US & Iran Hold Fire For Now, Three Shot Dead In Seattle

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1:02Bloomberg Audio Studios. Podcasts. Radio. News.

1:10Good morning. I'm Karen Moscow. And I'm Alexis Christophorus. Here are the stories we're following today. Alexis, we do begin with that big decline in oil. The move comes after the U.S. paused an almost two-week run of strikes against Iran. After 13 straight nights of strikes aimed at degrading Iran's ability to attack commercial shipping, The U.S. has apparently held off since late Friday. Iran has halted its retaliation as a result. And we get more from Bloomberg Middle East breaking news editor Patrick Sykes. The U.S. seems to have reached the conclusion that daily strategy of strikes, particularly around Iran's southern coast on the Persian Gulf, hasn't been leading to the results it was hoping for, and that diplomacy needs to be the way forward.

1:54What exactly that might look like is also fairly unclear at the moment. We know that, of course, the Pakistanis remain the main mediators in all of this. And I think it's of note that Iran's interior minister was in Pakistan, Islamabad, around this time last week. And as Bloomberg's Patrick Sykes, Mike Waltz, Washington's ambassador to the United Nations, said President Trump is giving diplomacy, quote, some space. This morning, an Iranian foreign ministry spokesman said Iran will not allow the U.S. to determine the timing of the war. The latest pause in fighting comes as Israeli Prime Minister Benjamin Netanyahu prepares to go to the White House this week.

2:31Netanyahu says he plans to press President Trump to keep a constant watch on Iran's nuclear program. Bloomberg's Monica Ritz has details. Israeli Prime Minister Benjamin Netanyahu says the U.S. and Israel have set back Iran's nuclear abilities a good few years, but cautions Tehran could still try to reconstruct what's been destroyed. Our intel services and yours are working so close together that it's not that I'm going to present new information, but I think it's a good thing to have the opportunity to sit with our good friend President Trump and to hear what he has in mind because I think in many ways it's his decision.

3:08Netanyahu on Fox News. Trump has also said the U.S. is locked and loaded for major strikes on Iran, but suggested he'd wait for diplomatic talks to play out. Monica Ricks, Bloomberg Radio. All right, Monica, thank you. In Seattle, police say three people were killed and at least five others injured after gunfire erupted at a crowded food festival beneath the Space Needle. One person has been arrested. The shooting happened around 6 p.m. Sunday at the annual Bite of Seattle Festival. Mayor Katie Wilson said Sunday night her heart is with the victims. What happened here today at the Seattle Center was an unbelievable tragedy, a horrific act of violence.

3:47And here's Assistant Seattle Police Chief Tyrone Davis. Officers responded and addressed one of the shooters. That person gave up and was taken into custody. There was another person that we believe that was also involved and fled the scene. Seattle Police Assistant Chief Tyrone Davis says for now, detectives did not have any description of the outstanding suspect. Investigators believe the two were shooting at each other and there is no ongoing threat to the public. And Karen, in Europe, French and Spanish firefighters are battling wildfires for a sixth day. More than 300 ,000 people have been evacuated as fires threaten cities including Madrid and Bordeaux.

4:28We get the latest from Bloomberg Managing Editor Ben Sills. In Madrid, where I am, the situation is somewhat better. The authorities are reporting that the main fire to the west of Madrid is now more or less contained. That said, it's been an extremely nervy weekend. I was watching last night as the firefighting planes were kind of flying over, moving out to the west, quite near to where I live. And, you know, at times over the weekend, the sky was filled with kind of thick brown smoke. There was ash all over the streets of the place where I live. So it seems like it's contained, but it's been a really strange and quite scary weekend.

5:07Bloomberg's Ben Sills says Spain's fires were fueled by a combination of heat waves and depleting soil moisture. Similar reasons are being cited in France. Well, we turn to the markets now, Alexis, where the pause in fighting in the Middle East is giving stocks a lift. S &P futures up nine-tenths of a percent this morning. It'll be another key week for earnings. MegaCap tech names, Amazon, Apple, Meta Platforms, and Microsoft all report. We can get more with Bloomberg's Charlie Pellett. The focus will be very much on CapEx and return Learn on investment. Cara Murphy is president of Kestra Investment Management.

5:43I mean, I think the CEOs at these companies should be more cautious. They need to listen to what the market is telling them. The market is saying you can't just keep spending money like this. Also reporting this week, Boeing, Coca-Cola, Visa, MasterCard, Qualcomm, Starbucks, and then Friday, Oil Majors, ExxonMobil, and Chevron. In New York, Charlie Pellett, Bloomberg Radio. All right, thanks, Charlie. The economy will also be in focus this week. The Fed makes a policy decision on Wednesday. We get a preview now from Bloomberg's Michael McGee. A month after a surprisingly benign CPI inflation report, investors are now pricing in a growing chance the Fed raises interest rates this week.

