US & Iran Shun Diplomacy, 100% Drug Tariffs Plan

0:00So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business. IBM. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it.

0:36That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person. How you need it. Optum is helping make healthcare work as one for everyone. Learn more at business.optum.com. 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.

1:11On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index. You approve the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less.

1:52That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. 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. is widening its airstrikes on Iran in an 11th straight night of attacks. Iranian media report the U.S. struck a military site near the northwestern city of Tabriz.

2:36U.S. Central Command has confirmed attacks on Iran's command centers, launch sites, and air defenses near the Strait of Hormuz. Tehran has responded with strikes on facilities in Kuwait and Jordan. And Iran-backed Houthi militants in Yemen are threatening to impose a maritime blockade on Saudi Arabia in the Red Sea. President Trump says he's not concerned about that. So far, it hasn't happened, might happen. But we take care of things. If something like that happens, we take care of it. You know, we've done that with the Houthis before, and we haven't heard from them in a while. President Trump spoke alongside Lebanon's President Joseph Ayoun in the Oval Office.

3:13We get more from Bloomberg Middle East managing editor Paul Wallace. Things seem to be escalating. The focus is very much the Strait of Hormuz. The U.S. is saying its attacks on Iran are designed to make Tehran reopen the strait and stop attacking ships going through this vital waterway. But as I said, there's just little sign that Iran is going to back down. We know and we've seen this from the start of this war in late February that Iran has a very high pain threshold. In the meantime, Bloomberg's Paul Wallace reports the Pentagon announced an army sergeant from Queens is thought to have been killed in an attack in Jordan last Friday.

3:5728-year-old Angel Rampersad had been listed as missing. Iran's semi-official mayor's news agency reports there are currently no negotiations happening with the U.S., but an exchange of messages is possible. Meanwhile, Nathan, lawmakers got a new price tag for the war in Iran so far, and Bloomberg's Amy Morris reports from Washington. Defense officials had told lawmakers the cost of the war was around$29 billion, a figure that many analysts assessed as being too low. In his appearance before the Senate Appropriations Committee, Defense Secretary Pete Hegseth answered Senator Dick Durbin. Do you have a new estimate about what the war has cost us so far in this, the fifth month of the first year of this war in Iran?

4:39Senator, the estimate we have as of today is$37.5 billion. And that represents the cost of the war through what period of time? Through September 30th. And Hegseth says they're looking for$21 billion for munitions, part of a$67 billion supplemental funding request. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. There's plenty of reaction to this new price tag. In a special edition of Bloomberg's Balance of Power from Capitol Hill, we spoke with Republican Senator Rick Scott of Florida. It's a trade-off, right? Nobody wants to go to war, but we don't want them to have a nuclear weapon to kill us.

5:12I've got kids and I've got grandkids and I want them to kill a nuclear weapon. I'm sure you're in the same position. You want your family killed by nuclear weapons. So it's going to cost us money. And along with Republican Rick Scott, we got this reaction from Democratic Virginia Senator Mark Warner. This was a war of choice. The president never made the case to the American people. It's dreadfully unpopular. We want to replenish those troops, and I do. Take it from the funds that have already been appropriated that are sitting in basically the budget at DOD. And you can catch our full conversations with Senators Mark Warner and Rick Scott in all our high-profile discussions on our video hub on the Bloomberg Business app.

5:51Nathan, it is the morning after primary elections in Arizona, in which 75 % of votes counted, Trump-backed conservative Andy Biggs has won the Republican governor's race over fellow Congressman David Schweikert, 72 % to 15%. That sets Biggs up for a showdown with Democratic incumbent Katie Hobbs in November. Schweikert gave up his seat in Arizona's first House district to run for governor. Democrats now see that as a key target in their bid to take control of Congress. In that race, Republicans got behind former Arizona Cardinals kicker Jay Feeley with nearly 50 % of the vote. The Democratic race is still too close to call, but with 77 % of votes counted, former State Representative Amish Shah leads one-time news anchor Marlene Galan-Woods 42-33%.

