High-skilled immigration policy and the Federal Reserve’s outreach to fintechs set the tone for markets today. A new paper argues that the H-1B lottery squanders economic gains and could be reshaped to favor higher-paid talent. At the same time, Fed governor Christopher Waller signaled a more open approach to payments startups. These developments matter for tech, banks, payments processors and defense names both near term and over longer cycles.

What to watch for the session

Equity markets will likely parse two policy developments that landed this morning. The first is fresh research arguing the H-1B visa regime fails to pick top-tier technical and entrepreneurial talent. The second is a Federal Reserve speech promoting broader access to its payment rails for fintech companies. Both stories affect investor sentiment for tech growth firms and financial infrastructure names.

Traders will also note a calendar cue. Payments rails open Wednesday, October 22, 2025, which places Waller’s comments at the center of an already active payments calendar. Volume in payment processors and fintech proxies may pick up as market participants reassess regulatory access and competitive dynamics.

High-skilled immigration debate and implications for tech and productivity

The headline research from the Aspen Economic Strategy Group highlights a policy mismatch. The H-1B system relies on a lottery. That structure encourages firms to file many applications rather than target only the highest-impact hires.

The paper’s core finding is stark. Replacing a lottery with a compensation-weighted allocation, while keeping visa slots unchanged, could increase the economic benefit of the H-1B program by an estimated 88% over a decade. That figure frames the debate in concrete economic terms and explains why markets paying attention to labor supply for advanced roles may react.

Why it matters now. The research comes as the administration has simultaneously hiked the H-1B application fee dramatically, to $100,000. Regulators and business leaders are weighing fixes that could reshape talent flows into the United States. Short term, this raises uncertainty for companies that hire externally for engineering and research roles. Over the long term, a shift to a compensation-based allocation would favor firms that can attract and pay elite technical talent, potentially lifting productivity in high-value sectors.

The global angle is important. Limits or changes to U.S. access for top international talent have implications for where global R&D and startups cluster. Europe and Asia will watch the policy debate because changes in U.S. openness to high-skilled workers influence where engineers and entrepreneurs decide to locate their ventures and careers.

Waller’s pitch to fintechs and the payments ecosystem

Federal Reserve governor Christopher Waller offered a notable tone change for payments innovation. He described the Fed as welcoming to the decentralized finance community and proposed a compromise model called a skinny master account. The goal is to expand access to the Federal Reserve payment rails while maintaining guardrails on risk.

The skinny master account concept would include caps on size, protections against overdrafts and no access to emergency lending. That is an attempt to open the rails but control systemic exposure. Market participants will parse whether this approach meaningfully lowers the barrier for payments startups to operate at scale without requiring them to partner with traditional correspondent banks.

Near-term market effects could be muted because any operational or regulatory changes will take time to implement. However, the signal is material. Payments startups and technology-focused banks may see their strategic options broaden. Meanwhile traditional banks and large payments processors will reassess competitive positioning if a subset of nonbank firms gain more direct access to core plumbing.

Defense spending and ETF flows to watch

A separate datapoint that should influence sector flows is rising defense budgets. Global defense spending rose 9.4% year over year to $2.7 trillion in 2024. That trend has been a driver for investment products targeting defense and cybersecurity suppliers.

Sponsors and product issuers are positioning for continued capital interest. Global X’s Defense Tech ETF is one such vehicle. The fund is listed as NYSE:SHLD and markets itself to capture investment exposure to advanced military systems and cyber defenses. For traders, the combination of persistent defense budgets and geopolitical considerations supports a sustained bid for stocks tied to defense procurement and related supply chains.

Market movers and session outlook

Expect the session to favor names that stand at the intersection of technology, payments and regulation. Payments infrastructure companies and bank names that provide correspondent services could show early volatility. Fintech startups and firms that could benefit from wider Fed access to payment rails may see speculative interest. Technology names that rely heavily on international engineering hires could trade on any incremental clarity about visa rules and hiring costs following the fee increase.

Fixed income and FX desks will also parse the tone of regulatory openness from the Fed. Waller’s remarks focused on payments policy rather than monetary policy. Still, greater clarity on who can access central bank services reduces an operational risk premium for some private market participants and could slightly alter funding dynamics for small financial firms.

For global markets, the U.S. policy debates matter beyond domestic equities. If the U.S. tightens access for foreign talent, global capital may tilt toward firms headquartered in markets that remain open to skilled migrants. Conversely, a clearer pathway that prioritizes high-compensation talent could reinforce the U.S. as the leading destination for top engineers and founders, supporting long-term innovation-driven growth in American equities.

In sum, the session will be shaped more by policy signals than by macro releases. Short-term moves are likely to concentrate in payments, fintech, and technology names. Over the longer horizon, visa allocation rules and central bank access for nonbank firms could influence productivity trends and market structures across multiple sectors.