US-Iran War Stalled; Diesel Hits Four-Year High

0:00Here are 5 Reasons to Subscribe to Bloomberg News Now. 5. You Get the Latest News From Around the World Instantly 4. It saves you time. Your day's busy. Catching up takes just a few minutes. 3. It's available 24 hours a day whenever you need it. 2. It's Convenient. Listen on your smartphone or smart speaker. 1. It's Easy to Find. Subscribe on Apple Podcasts, Spotify or anywhere you listen. 5. Reasons. Stay on top of the news. Bloomberg News Now. Bloomberg Audio Studios. Podcasts, Radio, News. Good morning. I'm Nathan Hager. And I'm Karen Moskow. Here are the stories we're following today. Karen, we begin this morning with the latest from the Middle East. Iran says it has targeted US bases in the United Arab Emirates and Kuwait this morning that word from state-run media comes after the US carried out a second wave of attacks on Iran's southern coast Tuesday night.

1:00President Trump says the strike's targeted offensive and defensive equipment near the straight of Hormuz. We blew up much more than their radar last night. It was a very heavy attack last night. And we're prepared to do another one and anytime we want. President spoke yesterday from the Oval Office. Now since then, the US has not announced any new attacks. But the Wall Street Journal is reporting that the Pentagon is extending Middle East deployments that could last into next year to maintain a level of 50,000 personnel and give the president flexibility on military options. Well, Nathan, we continue to see an impact on the war in the energy markets. US retail diesel prices have hit the highest level since mid-2022. And that tops a peak seen during the early stages of the Iran war. The National Average Pump Price of Diesel is now just above $5.78 a gallon. Karen, we're learning more about the dispute between the US and China. At this week's G20 Finance Minister Summit that kept the group from issuing a joint communicate, sources tell Bloomberg News the disagreement came down to one word, non-market.

2:01We're told Chinese officials saw the term as a veiled attack on state-owned companies that are a pillar of their economy. Bloomberg's Jill Deesas reports Treasury Secretary Scott Besent focused on China's trade surplus and his statement after the meeting. China had a trade surplus record trade surplus last year of $1.2 trillion again record largest ever. We've seen Besent talk about this multiple times throughout the course of the summit. Bloomberg's Jill Deesas reports China proposed a tweak to the wording that would have addressed trade imbalances without putting a spotlight on its state-owned enterprises. Besent's final statement included a line calling on nations to eliminate non-market policies. Nathan, Chinese President Xi Jinping is in Egypt and he is sharpening his rhetoric in urging Middle Eastern nations to pivot away from the US. During a meeting with Egyptian President Abdel Fata LCC, she said the people in the Middle East should be the masters of their own affairs. In an avial swipe at the US, he also said China would back efforts to reshape the security architecture in the region.

3:03This is the Chinese President's first trip to Egypt in a decade and it comes before he heads to Washington for a highly anticipated summit with President Trump at the end of the month. In New York Karen, Nikolos Maduro is making a new bid to have his criminal case thrown out. Lawyers for the deposed Venezuelan leaders submitted a court filing yesterday arguing that he is immune from prosecution as the head of a sovereign state. Federal prosecutors argue Maduro and others partnered with designated foreign terrorist groups and sought to enrich himself while in office. Maduro and his wife face drug trafficking and conspiracy charges after they were captured in a US military raid on Venezuela in January. They face life in prison if convicted. Trial is set for June of next year. Nathan, the Trump administration's latest attempt to limit birthright citizenship has been blocked in federal court. A judge in Maryland has temporarily blocked an executive order that President Trump issued last month. The order would deny citizenship to children whose parents took part in a commercial transaction to ensure they gave birth in the US.

4:03The judge said the Supreme Court already decided that children in that class are citizens at birth. The Justice Department could now ask a federal appeals court to lift the judge's order and let officials move ahead with the president's plan while the legal fights play out. In Washington, Karen, now that Congress has passed a stopgap funding bill to keep the government open until December 11th, there are more spending bills that need attention. Bloomberg's Amy Morris reports from the nation's capital. Texas Republican Jody Erington chairs the House Budget Committee. He tells Balance of Power he wants to get the defense bill passed but he says the Senate's not cooperating. Unfortunately, I don't know that the will is there. I don't think there's a more important endeavor for us as Congress to deal with than to support the common defense and back our troops. That's after the election. I just hold very little hope out prior to the election at this point that we'll get a return serve from the Senate. But House Republicans are divided between defense hawks who are holding out for billions more in Pentagon funding and deficit hawks who want spending cuts in Washington, Amy Morris Bloomberg radio.

