War Causes Market Turmoil; Trump Seeks Oil Security

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This conflict continues and there's no sign of let's up from Iran or the US or Israel. The latitude continue to strike Iran heavily and Iran is striking back very intensely against Gulf Arab states. It seems at the moment is if Iran is concentrating most of its... power on those Gulf Arab states rather than Israel, the likes of the UAE, the likes of Saudi Arabia. The sense is very much that Iran is using its drones now, of which it has far more than it does cruise and ballistic missiles to target Gulf Arab states. Bloomberg's Paul Wallace says the State Department has now announced plans to help evacuate Americans who want to leave the Middle East. Well, Nathan, President Trump said the U.S. would provide insurance guarantees and naval escorts to ensure safe passage for oil tankers and other vessels through the Strait of Hormuz. That's not having too much impact on the oil market. Right now, crude is up again. NYMEX crude oil is at $76.61 a barrel. Brent is at $83.80. Meanwhile, the president said he ordered the attack on Iran because he thought Tehran was about to attack first and that Israel did not force his hand to initiate. the air assaults. Trump spoke yesterday at the Oval Office. Based on the way the negotiation was going, I think they were going to attack first. And I didn't want that to happen. So if anything, I might have forced Israel's hand. But Israel was ready and we were ready. President Trump is threatening to cut off all trade with Spain after that country denied the U.S. access to its military bases for the campaign against Iran. The president says he has already instructed Treasury Secretary Scott Bessent to sever the relationship. I told Scott to cut off all. dealings with Spain. They were the only country that in NATO would not agree to go up to 5%. I don't think they wouldn't agree to go up to anything. They wanted to keep it at 2%. And they don't pay the 2%. So we're going to cut off all trade with Spain. A Spanish government officials said that the U.S. must respect international trade agreements and the autonomy of private companies. And more world leaders are speaking out about the war. Karen, Canadian Prime Minister Mark Carney is criticizing the U.S. and Israel for striking Iran without consulting allies or the United Nations. The current conflict is another example of the failure of the international order. Despite decades of UN Security Council resolutions, the work of the International Atomic Energy Agency and a succession of sanctions and diplomatic frameworks Iran's nuclear threat remains. And now, the United States and Israel have acted without engaging the UN or consulting with allies, including Canada. Canadian Prime Minister Mark Carney spoke earlier in Sydney.

And Nathan, in Europe, UK's Chancellor Rachel Reeves says Britain will not make decisions about Iran based on U.S. trade ties. Speaking of Bloomberg, Reeves explained why the government was not taking part in the strikes on Tehran. When it comes to decisions around using British armed forces to take part in conflicts around the world, it is very important that we judge those. on whether it is legal and whether it is the right thing to do. You can't make a decision about whether to get British armed forces involved in a conflict because it may or may not make it more likely to get a trade deal. And Rachel Reeves was speaking of Bloomberg after President Trump criticized Prime Minister Keir Starmer over the UK's limited support. Let's turn to politics now, Karen, back here in the U.S. The results are in from the first primary races in the 26 midterm elections. In Texas, four-term, Republican Senator John Cornyn is headed to a runoff with State Attorney General Ken Paxton. The people of Texas made your voices heard. After all the personal attacks, which there were many, and after all the lies, you listened to what John Cornyn was selling and you weren't buying it. And with 88% of ballots counted, Ken Paxton trails John Cornyn by one percentage point 40.9 to 41.9%. Republican Congressman Wesley Hunt received 13.4% of the votes denying either candidate a majority. That means John Cornyn and Ken Paxton will face off again in May. Well, Nathan, in the closely watched Democratic Senate primary, state representative James Talarico defeated Congresswoman Jasmine Crockett, 53.1 to 45.6 percent. But the vote was marked by confusion in Jasmine Crockett's home base of Dallas County. Voters there and in at least one other county reported being turned away from polling places due to a rule change that required them to vote at their local precinct. In past elections, they could vote anywhere in the county. A judge extended the vote. by two hours, but Jasmine Crockett says her heart is broken. We were able to keep the polls open, but I can tell you now that people have been disenfranchised. Congresswoman Jasmine Crockett says the result could hinge on who was or was not allowed to vote in Dallas County. Telerico also blamed Republicans for the rule change and called for voting hours to be extended. In other key races, Karen, Texas Republican Dan Crenshaw is the first incumbent congressman to lose in the midterms. He felt to conservative state lawmakers Steve Toth, 56.3 to 40.2%. Another Republican in Texas, Tony Gonzalez, is headed to a runoff with Gun Rights YouTuber Brandon. Herrera. Gonzalez has faced allegations of an affair with a staffer who later died by suicide. And in North Carolina, a high-profile Senate race is set for November. Former Governor Roy Cooper won the Democratic primary. He will face former Republican National Committee Chairman Michael Whatley in what could be one of the most expensive Senate races in the country.