6:21It's still less than 50 percent, but it's a remarkable turnabout in sentiment. Trump's re-escalation in Iran has energy prices rising sharply again. Tech companies are reporting very high demand for AI components, and the administration has reimposed tariffs. The combination sets the stage for a re-acceleration of inflation. On the other side of the argument, a rate hike wouldn't open the Strait of Hormuz, nor would it likely damp AI enthusiasm. Wednesday's decision will be a much closer call than first thought, and as always, what the Fed chairman has to say will be just as important to Wall Street bets on their September meeting.

6:58Michael McKee, Bloomberg Radio. All right, Michael, thank you. And company news, NVIDIA is in talks to provide financing to help open AI's big data center project. We get the details with Bloomberg's John Tucker. John, good morning. And good morning, Karen. NVIDIA is in discussions to help the creator of ChatGPT lease a$500 billion 10 gigawatt hub in Ohio. A financing guarantee by NVIDIA would highlight the increasingly circular financing behind the AI boom as tech giants fund ever-larger projects that ultimately generate business for themselves. In an exclusive interview with Bloomberg, NVIDIA's Jensen Wong spoke more broadly about demand for all of this.

7:37My guess is that the semiconductor industry is probably going to have to be 10 times larger than it is today over the next decade or so. Jensen Wong has directed billions of dollars into companies throughout the AI supply chain. He's aiming to accelerate the uptake of his products. But investors have in recent weeks, of course, begun to cool on lofty tech stock valuations. they're worried that there's more capacity under construction than future AI services will actually require. In New York, I'm John Tucker, Bloomberg Radio. Thanks, John. And in deal news this morning, shares of Forte Biosciences are up about 40 % in early trading.

8:16The Dallas-based company is being bought by the Netherlands' Argenx for about$2.2 billion in cash. Forte is developing a promising drug for treating vitiligo and celiac disease that could be used to address multiple autoimmune conditions. Well, the rally in Forte's shares, Alexis, pales in comparison to the Shanghai stock market debut of China's biggest memory chipmaker. CXMT surged 466 % to become China's largest onshore listed company. The blockbuster debut follows the second largest initial public offering in China's history. Analysts say it underscores investor appetite for a company viewed as central to Beijing's ambitions to build a self-sufficient semiconductor industry.

9:005.09 on Wall Street. Time 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. German authorities say the suspect in the deadly Berlin Pride attack that killed one person and left 29 others injured was shot and killed by police during a confrontation in a suburb of the city. Abdul Ballot, a German citizen with Lebanese roots, was killed Sunday evening following a search that lasted nearly 24 hours after the attack in downtown Berlin. Police say it started on Saturday when the suspect drove a vehicle into a crowd of people attending a gay pride celebration.

9:39Berlin's Pride Festival is one of Europe's largest LGBTQ plus celebrations. Israeli Prime Minister Benjamin Netanyahu says he still plans to attend the U.N. General Assembly in New York City, despite Mayor Zoran Mamdani's threats to arrest him. Netanyahu on Fox News Sunday. He's fomenting hate. He's supposed to be the mayor of all New Yorkers, Jews, Christians, Muslims, everyone. But he's trying to turn one group against the other, and he's foisting hate and fear. Mayor Mamdani has called Netanyahu a war criminal over the International Criminal Court's warrant for the Prime Minister's arrest. The mayor also says Netanyahu is not welcome in New York.

10:21Several children attending a YMCA summer camp in East Orange, New Jersey, were sickened after they allegedly consumed suspected mushroom-laced edibles. This woman rushed her 12-year-old daughter to the hospital after getting the call from the camp that her child was given drug-laced chocolate by another camper. About 13 children. They, for lack of better words, they look like zombies. It was really sad. Her daughter made a full recovery. East Orange police said the suspect has been identified. No charges have been filed and the investigation remains ongoing. Global News, 24 hours a day and whenever you want it with Bloomberg News Now.

10:58I'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. And three new inductees to the Baseball Hall of Fame. Jeff Kent, who hit the most home runs of any second baseman ever. Andrew Jones, who as a center fielder in Atlanta, won 10 straight Gold Glove Awards. And Carlos Beltran, who hit 400 career home runs and had over 300 stolen bases. Meanwhile, in Milwaukee's 11-2 route of Colorado, the Brewers' Jacob Misurowski struck out the first seven batters, 12 of the first 13. 3M golf in Minneapolis, 21-year-old Jackson Coivum shot 2 ,500 par and won by three.

11:35That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots. Visit 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. And the U.S. paused an almost two-week run of strikes against Iran for a third straight night. This is the Islamic Republic signaled it was refraining from any retaliatory attacks and now talks with Oman over the Strait of Hormuz.

12:24Meanwhile, Israeli Prime Minister Benjamin Netanyahu said he will press President Trump to keep a constant watch on Iran's nuclear program when the two meet this week. He spoke to Fox News Sunday morning futures. If he can do so without returning to intense military fighting, that's fine. Why not? But one way or the other, they have to end their nuclear program. And with a deal or without a deal, that has to come to an end. And that is really Prime Minister Benjamin Netanyahu there. We want to get the very latest on the situation in the Middle East with Stuart Livingston Wallace, head of Bloomberg's Middle East coverage.

