NATO Leaders Tout Defense Spending; US Knocked Out of World Cup

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1:50Good morning. I'm Karen Moscow. And I'm Alexis Christophorus. Here are the stories we're following today. Alexis, thank you. Well, President Trump and NATO leaders are meeting in Turkey for a summit focused on the alliance's future. The two-day gathering is in Ankara, Turkey, and that's where Bloomberg's chief Europe correspondent, Oliver Crook, brings us up to speed on the very latest. Now, this is seen as a sort of follow-up meeting to the really historic NATO meeting last year in the Netherlands, the one in which all NATO members effectively pledged to pay 5 % of their GDP, sort of military defense spending.

2:23And that was really seen as a real unmitigated success of Trump foreign policy. It's something that really nobody in Europe has really fought back against too much. There have been a couple instances for Spain, for example. But again, this was sort of one of the things that you could really notch down in the win column for President Trump. In the 12 months that have ensued since then, there have been some foreign policy actions, which are not so undisputably a success, namely the war in Iran. Obviously, that has caused a great wedge with a number of European allies. And Bloomberg's Oliver Crook says NATO will showcase new military projects worth billions in an effort to convince President Trump that allies are boosting defense spending.

3:01And Karen, the NATO summit comes as tensions are rising in the Middle East. A laden, liquefied natural gas carrier was hit by a projectile near the Omani coast as it exited the Strait of Hormuz. Bloomberg Managing Editor Paul Wallace has more from the Middle East. Iran has said frequently, is essentially said that it doesn't want ships going on that route, that it wants them to take its own approved route further to the north and closer to its own coast, and that no ships must go through without its permission. So it's possible that it fired on these ships because they hadn't sought and got Iranian permission.

3:34It's possible that Iran didn't know the nationality or the precise identity of these ships, that it may not have known they were Qatari. but either way it really speaks to how things are still very tense over hummus. Bloomberg's Paul Wallace says the vessel was owned by Qatar's state-owned shipping company Nacolat. Well we now turn to the world of sports Alexis where the dream of a World Cup for Team USA is over. Bloomberg's John Stashauer joins us with the latest. John good morning. Good morning Karen playing on home soil this U.S. World Cup team won three games that's more than any previous team but the run ended with a decisive 4-1 loss to Belgium.

4:14Tyler Adams called it a disappointing end to an otherwise positive World Cup. I think that was the goal, was to obviously inspire people that the sport was growing in the U.S., which I think we saw. I mean, the support was unbelievable. I think our initial reaction as a team was that in this moment, we let them down. Very quiet game for Fuller and Balligan. after so much was made of his suspension being lifted in the role President Trump played. More on the World Cup coming up in sports. John Stash, our Bloomberg Radio. All right, thanks, John. In other news this morning, President Trump has filed a last-ditch plea with the Supreme Court to stop writer E.

4:52Jean Carroll from collecting$5 million awarded to her by a jury that found the president had sexually abused and defamed her. The Supreme Court previously rejected Trump's appeal, which focused on technical questions involving federal rules of evidence for civil cases, A decision by the high court to reopen the case could delay Carroll's receipt of money. Right now, it's being held in escrow to cover the jury award and interest. Well, Alexis, Maine Democrat Graham Plattner is under pressure from party leaders and allies to end his bid for a Senate seat following a sexual assault allegation he has denied.

5:26Plattner said in a social media video that he would reflect on the best path forward for his campaign after the allegation was published by Politico. Regardless of the inaccuracy of the reporting, but mindful the political reality it will inflict, we are taking the time to reflect on the best path forward for the state that I love, the people that I love, the movement I belong to, and the goal of defeating Susan Collins. Those were the goals when we launched this campaign, and they remain my goals today. Graham Plattner has one week to decide whether to drop out of Maine's Senate race against Republican incumbent Susan Collins.

6:03And we now turn to the markets, Karen, where tech stocks are leading stocks lower around the world. NASDAQ futures down more than 270 points, or about 1%. In Asia, the Kospi in South Korea dropped almost 5%. A blowout earnings report from Samsung Electronics was not enough for investors. The world's biggest memory maker by market value dropped more than 8 % in Seoul. Max Bloxham covers tech stocks for Bloomberg Intelligence. All these stocks have gone up a huge amount this year so far. at some point, you know, there isn't that next leg of momentum. So, wow, these are really things are even better than we thought.

