Record Fuel Prices Threaten Higher Food and Freight Costs

0:00This podcast is brought to you by ReliahQuest. Cyber criminals are constantly attacking. They want your data, they want your identity, they want your innovation. ReliahQuest fortifies your business with agenteic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliahQuest, agenteic defense for the enterprise. Learn more at ReliahQuest.com that's R-E-L-I-A-Q-U-E-S-T. .com. Oil closes in on $100 a barrel as energy price anxiety mounts. Plus Canada ups the ante in its trade spat with the US as reciprocal tariffs kick in. And Germany's far-right AFD party delivers a jolt to the country's political system. If the AFD manages to form a government and rule the state, it would be the first government led by a far-right party in Germany since the end of World War II.

1:01It's Tuesday, September 8th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Stock markets are slipping today as higher oil prices drag on investor sentiment. Brent Crude is trading just below $100 a barrel as supply disruptions in the Middle East and Russia continued to push up fuel costs. Yesterday, diesel and gasoline prices hit fresh Labor Day records, and its commodities reporter Julia Petroni explains the spike hasn't topped out yet. Analyst are telling me that prices could rise even faster as we head into the fall. And the reason is that across the Northern Amosphere, farmers are in harvest season, a time when they use large amount of diesel to power tractors and other machinery. And at the same time, colder weather means demand for heating fuel is likely to rise. On top of all of this, refineries typically carry out

2:03seasonal maintenance in the fall. That means some processing capacity will temporarily be offline, just as demand for diesel and other fuels is picking up. With real economic consequences likely to fall. Diesel plays a huge role in the global economy. It powers the trucks that move our food and everyday products, including groceries, clothes, and furniture. But also the heavy machinery you see on construction sites and even ships carrying cargo across the world. And it's not just about transportation. Diesel is also widely used for heating, making it an important part of how homes, businesses, and industries keep running. So if that supply crouched less for a while, the effects can spread through the wider economy. Copper prices are also hitting fresh records with buyers scrambling for the metal amid concerns over mine supply and the prospect of potential U.S. tariffs. The bronze metal is also part of the AI trade, as it's used widely in power grids,

3:03data centers, EVs, and other energy infrastructure. Copper prices have gained 16% so far this year. Well speaking of trade levies, Canada's retaliatory tariffs are taking effect today, hitting $20 billion in American goods. Effective products include steel, aluminum, cheese, and clothing. At rates of 15, 25, or 50%, which Canada says match Washington's tariffs. Prime Minister Mark Carney says the fight is necessary because U.S. demands would hollow out key Canadian industries. We don't want to make gains in the short term that then are taken away a few months later or a year later from that. That's not fair to our workers or our companies or our communities. So that's part of the reason why the deal wasn't good enough was in the forest product sector specifically. Yesterday President Trump threatened to ban the sale of aircraft from Canada's Bombardier, unless they manufacture their planes in the United States. Accidents investigators are probing whether an Amazon cargo plane

4:06that crashed in Miami on Sunday, killing five people on the ground, may have approached the airport too fast and should have performed a routine go-around maneuver to redo its landing attempt. The Boeing 767 hit a pair of vehicles before coming to rest 1,300 feet past Miami's runway 30, which wasn't equipped with crushable material that's designed to help planes come to a quick stop. While FAA and airport officials said a so-called E-MAS system wasn't needed on the runway, National Transportation Safety Board Chairwoman Jennifer Hammondi said that investigators would be looking into the effect that it might have had. The questions are on E-MAS and whether that would have helped prevent this tragedy and should the E-MAS be everywhere at every airport that will be a key part of our investigation. Miami Airport spokesman said the facility has consistently met federal safety requirements and would evaluate any future safety recommendations. And Belgian authorities have arrested a Chinese citizen

5:08suspected of stealing advanced microchip technology and passing trade secrets to a Chinese company. Officials said the arrest was made just before the suspect was set to fly to Beijing in May, and highlights growing European fears of Beijing's trade practices and its quest for industrial secrets. European intelligence agencies have warned that Chinese entities target Western researchers and companies and policymakers are considering new economic security measures to address concerns about China. Representatives from China's Embassy to Belgium and its EU mission didn't immediately respond to requests for comment. It's the first trading day after Labor Day weekend and investors are preparing for another wave of large IPOs. Leading the pack is Aura, which is filed to go public at an expected valuation of over $11 billion. And the smart ringmaker listed a surprise underwriter Robin Hood markets. Wall Street giants such as Goldman Sachs, Morgan Stanley and JP Morgan are the lead bookrunners on the deal