5:07Amy, thank you. We turn to the markets now where futures are higher as they begin a new trading session and shares of snowflake. They are on the rise. They are surging almost 24%. The company is raising its outlook for annual sales, tightening rapid adoption of its AI assisted coding tool. A maker of software that helps organize and analyze corporate data in the clouds. snowflake is weaving artificial intelligence through its platform. We're also watching shares of Broadcom in the pre market care and they're down 2.4%. The chip makers results in forecast were seen as underwhelming. But on the company conference call Broadcom predicted a boom in AI chip sales over the next 2 years. That's helping renew optimism and can challenge and videos dominance in the lucrative market. Kunjian Sabarnie covers Broadcom for Bloomberg intelligence. New term that doesn't seem to be a lot of big upside. Apparently from the company's perspective, we still think they are being conservative and they could get higher than that 115. But nevertheless, what was the key positive was that really high guide of 230 billion for the fiscal 28 from AI revenues.

6:10Just to perspective, the street is close to somewhere around 180 billion dollars there. So that was a real positive. Bloomberg intelligence senior semiconductor analyst Kunjian Sabarnie notes Broadcom's custom AI semiconductor business is thriving. This company is like Google, Open AI and Meta platformers look for ways to supplement their Nvidia made chips with additional supply and variation. Well, staying on the AI theme, Nathan secretary Howard Luckney hosted a series of fireside chats yesterday with big tech industry leaders including Nvidia CEO Jensen Wong. Luckney, you later spoke with the Bloomberg's Joe Matthew and said if chip companies build their factories in the US, they won't pay tariffs. There will be shovels in the crown building it to get us to 40 or 50% production semiconductors. And the idea is very simple and it's been very successful with pharmaceuticals. Build it here and you won't pay a tariff while you're building. But if you're not willing to put shovels in the ground here, then you should pay to the access to the greatest market in the world.

7:13And commerce secretary Howard Luckney made the comments on Bloomberg's balance of power, catch the full conversation on the Bloomberg video hub available on Bloomberg.com and the Bloomberg Business app. And Karen, a month of gradual decline in the Japanese yen has reversed sharply over the past 24 hours. The currency is now up about 1 and a quarter percent against the dollar. Investors are speculating Japan could intervene in the currency market again. Time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr, Michael Goodmourning. Good morning, Karen. A shooting at a downtown Minneapolis apartment building has left three people dead, including the suspect and five others wounded. Authorities say those shot include two Minneapolis police officers who are in stable condition, a third officer suffered injuries into a police chief Bill Peterson. I'm truly sick and by this level of violence. That feeling is tempered only by the courageous actions of the Minneapolis police officers who responded without hesitation.

8:15Keith Peterson says the suspect was known to authorities before the shooting. A deadlocked jury in the trial of Lindsey Clancy will resume deliberations today for a sixth day as the court teeters on the brink of a mistrial. For the second time the jury yesterday told the judge they are deadlocked. The jurors are split over whether the Minneapolis woman was sane when she strangled her or the Massachusetts woman was sane when she strangled her three young children with the defense team claiming she was suffering from postpartum psychosis. Prosecutors alleged the murders were calculated. If the jury deadlocks permanently, the judge will declare a mistrial leaving prosecutors to decide whether to retry Clancy, offer a plea deal or drop the charges. New York City public schools will temporarily ban elementary and middle school students from using artificial intelligence tools during the upcoming school year. Mayor Zoran Mamdani also said high schoolers will get a course in AI literacy. Our job is to give every student the knowledge, the independence and the confidence they need to build a future of their own choosing.

9:25That means safeguarding the teacher student relationship, refusing to surrender our classrooms to profit motives and above all, it means protecting childhood. Mamdani says all grades will be banned from using AI companion chatbots. Global news 24 hours a day and whenever you want it with Bloomberg News Now, Michael Barnes is Bloomberg Karen. Thanks Michael. Time now for our Bloomberg sports update and for that we bring in John Staschauer. Thanks for the NBA came down hard on the Los Angeles Clippers. They ruled that their star player, Koai Leonard, was given outside income that circumvented the salary cap and they took five first round draft picks away from the Clippers. They find the owner Steve Balmer $30 million. Tiger Woods had that DUI in Florida back in March. He struck a plea deal and Tiger will have his license suspended for five years. That's your Bloomberg sports update. Stay with us more from Bloomberg Daybreak coming up after this.