12:58And Stuart, good morning. Well, we appear to be seeing a legitimate pause in the fighting here after 13 straight nights of attacks between the U.S. and Iran. So have we entered a new phase in the war? Good morning, Karen. I mean, the short answer is it's very hard to tell. I mean, I can tell you anecdotally for those of us in the region, I think there's been a great sense of relief over the weekend in particular, that this sort of fairly relentless 13 nights of hostilities seems to be appalled. Whether that will last is a different matter. I mean, history would suggest probably not. And it's certainly true to say that the U.S.

13:33military presence in the region is no different today than it was a week ago. They're not withdrawing any troops or ships in particular. However, I mean, I think in order to answer that properly, we need to look at two things. Number one is what is the motivation? At least in part, it seems to be that after 13 consecutive nights of attacks on Iran and then these retaliatory attacks, there was no sense that Iran's ability to threaten and attack ships in Hormuz or around Hormuz had diminished in any sense. And then there's a more speculative element that, you know, the cost, not just the dollar cost, but in terms of munitions, was getting very, very steep.

14:08And we know that they're having to take munitions out of stockpiles in Europe and in Asia. And I think the big concern is around the defensive munitions, because they're having to use an awful lot of those just because of the scale of the drones and the missiles coming across from Iran. So all of that combined suggests that they're going to try the diplomatic track again, but there we don't have a great deal of visibility about just what is being discussed. Yeah, and Mike Waltz, the U.S. ambassador to the U.N., seemed to deny that there was any problem with the stockpiles of air defenses like the Patriot missile when we heard him speak.

14:40But he also said the president was really giving diplomacy, quote, some space. So does that mean there is hope that talks are making some progress? Yeah, I mean, I think so. They have some sort of framework there in terms of this memorandum understanding that they signed in June. And okay, fair enough, that fell apart pretty fast. But that is at least the basis of what the red lines for either side are. I mean, I think in terms of the priorities, particularly for the region itself, it is Hormuz. Yes, the nucleophile is very important, along with the proxies and the missile program and so on and so forth.

15:13But the short term, and particularly for the global economy, it's all about Hormuz and getting that oil out. And now you have the second front that's opened along the Red Sea, the Bab-El-Mendez Strait, which is a rather like Hormuz, but the other side of the Arabian Peninsula. That is still an unresolved question. Although, again, there we've not seen any hostilities since Saturday. 48 hours is not a great deal of time to say it's all ended. We suspect it probably hasn't ended there either. But again, the pressure is on, I think, to get some sort of resolution and get that oil and gas flowing again.

15:42And they're still not seeing necessarily a free flow through the Strait of Hormuz, despite this pause in fighting. There's still a bit of a backup there, some ships being turned around still. Yeah, I think a great deal of nervousness about transiting through there, because again, so many ships have been attacked over the last couple of weeks or so, and no sense that Iran's ability to continue attacking, if it wants to, has gone away. But now there's the additional complication of the other strait, as it were, the Bab-Amen-Leb Strait. And again, that really constrains shippers' ability to navigate stuff.

16:19So if you want to get, for instance, oil out of the western bit of Saudi Arabia on the Red Sea off to Asia, pretty much you're either going to go through that strait and then you risk an attack from the Houthis, or you go and knock through sewers along the Mediterranean and then around the southern tip of Africa. Now that adds weeks and weeks and weeks to each journey. So the costs increase, the delivery time increases, and the effective capacity of the global shipping fleet shrinks. Yeah, and just because there's a pause between Iran and the U.S. doesn't mean the Houthis are going to end whatever they have going on with Saudi Arabia.

16:52And there was a little bit of skirmish over the weekend. Yeah, exactly. I mean, the one potential glimmer of hope there is that the Houthis seem to be framing it in terms of a more localized issue that they have with Saudi Arabia over Saudi Arabia's attacks on Sanaa, the capital. So in theory, if you can resolve that, it's not necessarily, at least as far as the Houthis are saying, a publicly linked to the Iran war. Of course, we all know there is an obvious link there, but potentially that could get resolved on a separate track. But again, I don't want to give anyone the sense that it's a completely separate issue.

17:26Obviously, it's not. Okay. And when it comes to any diplomacy talks that are going on, should we still be looking at Pakistan leading the way, Pakistan and Oman? Yeah, and I think others probably as well. I mean, we know Qatar's been involved on and off. I'm sure there are others because, again, the priority for the region is to get that oil and gas flowing because it's so important for their revenue. And as you know, they're all trying to transform their economies. That is a multi-trillion dollar program that's going to take place over several years and already has been going on. If they haven't got the revenue coming in, that makes it much more difficult for them to do that.

18:01Now, they have very deep pockets and very big reserves. So there's no sense that, you know, it's crisis right now, but clearly it makes their lives far more difficult if they don't have that steady stream of revenue. 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 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121.

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