6:39I think the short answer is things are pretty much where we'd expect them to be. Bloomberg Intelligence analyst Max Bloxham says Samsung's quarterly profits surged 19 fold. Alexis, Wall Street appears bullish on SpaceX. At least six brokers, including Goldman Sachs, Morgan Stanley and UBS, have initiated coverage of Elon Musk's rocket company with the equivalent of a buy rating, even though questions remain over its profitability and valuation following last month's blockbuster market debut. Morgan Stanley's price target of$600 is the highest on Wall Street, implying an 87 % gain in the stock price.

7:15The bullish analyst calls come on the same day SpaceX joins the NASDAQ 100. And in deal news, Karen, shares of Krenetics Pharmaceuticals soaring 99%. Vertex Pharmaceuticals has agreed to buy the endocrinology-focused biotech company for$10 billion. The purchase price of$85 a share is a 102 percent premium over where Krenetic shares closed yesterday. In Europe, shares of Shell are up 3 percent. The London-based energy giant said oil trading profits were in line with a strong first quarter, while gas trading results were, quote, significantly higher. The Iran war has led to a profit bonanza for the world's top energy companies as the conflict caused unprecedented a disruption to oil and gas supplies.

7:59Time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Alexis. Flash flooding inundated parts of the Midwest and Northeast. In Camden County, New Jersey, floodwaters submerged vehicles and closed roads. One driver had to abandon his car. This woman saw it happen. Car just came down the road and We're telling him, we're waving him. We're like, hey, don't go, don't go. It's flooding. But he couldn't hear. And then his engine seized up and his car just turned off. Everything started flashing.

8:28In Monmouth County, New Jersey, a roof partially collapsed at BJ's Wholesale Club. Fortunately, no injuries were reported. The roof collapsed under the weight of standing water and debris. What is in store for today? Here's Bloomberg meteorologist Craig Allen. The weather pattern here in the Mid-Atlantic and the Northeast is going to be quieting down now As we move into the middle of the week, the extreme heat, we know that's over, but we're not completely done with additional showers and thunderstorms. Now, yesterday, parts of the New York City tri-state region were inundated with two to as much as six inches of flooding rains.

9:05Showers today will be of less duration, less intensity, less coverage. A handful of thunderstorms, though, could pop up around Washington and New York City. Boston may have to endure showers with a little more frequency for today. And it could result in local flooding. But for all of us, a drier, warm Wednesday is on tap. Bloomberg meteorologist Craig Allen. Meanwhile, Mayor Mamdani's office says that three New Yorkers died from heat-related illnesses in their homes during the heat wave that started last week. In case you haven't heard, the United States, they are out of the Men's World Cup, losing to Belgium.

9:42We'll have more in sports with John Stashauer in a moment. Venezuela's earthquake death toll has risen to 3 ,535. Officials say nearly 17 ,000 people have been injured, 6 ,500 rescued, 18 ,000 displaced. An estimated 60 ,000 buildings were damaged or destroyed in the twin earthquakes on June 24th. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg Alexis. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. Having won three games and having won its group, there was the hope this World Cup team would get to a place the U.S.

10:22had only been to once since 1930. The quarterfinals didn't happen. Belgium won decisively 4-1 to move on to the quarterfinals. And the U.S. still not past that round of 16. That's where the U.S. has gone out in now each of their last four World Cups. An All-American women's quarterfinal match today at Wimbledon, Coco Gauff against Jess Pagoula. They're the only two Americans left. 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.

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13:03coast to coast on Bloomberg radio nationwide on Sirius XM and around the world on Bloomberg.com and the Bloomberg business app. This is Bloomberg Daybreak. And President Trump arrives in Turkey today for a meeting of the NATO alliance where he's likely to heat more pressure on other nations to boost defense spending to 5 % of annual economic output. Speaking yesterday, NATO Secretary General Ruta said progress is being made in this area. They committed to invest 5 % of GDP and defense by 2035. And now, just one year later, we already see transformational progress. Here in Ankara, I expect nations to present clear, concrete, and credible plans to reach that 5 % goal.