10:25A new chapter in global growth is being written and much of it is happening in Africa. Africa needs to invest. There are deals to be done and business to be won. I'm Jennifer's Abbasajah. Every week on the next Africa podcast, we track capital flows and political shifts shaping the continent's future. The digitalization of Africa is going to power its growth. Reading the world of something like HIV is possible. Opulation growth is so enormous in Africa. Listen to next Africa on Apple Spotify or wherever you get your podcasts. Coast to coast on Bloomberg Radio nationwide on serious XM and around the world on Bloomberg.com and the Bloomberg business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager with tensions in the Middle East still a focus for investors after this week's return to strikes on Iran for the US. The President Trump is predicting the US won't need to keep attacking Tehran for long. We now control the Harmoas straight and we have many boats going through that every day every night.

11:27Many, many boats loaded up with oil. It was President Trump from the White House Rose Garden last night joining us this morning for Mr. and Bull is Bloomberg Middle East breaking news editor Patrick Sykes. So Patrick President Trump is saying this current bombing campaign will be short. Is it looking that way in the region? Good morning. Morning. Yes. So far from the US side at least that is the case. We didn't have any resumption of strikes from the US military in Iran overnight. What we did have however this morning was confirmed Iranian drone and missile attacks against Q8. Iran has also claimed to have attacked the UAE but currently there's no confirmation of that. But I think it just goes to show you know Iran's initial response to the US attacks was described as a retaliation but it was described as an open-ended one and that they would continue until they felt that the aggressor had been sufficiently punished.

12:27Even if the US backs off that doesn't mean that Iran will necessarily fall asleep. And we also heard the President say that the US could attack again anytime and once. What does that suggest about what the strategy can be going forward? I think that goes to show we're in this phase of the conflict where day to day there's a relatively low intensity baseline. But we're expecting to see you know about like we did this week where you know be it in attacks on shipping in the straight of four moves or be it on a strikes on the Iranian mainland. One side or the other lashes out tries to reclaim some kind of leverage or at least just to challenge the narrative of its opponent in order to try and and shore up its position. But currently we're not seeing any any ramp off for either side. They're both sticking firm to those positions. So for the moment is this low intensity with bounce of renewed violence.

13:34Well what do we know at this point about the status of the straight of horror moves at a time where the tracking data seems to show that some oil is still getting through while at the same time we're seeing diesel prices near record levels. And we haven't seen since the early days of the Ukraine war. Yes and it's important to differentiate between crude oil and oil products like diesel gasoline made from that crude right. As for crude it does seem that the US has been in recent weeks getting more and more successful at this these these nighttime operations to move crude tankers through the straight of four moves through the southern route away from Iran's coast closer to a mile. In order to keep some level of supply reaching the market that hasn't been yet the case on the on the products side and at the same time on the products side you've got security situation in the black sea where due to attacks on on ships there.

14:34As part of a completely different conflict you've also got limitations on for example Russia's ability to refine crude into products so too related but distinct markets. And in our last minute here Patrick what about the economic pressure campaign even if we do see an ebb and flow in military activity does it look as though the economic pressure campaign is having an impact at this point. It's it's harder to pin one to the other but it's certainly the case that Iran's economy is suffering inflation is over 80% I think approaching 90. And we know the imports through key hubs like Dubai on which Iran has relied for so long have been severely restricted at the same time understanding. On the Turkish border where I'm based is the products to continue to move so it's not a total airtight seal I think what we should expect is for the US to continue.

15:36Peace by peace to be trying to limit any of those to Iran and that result in this this gradual incremental increase in the pressure deterioration economy. This is Bloomberg Daybreak your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple Spotify or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York Bloomberg in 99.1 in Washington. Bloomberg 92.9 in Boston and nationwide on Sirius XM channel 121. Plus listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News now it's the latest news whenever you want it in five minutes or less. Search Bloomberg News now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow and I'm Nathan Hager.

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