence the Fortune Most Powerful Women Summit. You can read more about our headliners here and join us via livestream. When I speak with IMF Managing Director Kristalina Georgieva this afternoon, I’ll be curious to hear not only her prognosis for the economic landscape but also her reflections on leading an organization devoted to globalization in a world that’s putting up walls.

While we all wait to see what’s next on tariffs, the shutdown, the Gaza ceasefire, and more, let’s consider the business impact of a policy that remains unchanged: the immigration crackdown. As an “essential” service, Immigration and Customs Enforcement (ICE) is largely unaffected by the shutdown and its deportations are unlikely to cease any time soon. This past week, several CEOs privately shared the impact that they’re already seeing in their businesses.

Fewer Customers. From the travel operator who told me the immigration crackdown is “much, much worse” for their business than tariffs to the manufacturer who said sales of their products are down by double digits in some southern states, concern about immigration action is causing some people to stay away or stay home. South Korea’s LG and other foreign firms have put limits on business travel to the U.S. after workers on temporary visas were detained earlier this year. The number of international students arriving in the U.S. in August fell 19% over last year, which means billions less in spending.

Less Productivity. This manifests itself in several ways. There is the obvious challenge in terms of the shortfall of workers in industries like agriculture, which could soon lead to food shortages and higher prices, according to the Labor Department. But companies that don’t have an issue with undocumented workers are facing the friction of having employees pulled aside by ICE officials. One CEO told me that these status checks are costing his company millions in delays and lost productivity.

More Fear. A cousin who is legally working in the U.S. told me that he’s reluctant to travel, even domestically, for fear that ICE officials might find something amiss with his paperwork. I thought he was being paranoid until a financial services executive told me last week that he’s seeing employees who are working here on visas act in a similar way. What’s more, he added, “some of our foreign-born customers are worried about being cut off from their bank accounts or credit cards.” Assurances don’t help: “They know we’re as much in the dark as they are.”

What about the argument that ICE raids will create jobs for American workers? “Maybe some day,” this executive said, “but right now, the disruption is hurting everyone.”

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top news

Hamas began releasing hostages to Israel

Twenty living hostages are set to be released from Gaza today along with the corpses of others that Hamas kept throughout the war. President Trump is in Jerusalem today and is set to address the Israeli parliament. Live coverage from the BBC here.

Trump again threatens to send Tomahawks to Ukraine

The long-range missiles would allow Kyiv to conduct deep, long-range strikes into Russia. “I might have to speak to Russia about Tomahawks. Do they want to have Tomahawks going in their direction? I don't think so. I told that to President Zelensky, because Tomahawks are a new step of aggression. I might talk to [Putin]," Trump said, according to Axios. "I might say, 'Look, if this war is not gonna get settled I may send them Tomahawks.' Russia doesn't need that. I think it is appropriate to bring that up.”

Poland prepares for war with Russia

Poland, increasingly annoyed by Russian aggression in Ukraine and by Moscow flying military drones in its airspace, is bidding to become the NATO country with the largest military in Europe. It spends 4.7% of its GDP on defense and is the biggest buyer of U.S. arms. “This is our war,” Polish Prime Minister Donald Tusk has said. “We decided to arm Poland and modernize the Polish army on a massive scale.”

Trump and Vance soften their tone on China

After ramping up the trade war rhetoric on Friday—threatening new, 100% tariffs on China in response to China’s export controls on rare earth materials—the White House signaled it was ready to talk over the weekend. Vice President JD Vance said the U.S. was “willing to be reasonable,” and Trump posted on Truth Social, “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”

Former White House advisor rings alarm on China’s rare earth export controls

Former White House advisor Dean Ball warned that China’s new controls on rare earth exports “gives it the power to forbid any country on Earth from participating in the modern economy” in an X post over the weekend. Ball, who served as a senior advisor in the White House Office of Science and Technology Policy earlier this year, also noted that “they can do this because they diligently built industrial capacity no one else had the fortitude to build.”

Tariff-related stimulus checks “could kind of be a weird feedback loop”

National Business Capital analyst Chris Motola told Fortune that tariff-related stimulus checks sent for Americans proposed by President Donald Trump “could kind of be a weird feedback loop where the tariff stimulus justifies passing on more tariff costs.” That’s unless this month’s inflation or jobs reports point in the right direction, in which case the checks could “start looking a lot better and less inflationary.”

The new search browser war

The emergence of AI-powered search engines such as Google’s Gemini and Perplexity is reminiscent of the search browser wars of the late 1990s. This time around, the winner will be the platform that integrates AI features seamlessly without jeopardizing privacy.

The markets

S&P 500 futures were up 1.37% this morning. The index closed down 2.71% in its last session. STOXX Europe 600 was up 0.46% in early trading. The U.K.’s FTSE 100 was up 0.2% in early trading. Japan’s Nikkei 225 was down 1.01%. China’s CSI 300 was down 0.5%. The South Korea KOSPI was down 0.72%. India’s Nifty 50 was down 0.28% before the end of the session. Bitcoin was down to $115.4K.

Around the watercooler

Ben Horowitz and Raghu Raghuram on AI, politics, and the questions they don’t have easy answers to by Allie Garfinkle

U.S. troops are going to Israel to support the Gaza ceasefire, but JD Vance vows no ‘boots on the ground’ by Jason Ma

Gen Z coder rejected by the Ivy League despite founding a $30 million app says college is ‘not worth it for most people’ by Jessica Coacci

Adobe exec says the $141 billion software giant embraces candidates who use AI to apply for jobs—because they’re the people ‘creating the future’ by Emma Burleigh

CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.

The immigration crackdown is ‘much, much worse’ for business than tariffs, some CEOs say