Report: US, Iran Close to War's End; Trump, China's Xi Prepare for Meeting

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1:53Good morning. I'm Nathan Hager. And I'm John Tucker. Here are the stories we're following today. John, let's begin with the latest from the Middle East, including a major development in the war with Iran. Axios is reporting the White House thinks it's getting close to a deal to end the conflict. Bloomberg's Patrick Sykes reports from Istanbul that this memo would set a framework for more detailed nuclear negotiations. I think the optimistic thing to note in that is that both sides would apparently agree to lift the restrictions on the Strait of Hormuz. So we could see a kind of return to normal for shipping.

2:28The caveat is that it would be an initial step. It would be contingent on there not being a resumption of hostilities. And it would slightly kick the can down the road in terms of the equally thorny issue of what happens to Iran's nuclear program. But markets responding very positively, I think, mainly to the Hornwoods potential. Bloomberg's Patrick Sykes adds many of the terms laid out in the memo would be contingent on a final agreement. The news this morning comes after President Trump announced on social media he would pause an effort to guide stranded ships through the Strait of Hormuz in an attempt to reach a deal.

3:00Hours earlier, Secretary of State Marco Rubio declared the offensive phase of the war over. There's no shooting unless we're shot at first. OK, we're not attacking them. We're not. But if they're attacking us or they're attacking a ship, you need to respond to that. You're not going to let some fast boat come up on the ship and shoot it up. Secretary of State Marco Rubio spoke at a White House news conference. And as we monitor these developments, gas prices keep rising. AAA's nationwide average has topped$4.50 a gallon for the first time since July 2022. That is an all-time high for this time of year.

3:34And Nathan Tehran's top diplomat is in Beijing for talks with China. And this morning, China's foreign minister is urging Iran to keep negotiating in pursuit of a lasting truce with the U.S. These discussions come just days before President Trump is scheduled to arrive in China. President Trump says he would discuss the war with China's leader, Xi Jinping. We're doing a lot of business with China and making a lot of money. We're making a lot of money. It's different than it used to be. But I'll be talking about that. That'll be one subject. But he's been very nice about this. You know, in all fairness, he gets like 60 percent of his oil from hormones.

4:11And he's been I think he's been very respectful. We haven't been challenged by China. They don't challenge us. The leaders are slated to meet in Beijing on May 14th and 15th. And John, global trade is in focus this morning as well. The U.S. ambassador to the European Union, Andy Puzder, says Washington will implement 25 percent tariffs on cars and trucks from the EU, in his words, relatively soon, if the bloc does not swiftly ratify a long-delayed trade deal. What the president was saying, look, this has gone on long enough. We're done debating. We are negotiating. We cut a deal. President von der Leyen and I cut a deal in July.

4:48Our representatives put it to paper in August. We cut the tariffs retroactive to August 1 on automobiles. You've done nothing for nine months. So on autos, unless we see some substantial progress, I think you probably should expect those relatively soon. The U.S. ambassador to the EU, Andy Puzder, made those comments to Bloomberg this morning. The EU, meanwhile, is frustrated over several moves by the president that it argues undermines U.S. commitments under the pact. And the clash between President Trump and Pope Leo flaring up again ahead of a diplomatic mission by Secretary of State Marco Rubio to the Vatican.

5:26Speaking to reporters outside his residence near Rome last night, the pottom said he would continue to preach peace. The Pope pointed out that the church has spoken out for years against all nuclear weapons. That seems to rip off President Trump. Yesterday, the president spoke about the issue with the Hugh Hewitt Show. The Pope would rather talk about the fact that it's okay for Iran to have a nuclear weapon, and I don't think that's very good. I think he's endangering a lot of Catholics and a lot of people, but I guess if it's up to the Pope, he thinks it's just fine for Iran to have a nuclear weapon.