6:3653 percent. In New Jersey, Karen, Governor Mikey Sherrill says about 6 ,600 people who identified themselves as non-citizens were registered to vote in 2023 and 24. Sherrill says it was due to a software error in the state's motor vehicle system. In the case of this error, some individuals indicated that they weren't citizens and weren't eligible to vote, but the software registered them anyway. New Jersey Governor Mikey Sherrill says she learned of the problem last week and directed her chief counsel to open an investigation. The disclosure is fueling increased scrutiny of voting by the Trump administration.

7:13President Trump is pushing Congress to pass legislation to address what he claims is widespread electoral fraud. We get more from Bloomberg's Miles Miller. There's a ton of pushback on the Hill for folks to have to use their IDs in order to vote, but it It gives the Trump administration a lot of ammunition that this majority blue state is disclosing that there has been an issue where non-citizens have voted. It's Bloomberg's Miles Miller, and Republicans say the incident is evidence that Congress should pass the Save America Act. In other news this morning, Nathan, the Associated Press is reporting President Trump has approved an agreement with Saudi Arabia that could potentially provide the kingdom with uranium enrichment capability for its civilian nuclear program.

7:59The deal is expected to last 30 years and is also expected to involve U.S. firms in developing the program. President Trump is threatening big costs for generic drug manufacturers, Karen, if they don't move production to the U.S. Bloomberg's John Tucker joins us with that story. John. And Nathan, Trump said in a social media post, generic drug manufacturers are going to have two years to move production to the U.S. or face a 100 % import duty. This will all start in August of next year. The tariffs will then double to 200 % the following year. And ultimately, it may be the American consumer who's going to feel the impact.

8:35The planned tariffs would raise costs for manufacturers who already operate on pretty thin margins, risking higher prices and potential shortages for the generic treatments that account for more than 90 % of U.S. prescriptions. It's unclear how forcing companies to make more medicines in the U.S. will help bring prices down, given the lower costs of labor and manufacturing in established locations like India. I'm John Tucker, Bloomberg Radio. All right, John, thank you. Let's turn to the markets now. Our futures are lower ahead of some key tech earnings. Today we hear from almost 30 companies, including Google Parent, Alphabet, and Tesla.

9:12Bloomberg's Tom Busby has more on what to expect from Alphabet. The key for investors, any evidence, really any indication that the company's billions and billions of dollars invested in artificial intelligence may finally be paying off. It also needs to show that advertising revenue at its core search engine unit can weather the impact of AI on the search business. Bloomberg Consensus calls for revenue of$117.02 billion and earnings per share of$2.90. Tom Busby, Bloomberg Radio. All right, Tom, thanks. Ahead of those tech earnings, shares of Supermicro Computer are surging pre-market up more than 16%.

9:49The artificial intelligence server maker issued preliminary results saying its backlog hit a record on new orders in the quarter of more than$60 billion. Supermicro also says its gross margins will be in the range of 15 % to 17%. That is almost double its prior estimate.

10:10Time 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. Parts of the Northeast are in cleanup mode after strong storms rolled through the area Tuesday. With more, here's Bloomberg meteorologist Craig Allen. We just had our third severe weather event in just four days over the eastern quarter of the nation. And the worst of it yesterday was about 50 miles either side of I-95. from D.C. to New York City and Boston at various times of the day. Two hard-hit states were New York and New Jersey, and a tornado watch was, in effect, elevated to a warning in several suburbs of New York City as severe thunderstorms spawned funnel clouds.

10:53And the National Weather Service will be investigating these areas today to see what actually caused the damage and the intensity. Bloomberg meteorologist Craig Allen. New York Mayor Zoran Mamdani said the city does not have the ability to arrest Benjamin Netanyahu. The Israeli Prime Minister plans to come to New York for the UN General Assembly in September. Mamdani said the U.S. federal government should enforce the International Criminal Court's arrest warrant instead. And I want to be equally clear. Benjamin Netanyahu is not welcome in New York City, nor is any other war criminal at large.

