Trump Will Escalate Attacks; ICE To Halt Vehicle Stops

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1:34highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org. Bloomberg 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 from the Middle East. The U.S. has completed a fourth straight night of attacks against Iran. President Trump says the strikes will continue until he says it's enough. We're going to hit them very hard tonight. We're going to hit them very hard tomorrow night. We're going to hit them very hard the night after. And then next week it gets really bad for them because next week comes the power plants.

2:22Next week comes the bridges. That was President Trump in an interview on Fox News. We get more from Bloomberg Middle East correspondent Abir Abu Omar in Dubai. The United States has been attacking Iran over the past few days consecutively every single night. The latest round of strikes happened in the early hours of this morning or was finalized in the early hours of this morning here in the Middle East. Seven hours of waves of attacks on some weapon launchers, some military targets. President Trump, as you just heard, saying that next week the U.S. will start hitting bridges, some infrastructure in Iran as well.

2:57So threats that have been made before. And Bloomberg's Zabir Abu Omar reports these latest attacks came after President Trump backed off plans for a 20 percent charge on cargo shipments through the Strait of Hormuz. That's after allies in the Gulf urged him to drop it. The president says the fee will be replaced by direct investment by Gulf allies. He did not specify a dollar amount or which countries would be taking part. Nathan, let's get the latest now on an incident that sparked protests near Portland, Maine. The ICE involved shooting of a driver in the town of Biddeford. It is the second time this week that ICE has used deadly force and at least the ninth death since President Trump began his immigration crackdown.

3:36Protesters held a rally outside an ICE facility in Scarborough, Maine. Yesterday, community activist Todd Cretien addressed the crowd. Yesterday morning, they executed Johann Sebastian Guerrero in the streets of Biddeford in front of his three-year-old daughter. We knew that was going to happen, but it doesn't change the fact that it breaks our hearts. Activist Todd Cretion, White House Borders Czar Tom Homan, says the investigation into Guerrero's death still needs to play out. Where it lands, it lands. If officers acted inappropriately or illegally, it would be held accountable, just like they were in Minnesota.

4:11And Borders Czar Tom Homan, the Department of Homeland Security, has said the ICE agent opened fire, fearing for public safety. After the driver tried to flee a traffic stop, DHS has ordered a temporary pause on vehicle stops to give agents more training. Back in Washington, Karen, Acting Attorney General Todd Blanche is set to appear before the Senate for his confirmation hearing to become the Justice Department's permanent leader. It comes just days after a federal judge in Miami blasted Blanche for his role in settling President Trump's$10 billion lawsuit against the IRS. Ted Lieu is vice chair of the House Democratic Caucus.

4:47A federal judge said that the Trump administration basically sued itself and engaged in collusion, and that this whole scheme was concocted by Department of Justice attorneys. The judge voided the$1.8 billion January 6 slush fund and referred their attorneys to disciplinary proceedings with the state bars. As House Democrat Ted Lieu, three key Republicans on the Senate Judiciary Committee have said they are undecided on Blanche, John Kennedy, John Cornyn, and Tom Tillis. Just one no vote could be enough to kill Blanche's nomination. We turn to the economy now, Nathan, where Kevin Worsh returns to Capitol Hill to wrap up his congressional testimony.

5:29Yesterday, the Fed chair said policymakers have no tolerance for high inflation and share a commitment to restoring price stability. Worsh testified following the release of the cooler-than-expected CPI report. There might be some that look at this morning's data and say, oh, mission accomplished. Everything is swell. That is not my view. Fed Chair Kevin Warsh testifies before the Senate Banking Committee today. Well, Karen, tech stocks are leaning futures higher this morning. It comes on the heels of earnings from ASML. The Dutch chipmaker lifted its annual sales forecast for the second time this year.

6:05ASML says a surge in artificial intelligence spending is driving demand for its chipmaking machines and shares of ASML traded in the U.S. are higher by 4 % pre-market. And staying in the chip space here, Nathan, the premium for SK Hynix's American depository receipts over its South Korean shares soared to more than 50%. Just three days after their U.S. trading debut, the ADRs gained 27 % yesterday, more than recovering from a 9 % drop a day earlier in South Korea. On the flip side, Karen, IBM had its worst day in the markets in almost 60 years. That stock plunged 25 % yesterday after it reported preliminary second quarter sales that fell short of estimates.

6:49Big Blue attributed the miss to customers shifting spending to chips and servers amid AI-fueled shortages. And SpaceX shares, Nathan, they're on the verge of falling below their IPO price. In fact, the Elon Musk company, which went public at$135 a share, closed just$1 above that level yesterday. SpaceX shares now have plunged one-third from its post-listing peak. It has erased nearly$850 billion in value. Finally, Karen, there will be no turning back the clock. If the House has its way, lawmakers have passed a bill that would make daylight saving time permanent. Now, the Senate would also have to pass this bill before it can be signed into law, but it's unclear if senators will do so, and states could still opt out if their respective legislatures act to do so before the bill is enacted.