6:11and retail brokerage Robin Hood is listed 18th and last, but it's still a win, as working as an underwriter should give Robin Hood more influence over the number of shares ultimately set aside for its customers. French startup MiStraw AI is also raising cash, securing a nearly $3.5 billion infusion from the likes of Samsung Electronics pushing its valuation above $24 billion, despite being supported by major backers, including BlackRock and Advent. MiStraw's valuation still lags far behind its US rifles. And Jaguar Land Rover is planning to cut roughly 9% of its workforce in response to US tariffs and intensifying British competition. The British automaker is aiming to save the equivalent of $2.3 billion over two years. The news comes as other European car makers struggle, as we reported last week, Volkswagen now plans to have its model portfolio and eliminate 100,000 jobs. Coming up a right-wing surge in Germany sets up the AFD

7:13to reorient the country's politics in ways not seen since the end of World War II. That's after the break. When you're ready to take AI further, faster, your infrastructure should be ready too. Spectrum business delivers the network and the tools to help you expand at the rate innovation demands. Learn about the Spectrum AI Accelerator at Spectrum.com-AI. Let's turn to Germany now where the country's far-right political party, the alternative for Germany or AFD, scored a historic regional election victory on Sunday that could reshape the country's political system. The AFD's agenda includes speeding up the deportation of undocumented migrants, increasing welfare benefits for native-born Germans, ending sanctions on Russia and germinate to Ukraine and pulling the country out of the EU. And now, our Berlin-Bierr-Chief Bertrand-Bennoy

8:14told me that Sunday's results put the populist party within reach of forming a state government in Saxony and Holt. If the AFD manages to form a government and rule the state, it would be the first government led by a far-right party in Germany since the end of World War II. And then it's also politically relevant for today because it is a massive setback. And if you like vote of no confidence for the government of British Mers, which is probably one of the most unpopular there has been in this country also since the end of the war. He has been unable to do most of what he's campaigned for. And that's because his party wasn't able to rule on its own or with a political ally, but had to form a government. He had to form a government with the Central AF Social Democrats who don't see eye to eye on many of these points and everything has been a compromise. So he stayed quite behind his promises and that's alienated, especially score voters.

9:16And Bertrand, this also exposes one of the weaknesses of what's called the firewall in Germany. No, this decade's old strategy in which a number of disparate political parties band together to try and keep the far-right out of power. The firewall in Germany has worked in the sense that all of the parties to the left of the far-right AFD had an informal agreement not to govern with it. Not just not to govern with it, but also not to vote with it on any policy proposal. And so the AFD has been completely ostracized. To be fair, if your goal is to prevent the AFD from governing, it's a strategy that's worked really well. The AFD has been very popular for some time. And for a few years now, it's been the most popular party in Germany. And it hasn't come anywhere in the power. Bertrand, you report that one response that we could see here from the chancellor and the C.D.U. would be to allow its party members at the local level to vote with the AFD.

10:19Explain the logic of that. Is that so that moderate conservatives could basically tell voters, hey, we get it. We hear you. Because right now, the C.D.U. is struggling to make the case that when they're in power, they can actually govern conservatively. Yes, you have a strange situation where you have a big chunk of the electorate voting for the AFD, and then the next big chunk of the electorate still votes for the C.D.U. But both count governs. So what happens is that you have a big majority of voters voting to the right of the center. But the C.D.U. in order to govern has to make alliances with center-left parties. And so it is never in a position to implement its conservative agenda. And that's been a massive source of frustration for voters. And it's been costing the C.D.U. more and more and more votes. And so it has become a bit of a political debt end for the party. And the AFD can credibly say that, right? And the AFD has been saying, if you vote for the C.D.U.

11:19you're going to get a left-wing government, and there is some truth to that. That was the journal's Berlin-Bierreachie Bertrand Benoit. And that's it for what's news for this Tuesday morning. Today's show was produced by Hadi Moyer, our supervising producer, his Sandra Killhoff. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a news show. And until then, thanks for listening. What's driving the markets this week? What's on investor's minds is they look ahead. Find out on the markets podcast from Goldman Sachs. A breakdown of market moves and macro signals in 10 minutes or less. The markets podcast from Goldman Sachs. Listen now.