11:29However, President Donald Trump said Netanyahu will not be arrested while in the U.S. The ICC issued an arrest warrant for Netanyahu in November of 2024, accusing him of war crimes and crimes against humanity. But the U.S. is not legally bound to enforce its warrants. Health officials say a fifth person has died in New York City's Legionnaires disease outbreak that has sickened at least 72 people. The city's health department has found Legionella bacteria in 34 cooling towers across 33 buildings, all of which have been cleaned, but officials still have not identified the source of the outbreak.

12:05The health department says no new patients have reported symptoms in the past 10 days. Eight people remaining hospitalized. 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 our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. A pitcher's duel in Philadelphia. The Dodgers top the Phil's 2-1 on a Max Muncy home run. Justin Robleski at the win is now 11-2. Zach Wheeler took the loss. He's now 10-2. FIFA rankings out after the World Cup. Norway went from 31st up to 19th in the world.

12:43The U.S. stayed at 16th. It's estimated about 60 million tuned in in North America for the World Cup final with a worldwide audience estimated at about$2 billion. 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. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English.

13:20Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index. You approve the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., Member FINRA, and SIPC.

14:03Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. The Bloomberg Sustainable Business Summit returns to Singapore on July 22nd. Our fifth annual Asia Pacific Summit will explore how business and finance leaders are shaping the next phase of globalization by strengthening resilience and driving a multi-speed energy transition across Asia's diverse markets. Join us for solutions-driven discussions and networking opportunities. Thank you to our participating sponsor, Burrito Renewables. Learn more at bloomberglive.com slash SBS dash Singapore.

14:43coast 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 little and insight to tit for tat attacks between the u.s and iran and this morning the u.s may be expanding the scope of its strikes deeper into iranian territory and president trump is downplaying the chance of further talks. I will tell you they want to desperately meet and until they're ready to meet in a meaningful way we have no interest. And that was President Trump in the Oval Office alongside Lebanon's president.

15:18Joining us from Istanbul this morning is Bloomberg Middle East breaking news editor Patrick Sykes. Patrick get us up to speed on some of the breaking news and the scope of the U.S. attack so far. Good morning. Morning yes obviously the U.S. operation has been focused on Iran's southern coast along the Persian Gulf, with a view to restricting its ability to threaten the Strait of Hormuz. But increasingly, we're seeing strikes moving deeper into the country. We've had them as far as kind of the far northeast of the country, but the latest were in Tabriz in the northwest, one of the biggest cities in Iran, hitting a military site there.

15:56That's the kind of location that we saw being hit in the height of the conflict in kind of March-April time, because it's a big base for missile operations, but it's obviously less connected directly to the Strait of Hormuz situation. What does that mean in terms of how Iran could potentially respond? Is there scope for Iran to widen its attacks further against the US? Yeah, indeed. I think it's just another sign of the escalatory mode that we seem to be in at the moment. I think Iran has been the latest side to substantively escalate the stakes with that move by its allies in Yemen, the Houthis, earlier this week to announce the blockading of Saudi ports.

16:44What I think we're going to be watching now is are there any confrontations that come about as a result of that blockade? Are there shipping companies that try to defy that ban and therefore end up on the receiving end of fire, potentially, from the Houthis? That will be key to watch. And then more broadly, obviously, Iran continues to target those U.S. bases around the region. I think we can expect that to continue. The way it might go up a gear is if Iran expands that to more civilian infrastructure, critical infrastructure, more power plants, in particular desalination plants as well, beyond those core military targets.

17:25Well, as we continue to watch these hot attacks continue, Patrick, in our last minute here, we heard President Trump say that Iran is desperate to return to talks. Are we seeing evidence that that is the case? No, in short, we're seeing messaging from both sides that they're more prepared to escalate than de-escalate. We had the Iranian interior minister in Pakistan yesterday, but hadn't heard anything about the outcome of those talks. Pakistan, of course, is a mediator in the conflict. But just an hour or so ago, we heard the ministry saying that Iran had no new message, that there were no negotiations as such going on.

18:06That's partly an issue of semantics. Negotiations for them means, I think, sitting around the table in Geneva, whereas messages is something a bit less formal, a bit less direct. But for now, no, on the diplomatic front, we're not seeing any sign of a breakthrough. 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.

18:51Plus, 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.

19:27This 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. In 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.