7:40Time 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. Today is forecast to be the hottest day in this week's heat wave in the Northeast. With more, here's Bloomberg meteorologist Craig Allen. It did get quite uncomfortable yesterday. The heat and humidity were on the rise, but did you notice the orange color to the sky? It was especially prominent from New Jersey and New York City on north to Boston. Smoke from Canadian wildfires. Sound familiar? Well, that made for a hazy day, and the air quality may suffer for the next day or two.

8:17That, along with high heat and humidity, is not a good combination, especially for those with respiratory problems. problems. Now, the thermometer will be up into the 90s to around 100 today, especially in the D.C. region, 90 or so for New York City and Boston. And this is likely to continue for at least another day or two. Bloomberg meteorologist Craig Allen. New York Governor Kathy Hochul announced a one-year moratorium on new large data center projects in the state. It's the nation's first such pause at a time when anti-data center politics is on the rise around the country. Hochul spoke during a Bloomberg Outlots podcast.

8:56So I want to make sure that we take the time to have a community investment framework to give to localities. But also, you have to be able to power yourselves. You want to come in. I said this in my state of the state back in January. I launched the public service commission to start this process. They'll be done within this year of the moratorium so we can have certainty for businesses. But you come, you bring your own power source or you have to pay a premium to use our grid. And those are the basic foundations of what we're doing with this moratorium. Governor Hochul announced a pause on approving large data centers that consume 50 megawatts or more of power, citing concerns over rising utility bills and a strain on natural resources.

9:39Catch more of the governor's conversation with Joe Weisenthal and Tracy Alloway on the latest edition of Bloomberg Odd Lots, available wherever you get your podcasts. Thai officials say that two more people injured in a huge fire at a Bangkok music bar have died, bringing the death toll to 32. More than 70 people were injured in the late Sunday blaze. Global News, 24 hours a day, and whenever you want it with Bloomberg News Now. I'm Michael Barr. This is Bloomberg. Karen. Thanks, Michael. Time now for our Bloomberg Sports Update, and for that, we bring in John Stashauer. Thanks, Karen. The 96th baseball All-Star game in Philadelphia.

10:16And the American League got to the Phillies pitcher Christopher Sanchez in the first inning. The Cody Bellinger two-run single. And then his Yankee teammate Ben Rice with an RBI single. Miguel Vargas added a home run in the eighth inning. The American League won 4-0. Spain over France 2-0 in the World Cup semifinals. So Spain is in the final for just the second time ever. We'll play the winner of today's game between England and Argentina. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. This episode's sponsored by Ridwell. Ever tossed something into your recycling bin and just hoped it would get recycled?

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11:31Visit bloomberg.com slash podcast offer to learn more. Coast 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. After a fourth straight night of attacks on Iran's missile and drone capabilities near the Strait of Hormuz, President Trump is promising the strikes will only end when he says they will. I'll save the energy targets for last, but ultimately we'll hit energy targets, yeah. And that was President Trump speaking with Fox News. Joining us this morning from Istanbul is Bloomberg News Middle East breaking news editor Patrick Sykes.

12:11Patrick, can you catch us up to speed on what has been happening in the last 24 hours? How intense have the attacks been and what kind of retaliation, if any, have we seen from Iran? Good morning. Morning. Yes, the attacks do appear to be increasing in intensity, both on the ground where Iran says about 30 civilians have been killed in recent days and also just overnight at least seven soldiers from the army in a single attack of those strikes overnight. And then also looking ahead, you know, with that rhetoric we heard in the intro from Trump, he's returning to that rhetoric about threats to civilian infrastructure like power plants.

12:51The last time we heard that was during the height of the war, and it really felt like a point from which everyone started to climb down. Whereas this time around, with the rhetoric on both sides, Iran still very much saying that it's not going to back down, insisting on control over the Strait of Hormuz. It does feel like we're firmly back on an escalatory ladder. And the MOU that they signed with Pakistani mediation to ostensibly work towards an end to the conflict appears now to be effectively over. And Patrick, do we have to start thinking then about the same kind of ideas that we were thinking about the last time President Trump made these kinds of threats against Iran's potentially civilian infrastructure in terms of what kind of support the U.S.

13:41could have from some of its allies globally? Yeah, I think any attacks like that would be a very divisive move. And of course, the decision to go to war itself has already been very much so. On Hormuz, and if not the root cause of the current situation, at least on seeking a resolution for it, I think the US can count on a bit more support from allies on that front, but less so when it comes to returning to kind of outright hostilities in Iran, particularly on those kinds of targets. The exception, of course, would be Israel, from whom we haven't yet seen participation in these latest attacks.

