Trump Maintains Naval Blockade; Big Tech Earnings Wrap with Apple

0:00If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati Insurance Companies. Let them make your bad day better. Find an agent at c-i-n-f-i-n dot com.

1:01that moves the business. Let's create smarter business, IBM. As industries evolve faster than ever, companies need an environment that accelerates strategic growth and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent and a quality of life that supports work-life balance. With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org.

1:38Bloomberg Audio Studios, podcasts, radio, news. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we begin with the latest on the standoff between the U.S. and Iran. President Trump is promising not to let up on the naval blockade of Iran's ports to try to pressure Tehran back to the negotiating table. The president says Iran's economy is a disaster and the impact on U.S. prices at the pump won't last. The country's doing really well. And that's despite a military operation. I don't call it a war. We'd rather have a military operation. We're really, I mean, Iran is dying to make a deal.

2:24I can only tell you that. That was President Trump speaking to reporters in the Oval Office. But Iran is holding firm, as we hear from Bloomberg's Patrick Sykes in Istanbul. The supreme leader in Iran, who we still haven't seen in person or even heard his voice, who's still in effective hiding and thought to be wounded, he said very clearly that Iran wouldn't be compromising on its nuclear technology or its missile program. And then overnight as well, Iran had said that it intercepted some drones overnight. So it still feels like it's very tense even above Tehran itself. Bloomberg's Patrick Sykes reports Iranian officials are warning the blockade will keep driving up oil prices.

3:02Axios is reporting that President Trump got a briefing from U.S. Central Command and the head of the Joint Chiefs of Staff about further military options against Iran. Nathan Defense Secretary Pete Hagseth and other Pentagon officials wrapped up testimony on Capitol Hill, this time answering questions before the Senate Armed Services Committee. Hanks has defended the U.S. position about the war with Iran to Democrat Kirsten Gillibrand of New York. So the question I would ask to you and to others is, what is the cost of a nuclear-armed Iran? What is the cost to the American people if the world's most dangerous regime has a nuclear weapon?

3:36But the truth is, they don't want war coming to this shore. And when you do a decapitation operation, the likelihood is going to be exchanged in the United States. There's no evidence that we are safer because of this war. We did not have any evidence that Iran intended to imminently attack this country in any way, shape or form. On Wednesday, Hankseth got grilled by a House panel who questioned the U.S. justifications for the war in Iran. McCarran, the longest partial government shutdown ever is over. President Trump has signed the bill to fund most of the Department of Homeland Security except for immigration enforcement.

4:11Republicans plan to pass those funds separately in a budget bill that won't require Democratic votes. Here's House Speaker Mike Johnson. This will relieve pressure from the Department of Homeland Security, Secretary Mullen. We greatly relieved. The president will. The administration will. We're not going to have lines at TSA. Everybody will get their paychecks now. We'll get moving forward. House Speaker Mike Johnson says Republicans overcame their differences on the bill after the White House warned it had run out of funds to pay TSA workers this month. Democrats had demanded restrictions on ICE enforcement after the killings of two U.S.

4:41citizens in Minnesota, but Republicans rejected their proposals. Democrats say the issue will come back to haunt Republicans in the midterms. Let's turn to the markets now, Nathan, where the record run on Wall Street continues. The S &P 500 and NASDAQ entered today's session at all-time highs. The S &P rose 10 % in April, its best month since 2020. Matt Rau is senior portfolio manager at Mann Group. I think there's an assumption that at some point in the relatively near term, we're going to get a resolution to the straits being reopened, the normalization of crude. So for now, the market is saying that the AI benefit and the potential upcrash associated with AI has a higher weight than the potential near-term consumer spending drag.

5:27Matt Rao of Man Group, the S &P 500 closed above 7 ,200 for the first time ever yesterday. Big company news to tell you, Karen, shares of Apple are up more than two and half percent in early trading. The iPhone maker delivered a surprisingly strong revenue forecast for the third quarter. We get more from Bloomberg tech host Ed Ludlow. Change in fortunes for the stock, change in sentiment on how Apple's doing. The guide for the current period, the June quarter, is that revenue will grow 14 percent to 17 percent year on year. There is strong demand. There was one notable moment. Incoming CEO John Ternus did speak briefly on the call.