Nathan, let's turn to the nation's capital now. Homeland Security Secretary, Kristi Noem, defended the immigration crackdown during her testimony before the Senate Judiciary Committee. And Bloomberg's Amy Morris reports from Washington. Kristi Noem faced bipartisan backlash over the immigration crackdown. Republican Senator Thom Tillis called for Noam's resignation, citing allegations that she blocked an inspector general from investigating complaints against DHS. As of today, I'll be informing leadership that I'm putting a hold on any on-block nominations until I get a response. And in two weeks, if I don't get a response, I'm going to deny quorum and markup in as many committees as I can until I get a response. Thom Tillis accused Noam. of trying to hit her immigration detention quotas rather than concentrating on dangerous undocumented immigrants. Noam denied interfering with any investigations. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. There are new developments in the Jeffrey Epstein investigation. The top lawyer at Goldman Sachs, Kathy Rumler says she's accepted an invitation to testify before the House Oversight Committee on April 21st. The Justice Department's files show Rumler accepted tens of thousands of dollars of gifts from the late sex offender. offered advice on protecting his reputation in the years before he died. Romneller announced plans to resign from Goldman last month. Her spokeswoman says she did nothing wrong and did not know about Epstein's crimes. The Oversight Committee is also requesting interviews with six other people, including Microsoft co-founder Bill Gates and Apollo Global Management co-founder Leon Black, the panel's asking for their testimony in May. Let's turn to the markets now, Nathan, and futures, they have turned higher. S&P futures now up a quarter percent, and this is after yesterday's losses on Wall Street. The S&P 500 did fall almost 1% yesterday, but at one point it was down 2.5%. Goldman Sachs Chairman David Solomon says he's been surprised by the, quote, benign reaction in financial markets to the Middle East conflict. He told the Australian Financial Review Business Summit in Sydney, it will take weeks to understand more about the situation. Well, it's been anything but benign in South Korea. Karen, the Kaspi Index there suffered its biggest one-day crash on record, plunging another 12% today following a 7.2% drop yesterday. The sell-off is a reminder of how... Swiftly, market exuberance can turn into anxiety, insatiable demand for memory chips and helped push the cost be up nearly 50% at its peak this year. Nathan Minneapolis Fed President Neil Cashcarry said the war in the Middle East is clouding the picture on interest rates. Speaking at the Bloomberg Invest Conference in New York, Cashcarry says it's too soon to see the inflation impact from the conflict. The labor market is pretty good, a little bit getting softer, but generally speaking, we're around the bands of our dual mandate. And so I felt like policy was in a pretty good place, and we have the luxury of just letting it gradually glide back to neutral. Now we need to see with this new shock, potentially new shock, hitting the global economy, how long is the effect and how big is the effect?