5:59Secretary Rubio, a Catholic, is set to meet with the Pope at the Vatican tomorrow morning. Let's turn to domestic politics now, John, because primary elections are in the books this morning in Ohio. With nearly all votes counted, former presidential candidate Vivek Ramaswamy is the Republican nominee for Ohio governor. I want to say thank you to our U.S. president, President Trump, for his endorsement in this campaign since day one. Vivek Ramaswamy easily defeated Casey Putsch in the GOP primary 82.5 to 17.5%. He'll now face Democrat Amy Acton in the November general election. She ran unopposed in the race to succeed Republican Governor Mike DeWine.

6:38In a key race for Democrats' efforts to take control of the U.S. Senate in the midterms, former Senator Sherrod Brown is the runaway winner, beating Ron Kincaid in the Democratic primary 89.5 % to 10.5%. Brown will face Republican John Husted, the former Ohio lieutenant governor, who was appointed to replace J.D. Vance in the Senate when he became vice president. And then primary elections also held last night in Indiana. And the races to watch there, they were at the state level. President Trump took aim at seven Republican state senators who opposed the party's effort to redraw the congressional map.

7:13Of the seven challengers that the president endorsed, at least five won. One incumbent prevailed. Now, the seventh race, that is too close to call right now. The president's allies spent at least$8.3 million on these state Senate races. And in Michigan, Democrat Cedric Green defeated Republican Jason Tunney in a special election that keeps Democrats in control of the state Senate for the rest of Governor Gretchen Whitmer's term. Let's turn back to markets now, John. Futures are surging once again after yesterday's record-setting day on Wall Street. Chips are set for more gains after earnings from advanced micro devices.

7:53That stock is up nearly 19 % in early trading. Let's get the details now from Bloomberg's Alexis Christophoris. Good morning, Alexis. Good morning, Nathan. A flood of spending on data centers helped boost AMD's first quarter results and its second quarter sales forecast. The upbeat outlook signals that it's winning orders from the biggest spenders on artificial intelligence computing, with data center customers increasingly looking for alternatives to NVIDIA. Shares of AMD, they've been on a tear. The stock was up 66 % heading into its earnings report, and it's on track to reach a record high if those gains extend into regular trading.

8:29In New York, Alexis Christophorus, Bloomberg Radio. All right, thanks, Alexis. And the earnings continued today with more than 30 companies in the S &P 500 reporting. Heading the list, Disney. Let's get a preview now from Bloomberg's Tom Busby. Now, this is Disney's first earnings report under new CEO Josh DeMauro, who's right now dealing with the FCC announcing an early license review of Disney's owned and operated ABC stations. That's over some off-color jokes from late-night host Jimmy Kimmel. Also, there's the collapse of a$1 billion deal with OpenAI after it shut down its Sora video-generating tool.

9:02But thanks to Strength and its theme parks division and at its movie studios, which have a new Star Wars film out later this month, Toy Story 5, out in June. So Bloomberg consensus calls for revenue of$24.87 billion on adjusted earnings per share of$1.51. Tom Busby, Bloomberg Radio.

9:21It's 5.08 on Wall Street. Time 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, John. We're learning of another close call at an airport and again in the New York area. A pilot on a regional Delta Airlines flight reported a small plane getting too close as the passenger jet approached JFK Airport on Monday. ABC7 reports, according to Air Traffic Control audio recordings, an air traffic controller warned the pilot of the Delta plane of a personal aircraft. The controller said they were not in contact with the small plane and that the plane was about 500 feet above them.

10:03Thankfully, there was no crash. This comes after Sunday's incident when a United passenger jet coming in for a landing at Newark Airport, flying so low over a turnpike that the plane hit a truck and a light pole. The U.S. Attorney for Washington, D.C., Janine Pirro, revealed more details about the shooting on the National Mall Monday. Pirro speaking to ABC says undercover Secret Service agents and officers noticed a suspect with what looked like a firearm near the White House. She says an agent briefly followed the suspect, and after making contact, he ran, then opened fire on the agents. Pierrot identified the suspect as Michael Marks, who she says will be charged with assault against the federal officer.