6:06He said There's an exciting product roadmap, but specifically declined to give any details. So the key takeaways, strong demand, some supply constraints, manageable cost pressures. And it was all about the guidance that was good enough to change the course of direction for the stock, but also how the market felt about what was a beat but not a blowout for Apple in the quarter gone. This is Ed Ludlow for Bloomberg News in San Francisco. All right, Ed, thank you. Well, shares of Roblox, they are plunging down almost 23%. The video game company reported first quarter users that fell short of analyst estimates.

6:41And the drop comes after Roblox implemented safety features restricting how kids who make up a majority of its audience can use the platform.

6:52Time 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. King Charles and Queen Camilla have wrapped up their visit to the U.S. During his visit, King Charles gave a speech before Congress, attended a state dinner, and paid a visit to New York City. On their last day, the royal couple paid their respects at the tomb of the unknown soldier at Arlington National Cemetery, and they celebrated America's 250th birthday at a block party in Virginia. More than a million people in Lebanon are expected to face food insecurity by August, according to a new analysis from the United Nations and World Food Program.

7:31Joseph Beliveau is the executive director of the humanitarian group MedGlobal. He says the food crisis is due to the war in Iran, displacement and economic pressures. We're incredibly stressed. The entire health system was already vulnerable, was already fairly weak prior to March 2nd, when this round of conflict erupted. Since that time, 147 hits on medical facilities. Joseph Beliveau with MedGlobal. A suicide note purportedly written by the convicted sex offender Jeffrey Epstein is locked inside the case file of his former cellmate, convicted murderer Nicholas Tartaglione. He told the New York Times it was written on paper from a yellow legal pad and tucked inside a book.

8:17Tertaglione says he found the purported suicide note in July of 2019. A school board meeting got so heated in Philadelphia that the board members shifted to a virtual format. The board approved a controversial three billion dollar facilities plan that includes, among other things, the closure of 17 public schools. Lisa Haver is with the Parent and Community Group Alliance for Philadelphia Public Schools. I'm horrified. I'm like, how many times can these students and parents come and say, we don't want this, save our school? District leaders say it's necessary because they have to address a$300 million deficit.

8:55Global News 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg Karen. All right, Michael Barr, thank you. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. An NBA playoff blowout. The Knicks in Atlanta led 40-15 after the first quarter and 83-36 at halftime. The final was 140-89. They win the series 4-2. They'll find out tomorrow who they'll play in the next round. The Celtics and Sixers are going to a Game 7 in Boston after Philly stayed alive for a second time. Minnesota finished off Denver winning four games to two in the Stanley Cup playoffs.

9:31Five to two wins at home for both Minnesota and Anaheim. Both teams move on. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. 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. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies.

10:14Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and build a one-of-a-kind index. You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. Ad paid for by Public Holdings. Brokered services by Public Investing, member FINRA SIPC. Advisory services by Public Advisors, SEC Registered Advisor. Crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice.

10:51All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. That's why they make business growth their priority. The Chase team takes the time to understand your mission, where you are now, and where you want to go. Their broad range of solutions is designed with you in mind so you can bring your ideas to life. From banking to payment acceptance to credit cards, you can conveniently manage all your business finances all in one place with their digital tools.

11:26Looking for tips and advice? Their online resources are always available to give you the solutions you need to help your business thrive. See how your business can get stronger and go farther with Chase for Business. Learn more at chase.com slash business. Chase for Business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. We buy insurance for peace of mind, but every year millions of claims are denied. Not because people did anything wrong, but because their policies quietly excluded what happened.

12:04Insurers know every detail. Policyholders rarely do. That's why My Policy Advocate exists. For just 27 cents a day, their platform reads your policies and explains where you are vulnerable. They don't sell insurance, they deliver transparency. Before you trust your policy to protect you, let My Policy Advocate tell you what it really says. Go to MyPolicyAdvocate.com.

12:28Coast 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. Good morning, I'm Nathan Hager. Easily the biggest week for earnings this quarter is closing out with surprisingly strong results from Apple. The iPhone maker delivered a revenue forecast blowing past Wall Street estimates. So it did come with some warnings. that memory chip costs are going to keep going up and a shortage of Mac computers could last for several more months. Here with us for some morning after analysis is Dan Ives, the global head of tech research at Wedbush Securities.