Minneapolis Fed President Neil Cash Carrey had penciled in one interest rate cut this year, but he says the attacks on Iran make him less certain about that. Programming note here now, Karen, as we've just seen this past weekend, markets may close on Friday, but the world... doesn't, and that is why we're bringing you a new live radio and TV show. Bloomberg this weekend looks beyond the daily headlines to the bigger themes driving politics, business, and culture. Join David Gurra, Christina Rafini, and Lisa Mateo for smart conversations and in-depth interviews that help make sense of the week that's been and what comes next. Get Bloomberg this weekend live Saturdays and Sundays from 7 a.m. Eastern on Bloomberg Radio, Bloomberg Television, and the Bloomberg business app. And it's 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, good morning. Good morning, Karen. A federal judge ruled that New York City can continue its congestion pricing program. Judge Lewis Lyman found that the Trump administration's attempt to kill the program was arbitrary and capricious. After the decision, New York Governor Kathy Hochul posted a short video online celebrating the ruling. The state of New York has prevailed and all the attacks that have been unleashed by the Trump administration on congestion pricing. We won again in court. The ruling is a financial win for the Metropolitan Transportation Authority, which can keep operating the program and use its revenue to modernize the transit system. The Trump administration disagrees with the court's decision and is considering an appeal. A Georgia man who gave his teenage son the gun he's accused of using to kill two students and two teachers. at a high school has been convicted of second-degree murder and involuntary manslaughter. Colin Gray also was found guilty Tuesday of all other charges in the September 24th shooting at Appalachy High School northeast of Atlanta. Prosecutors said Gray gave his son access to a gun and ammunition, despite sufficient warning that Colt Gray would harm and endanger other people. New York Mayor Zohran Mamdani and Governor Kathy Hochul unveiled the first neighborhoods to get free daycare for two-year-olds under the two-care programs starting this fall. The first four communities that will receive 2,0002K seats include Washington Heights and the Rockaways. Mayor Zohran Mamdani also responded to a local New York City radio host reference to him as a radical Islam cockroach. I am not ashamed of who I am. I am not ashamed of my faith. I am not ashamed of being the first Muslim mayor in the history of our city. And there's no amount of racism that will change the way in which I lead or the commitment that I hold to each and every New Yorker in the city. Senator Chuck Schumer of New York condemned the radio host comments. In a social media post, Chuck Schumer says it's a disgusting display of bigotry and Islamophobia. Global news 24 hours a day, and whenever you want it with Bloomberg News Now. I'm Michael Barr, and this is Bloomberg, Karen.

Thanks, Michael. Time now for our Bloomberg Sports Update, and for that we bring in John Stash Hour. Thanks, Karen. Four teams ranked in the top 20 in college basketball, all lost. Number nine, Nebraska lost by 20 to UCLA, 10th ranked Texas Tech, beaten by TCU, number 14. Kansas fell to Arizona State and 16th ranked Alabama, beaten by Georgia. Team USA with an exhibition game against the San Francisco Giants, getting ready for the World Baseball Classic. USA won it 15 to 1. Atlanta Braves. outfielder Jerkson ProFar who served an 80 game suspension last year. We'll now survey 162 game suspension for PED violation. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions, buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English, like if the VIX hits 25, buy a put option on the S&P 500, or if my cash balance goes above $20,000, move the excess into my direct index. You approve the workflow and your agent handles the risk. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokred services by Open to the Public Investing Inc. Member Finra and SIPC. Advisory services by Public Advisors LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. Amazon Health AI presents painful thoughts. I can't stop scratching my downtown. Yeah, but I'm not itching to go downtown and tell a receptionist. I'm here to talk about my... Downtown. Some things you'd rather type than say out loud. There's no question too embarrassing for Amazon Health AI. Chat your symptoms and get virtual care 24-7. Health care just got less painful. Discover a spectacular island destination with crystal blue seas, endless sunshine and the cool Bahamian breeze. Bahamara, located in Nassau Bahamas, offers your choice of three luxury hotels, the richly refined Rosewood, the playfully hip SLS, and a stylishly modern Grand Hyatt. With over 45 restaurants, bars, and lounges, Bahamara serves up delicious dining from world-renowned chefs like Daniel Balloud and Marcus Samuelson, nightlife venues like the new John Batisse Jazz Club, and the Caribbean's most luxurious casino. At Bahamar, you'll find every pleasure under the sun and one-of-a-kind experience. for the entire family, like Baja Bay, our 15-acre lush tropical water park, interactive wildlife experiences, including our daily flamingo parade, world-class golf, tennis, spa, and so much more. Visit BajaMar.com today and discover a vacation destination where memories are made for a lifetime. Baja Mar, life spectacular.