14:23That's one way in which the U.S.-Israeli alliance might seek to further up the ante. But it's also the kind of those kinds of strikes are also something that Iran would look to respond to in kind. We've seen in the past that it's threatened to target, for example, water desalination plants in Arab Gulf countries around the Persian Gulf. That is a really critical issue for those countries, you know, with the climate being what it is in that part of the world. And Iran going for that kind of critical infrastructure would be a step even beyond the kind of energy targets that we saw last time around.

15:03You mentioned that the president had backed off this type of rhetoric the first time around. Just this week, he's also backed off this idea of a 20 percent reimbursement for cargo through the Strait of Hormuz. There's so much attention, of course, on maintaining free shipping through the Strait of Hormuz. What is the status of the Strait at this point? Are we still seeing some shipping move through? We've got just about a minute left. Yeah, it's basically a face-off over the strait, right? The two sides disagree just fundamentally on that particular clause that they agreed to in the MOU. And as of now, traffic is vastly reduced.

15:44We're seeing a little trickle, but you're reduced to the kind of a handful of companies that are willing to take the risks involved to just shuttle the relatively short distance between either side of that waterway and then pass on their cargo to others. So it was already extremely restricted. The attacks of the last few days have only made it more so. Okay, Patrick, again, I really appreciate the update and for checking back with us from Istanbul. That is Bloomberg News Middle East breaking news editor, Patrick Sykes. Karen. Nathan, let's turn now to our discussion with New York Governor Kathy Hochul.

16:19She sat down with Joe Weisenthal and Tracy Alloway on Bloomberg's Odd Lots podcast, discussing New York becoming the first state to issue a moratorium on new hyperscale data centers, and also talked about energy and AI implementation. Let's listen in. I launched the Public Service Commission to start this process. They'll be done within this year of the moratorium, so we can have certainty for businesses. But you come, you bring your own power source or you have to pay a premium to use our grid. And those are the basic foundations of what we're doing with this moratorium. It is not a ban. It is simply saying, step back, take a breath and get it right.

17:00Businesses want that knowledge of what the rules of the road are. We've actually had some interesting tweets from the builders of these facilities who are now saying, hey, just tell us the rules. Tell us the regulations. We're okay with that. And that's exactly what we're doing, but also responds to a lot of frustration from these communities, from people who don't think that they're paying their fair share or that they're just coming in and just start forcing themselves in. And that's really annoying to people. It's just, they've had enough. Americans have had enough. So this is the U.S.'s first statewide moratorium on data centers, which means inevitably this is going to be seen as a test case or an experiment.

17:39When you think about this, what exactly is it you're trying to, I guess, prove or disprove or achieve? Like, what are you looking for here? What should the outcome of the moratorium actually be? Very specific goals. My public service commission will take this year to devise a plan where we figure out how to make sure that they bring their own power or that they're substantially contributing to the grid. Secondly, I want them to contribute. This takes time for government to get this right. I'm establishing a larger grid resiliency fund. I want them to make major contributions so I can invest in the energy grid, the transmission lines, and everything else that has been ignored for so long.

18:19That's one of the reasons why our energy infrastructure is crippled. The investments were not made. So you're going to contribute to the locality. You're going to contribute to bring your own power and also this larger dynamic. So that's that we're looking for. Those are very specific. I have agencies all working on them now. I have about seven or eight agencies dedicated to this. I'll put the person power behind this, and we will be a template for doing it right. Right. We know in some instances, I think I've seen headlines like in Louisiana, for example, the big meta campus, not campus, data center.

18:51It's like there's going to be payments to teachers in the area. The idea, I suppose, is, okay, hey, any place that's open for data center business, let's make sure that we get these, you know, the same agreements that are being put in place elsewhere to benefit the community. How should we like, moratoria can become bans, right? Something is like, we're going to put this in place for one year, and then it's two years. We're still working out the rules of the road that is five years, and then you never have them. What sort of like, are you actively trying to avoid this becoming a ban? I'm not expecting the need for a ban.

19:27I want them to work with us. No, I understand how important AI is. We are in a revolution. This is the winds of change are coming in at hurricane force. And it's disruptive, but it'll also be very positive. And I'll tell you, my commitment to AI goes back years when I launched the first in the nation development of a supercomputer, the largest outside any private company, is being built in New York for public good. What does that mean? All of our universities can tap into power, computing power that is unavailable to them otherwise. We are innovating new therapies in cancer, working on it right now up in Buffalo.

20:06We are also trying to solve some of other society's other problems, and even weather forecasting. I mean, you would not believe the disasters I have to deal with this governor. You know, heat waves, blizzards, floods, storms. And so there's all kinds of positive ways we can use AI.

20:48and 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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