13:05Always great to talk tech with you, Dan. And I did see your post on X saying that these earnings usher in a potential golden era for Apple. Tell me more. Good morning. Good morning. Look, I mean, me and you, you know, if you think about over the last year, there have been ups and downs. But we're actually really more downs and ups in terms of what we've seen the last few years. This was as robust of a quarter and got as we've seen a few years. I mean, this is almost a mini super cycle that's playing out. I think there's a stock that's going to have huge upside here. And it's just as Cook's handing the baton to Ternus.

13:42Really a golden knight, not just for the Knicks, but for Apple. OK, I did see your note as well, putting a focus in particular on the results out of China. Is it going to be particularly important for Apple to keep growing the market in China to keep its momentum going? Look, Nathan, that's the hearts and lungs. And if you think about the last year, that's been a headwind. Now it's a tailwind. Now, look, some of that is product cycle. Some of it's also Cook being part politician navigating what we've seen in China the last year. But now it's a talent. And that's the hearts and lungs of Apple's strategy.

14:2220 % of iPhones come out of China. A huge sort of flex the muscles moment for Cupertino. I mentioned the memory chip costs. This is something that's been coming up quite a bit this particular tech earnings cycle, the chip costs going up. Is that going to be a crimp on Apple's margins? Are consumers going to have to start thinking about prices going up for their next round of iPhones? Yeah, it's really the latter. I think you'll have 100, maybe$150 price increases. Look, some of that they'll absorb through the supply chain. But ultimately, this is something that they're going to have to hike prices a bit.

15:05Nothing significant. It's just what's happened in memory. It's a memory super cycle. And to get on the line for those chips, there's shortages we've seen across the board, given AI revolution. Do consumers stomach that, those kinds of price increases, do you think? Look, I think when I think about called 300 million that have an upgrade to iPhone, there will be a lot of incentives out there from the carriers. Carriers will also probably, you know, ultimately absorb some of that. It's maybe a 1 % churn. from that number, maybe 1.5%. But that's not something too significant. And look, when it comes to pricing, navigating the supply chain, when to raise prices, the Hall of Famer Cook knows when to do it.

15:53And I think that's what you'll see. So how does this set things up for John Ternus when he does take the baton and thinking about the Worldwide Developers Conference coming up as well? What about the AI story, Dan? Well, first off, if you go back, I mean, it was a surprise, obviously when Cook announced, but now knowing these numbers, you see why he did it. Because he's handing the baton a great time going into almost a mini super cycle. But the reality is for Turnus, it's going to be about AI. That will define Apple. I think at WWDC is where they ultimately released the first part of that strategy in terms of Siri AI with Gemini.

16:29We think ultimately it's a subscription service. That's going to be important. We think that's worth$75 to$100 per share as the consumer AI revolution goes through Cupertino. In our last minute, Dan, what's your overall take on how this week of earnings went? It seemed like it was kind of hit or miss when it comes to how these hyperscalers are monetizing AI. Look, this is about as bullish underlying fundamentals and guide that you could have seen from big tech, specifically in terms of the cloud players, everything you're seeing from Microsoft, Google, Amazon, and even Meta from a CapEx perspective.

17:09Look, I think the bear thesis essentially got thrown out the window this week. I think tech stocks are up another 10 to 15 % higher. And there is no better validation you could have seen from big tech. Bulls go into the weekend, pretty happy. And in our last just 10 seconds here, you talk about what time it is in the AI party. What time do you think it is now? Look, it's about 11.30 p.m. maybe the cops came and tried to break up the party over the last month, they left, and the music's back on. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

17:47Look 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. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long.

18:25I'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.

18:58demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions. Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward.

19:35The Cincinnati Insurance Companies. Let them make your bad day better. Find an independent agent at c-i-n-f-i-n dot com. On June 10th, Bloomberg Invest is back in Hong Kong. We look at the role Hong Kong plays between China and the world as major powers compete and markets realign. as global investors rethink risk. We'll explore the forces driving Asian demand and the future of private capital. Catch exclusive interviews with top newsmakers plus a live recording of Bloomberg's Odd Lots podcast. Visit bloomberglive.com forward slash invest Hong Kong to learn more. Supporting sponsor Deutsche Bank.