Coast to coast on Bloomberg Radio, nationwide on SiriusXM, and around the world on Bloomberg.com and the Bloomberg business app. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager with the war with Iran now into a fifth day. Fighting continues to spread across the Middle East with little sign of let up. President Trump is promising the U.S. will ensure safe passage of oil through the Gulf as Secretary of State Marco Rubio continues to defend the president's decision to attack. The bottom line is this. determined we were not going to get hit first. It's that simple, guys. We are not going to put Americans troops in harm's way. Secretary of State Marco Rubio in Washington. We're joined now by Bloomberg's Middle East breaking news editor Patrick Sykes. And Patrick, if you could just catch us up on some of the latest headlines that have been coming out of the Middle East. Good morning. Morning. Yeah, we saw just a few minutes ago in New York Times reporting that Iran's intelligence ministry had reached out indirectly to the CIA. to talk about potential terms for ending the war. That would be really de-escalatory if it's true. It's slightly surprising place for an offer like that to come from. Obviously, it's been the foreign ministry and Iran's diplomats that have been involved in most of the outreach so far and this temporary leadership council as well. Other than that, I think the main thing is this strike we had a few minutes ago on the Saudi oil refinery. just underlining that the risks are still very high for energy assets in the region and the Gulf countries still very much been pulled into this conflict. With this report of the attack on or the planned attack, at least, on Saudi Arabia's oil refinery, that puts more attention, doesn't it, on President Trump's promises assurances that the U.S. would be able to provide safe passage of oil through the Gulf, through an insurance program. How would that work exactly? I think that's a big question for many still in the industry. In theory, it sounds great, right? We'll handle the insurance, which is exactly what's gone up in price because of these events. And we'll escort you militarily with our naval assets in the region. I think the practicalities around the insurance are still very much to be clarified. And on the escort side, you know, that might provide some peace of mind. I think for many, even that, wouldn't it be enough. And the other thing is that you're still looking at a serious drop in volume of transits if that's happening because, you know, they're only going to be able to do those controlled naval transits at a very steady pace with all the kind of precautions that they involve. So it's still not going to be anything like a return to normal. You mentioned the headline from the New York Times about apparent outreach from Iran's spy agencies looking for a possible off-ramp for this war within the first day or so. Who would be providing that off-ramp, given that Israel has been targeting the very room where experts are trying to name a new supreme leader?

Indeed, and I think the intelligence ministry itself has also been targeted. I mean, I think at a time like this, when the US-Israeli strategy has kind of been to try and split up the Iranian state and break down those chains of command, it does remain to be seen kind of how authoritative any offer like that would be. They're obviously hoping, we assume, for a kind of pliant. constituency within Iran that would be willing to, you know, make a deal, end the war and resolve all of those contentious issues from nuclear to missiles that have brought us to this point. But as we've seen from the rhetoric and obviously the missiles that are still flying, there's still plenty of officials in Iran that clearly think they can win this war, they can at least last out the US will to continue it. And for them, it's an existential moment. Thank you for this once again, Patrick. Appreciate the update. That is Patrick Sykes, Middle East breaking news editor for Bloomberg News with us this morning from Istanbul. I want to turn now to domestic politics because we've had the kickoff of midterm election season with key primary races in Texas, North Carolina, Arkansas as well. One of the big ones for four-term Republican Senator John Cornyn is headed to a runoff with State Attorney General Ken Paxton. For more, let's bring in Bloomberg News editor-at-large, Marty Shanker. And Marty, I think we knew this was going to be a hotly contested race. What does this result tell us about what we can expect in November? Good morning. I don't know what you can say about November, but what we can say is that it's going to be one of the more expensive Senate runoffs in history. John Cornyn already spent $70 million to fend off Ken Paxton, and he just eked out a very narrow win but still faces a runoff 80 days from now. likely to be acrimonious and of national importance. As it already has been, did the other candidate in this race, the other main candidate, Wesley Hunt, play spoiler here, or does this point to a bigger vulnerability for the incumbent? Well, he definitely... drew over 12% of the vote, which prevented either one of the other two candidates from getting the 50% needed to get the nomination itself. So he did play spoiler, but he won't be there for the runoff in May. So it will be a Ken Paxton-Cornan race, and it's likely to be extremely nasty. And whoever does come out of that race is going to face James Talarico, an upstart on the Democratic side, fending off Jasmine Crockett. That kind of ended a bit acrimoniously as well, didn't it?

Yeah, although not nearly as much as the Republicans, and don't forget that Donald Trump did not endorse a candidate on the Republican side. On the Democratic side, there were voting difficulties because they changed the rules at the last minute, and many Democratic voters were turned away from the polling booths, and it... It'll be interested to see whether Jasmine Crockett makes that an issue or whether she just, for the sake of unity, endorses Telerico and the Democrats can move on against a race against what they hope is a weaker Ken Paxton. Does this point to an issue that could crop up again in November, this rule change? Absolutely could. And it's not just in Texas. The redistricting efforts in a variety of states could cause some confusion at the polling place. But at the same time, the turnout in Texas and in South Carolina was extremely encouraging for Democrats. There was huge lines. Voters seemed very motivated, and that's probably a positive sign for the Democrats. 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 991 in Washington, Bloomberg 929 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. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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