13:53And let's get more on the NATO summit now. And what we can expect with Beryl Ackman, Bloomberg's Turkey Deputy Bureau Chief, and Beryl, good morning. Well, we heard from Ruta there addressing one of the president's key criticisms that NATO allies are not paying their fair share. So is he setting the tone here that efforts are being made to appease the president? I think so. I think one of the main goals that we are seeing at the summit is making sure the U.S. stays engaged. And just like you mentioned, one thing you mentioned with Mark Rutte saying that already the European allies are doing this, and that is one way for the U.S.

14:34to stay engaged. Now, already Rutte has said that European allies and Canada are ramping up their spending by more than$200 billion in the last couple of years. But we are also seeing some disagreement taking place. Some are calling this NATO 3.0, where European allies and partners are filling the gap that the U.S. as the U.S. withdraws from some of its commitments. Finland, for example, has argued for a more pro-European stance, while Spain has also said that it will refrain from such spending, noting its other public priorities. But here I think we'll see Turkey as almost a bridge between the U.S.

15:16and European allies. It has emphasized in its prior, President Erdogan, for example, in its prior statements, has emphasized Turkey's defense capabilities. And just across our office in Ankara today, there's a massive defense form taking place on the sidelines of NATO, where Ruta earlier announced some procurement deals, and some Turkish companies are showcasing their defense capabilities. Yeah, Turkey's playing a big role in this, obviously hosting the summit, for one. Also, the president will be meeting with Erdogan later today. So what will you be watching for when they meet? Absolutely. I mean, this is the first time in more than a decade that a U.S.

15:54president is visiting Turkey. So it's monumental for Erdogan and for his image at the NATO summit. Under President Trump, Turkey and the U.S. have boosted a very good relationship. And the U.S. president right before his departure to Ankara has said that he's joining the NATO summit out of his respect for President Erdogan. I think one big item on the agenda for us is anticipation that there might be progress on Turkey's long-stalled bid to rejoin the F-35 fighter jet program. It was removed from the program years ago over its procurement of the Russian foreign air defense system. Now, Trump has hinted at it before that there might be some progress on this, and Turkey is keen to get relief from U.S.

16:38sanctions. So Erdogan will be anticipating that Trump gives his blessings. But I think there is one caveat. And even if there is progress, even if we see any statements today when the two leaders meet for bilateral talks, the mechanics around it remain unclear, given the need for congressional approval and other restrictions. Beryl, Ukraine is also expected to be a focus of the next two days. We have the president meeting with Volodymyr Zelensky on Wednesday. Are we going to hear any specific pledges for defense support here as well? I think that is certainly what President Zelensky wants. I mean, it is a very different climate, I think, for the Ukrainian president compared to the Hague summit when he wasn't even sure if he'd be able to meet President Trump.

17:28Now, I think both sides, especially the U.S. president, has been quite optimistic saying that the war with Russia is close to an end and that both leaders of Ukraine and Russia want the war to end. But we also would expect President Zelensky to highlight the vulnerabilities in Ukraine's air defense system, especially earlier this week, a Russian attack killed dozens of Ukrainians and sort of showed that vulnerability. So at the summit in both his meeting with President Trump and his meetings with other European allies, We expect the Ukrainian president to emphasize more support from the NATO partners, including financially, to help him with more air defense capabilities, including the Patriots.

18:14This 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 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.

18:55Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Alexis Christophorus. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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19:48Receipt chasing? Month-end close that takes weeks? You become what you spend on, and that's not what you're building toward. Brex is the intelligent finance platform that eliminates that work before it starts. AI agents that handle the manual stuff automatically, so your team can spend their time on what actually compounds. It's time to get Brex AF. Learn more at brex.com slash AF. This week on Leaders with me, Francine Lacqua. I speak to tennis legend Rafa Nadal about how he stayed competitive despite injury. I was able to enjoy the victories probably more than if I will not have this issue. One iconic match.

20:28In my mind was, I am almost dead. And whether he misses playing. I don't miss tennis because there was nothing else to offer. Listen and watch Leaders with me, Francine Lacqua, on Bloomberg Television or wherever you get your podcasts.