10:47People think that by coming to the nation's capital, they can really put an emphasis on their political statement. And I don't like that the nation's capital is being used as the venue or the context within which people want to practice their political violence. A teenager who was standing by was shot but has been released from the hospital. A scare at Yellowstone National Park, two hikers mauled in a possible grizzly bear attack. Another hiker, Craig Lerman, hearing of the calls for help from a distance, eventually found them. Continued up the trail, saw a bloody hat and a watch that looked like it was torn off.

11:27Lerman says that he was told both victims survived and they're both recovering. That bear's still on the loose. Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg. Thanks, Michael. Time now for a Bloomberg Sports Update. For that, we bring in John Stashauer. A couple of wins by the home teams in round two series openers. Detroit beat Cleveland 111-101. Cavs yet to win on the road in these playoffs. And Oklahoma City beat the Lakers 108-90. OKC had the best regular season record and unbeaten in the playoffs. Same is true of the Colorado Avalanche in the NHL.

12:01A 5-2 win over Minnesota, 2-0 series lead. They held the NHL Draft Lottery. Toronto will have the first pick. The NFL on the verge of a labor deal with the officials union. They'll vote to ratify the deal tomorrow. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Is passive investing costing you more than you think? Active ETFs aim to beat the benchmark, while passive ETFs just settle for them. Embrace an active strategy that helps you build stronger portfolios. Invest with a global leader in active fixed income ETFs with JPMorgan Asset Management.

12:36Visit jpmorgan.com slash get active to learn more. JPMorgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by JPMorgan Distribution Services Incorporated, member of FINRA. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes.

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14:32Let's create smarter business. IBM. 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, following fast-moving developments in the Middle East. a day after putting it in effect. President Trump has put his effort to guide stranded ships through the Strait of Hormuz on hold. And this morning, there are reports the U.S. and Iran may be closing in on a memo of understanding to end the more than two-month war. Joining us this morning from Istanbul for the very latest is Bloomberg News Middle East breaking news editor Patrick Sykes.

15:10Patrick, we understand this is a report from Axios. What are we hearing this morning? Morning, yes. The key things to mention there, the US believes it's closing in on a one-page memorandum of understanding with the Iranians that would end the war and set a framework for further talks. I think the optimistic thing to note in that is that both sides would apparently agree to lift the restrictions on the Strait of Hormuz, so we could see a kind of return to normal for shipping. I think the caveat is that it would be an initial step. It would be contingent on the not being a resumption of hostilities, and it would slightly kick the can down the road in terms of the equally thorny issue of what happens to Iran's nuclear program.

15:58But for now, as you mentioned in the intro, markets responding very positively, I think mainly to the hormones potential. From what we understand about this Axios report, Patrick, does this sound similar to what we had been hearing that the Iranians had put forward coming to this idea of ending hostilities first and then talking about the nuclear piece of this after another 30 days, I think it was. Indeed, yeah. A lot of it lines up. Also, this idea of a moratorium on uranium enrichment, we know that that had been talked about in previous rounds of negotiations, even before the war, but also since it began.

16:38The question is more of how long that moratorium would last. And then also the U.S. lifting sanctions, Axios is saying, would be part of that agreement as well. That has from the start been a key demand for Iran. So yeah, I think if that is the case, the Iranians would be happy with that, with the caveat that for them, the deal breaker is all about whether or not this is a lasting peace. They want to see a resolution, not just to the conflict that began just over two months ago, but the conflict that for them has been running way back to the start of the Gaza war. In the meantime, of course, we saw the social media post from President Donald Trump last night announcing that the effort dubbed Project freedom to guide ships through the Strait of Hormuz is on hold now to allow for these discussions to move forward.

17:32Where does that leave the situation in the strait? Yeah, Iran is, of course, framing that as a retreat for the U.S. and a proof that, in its own words, it is firmly in control of the strait. I think for shipping, it means that it just remains even more insecure, right? We did see in the short time that project was in place, we saw two US-affiliated ships moving through it with that key US military support. But we did see at the same time one ship being targeted yesterday, reports of a French ship being targeted today. So I think it just underlines that it still remains very unsecure. That suspension will do nothing to reassure ship owners in the region, let alone the crews who are out there on the ground.

18:23This 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 at 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.

19:02Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm John Tucker. 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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