US Strikes Targets in Iran; Russia Tells US to Evacuate Kyiv

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1:42Bloomberg 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, the ceasefire between the U.S. and Iran once again looks fragile this morning. overnight the U.S. struck Iranian vessels in the Strait of Hormuz and other targets, and Iran's semi-official Tasnim news agency says the Islamic Revolutionary Guard Corps shot down a U.S. drone and fired at an American fighter jet in Iranian airspace. All this hours after President Trump suggested on social media that talks to extend the truce and reopen the strait were, in his words, proceeding nicely.

2:21Secretary of State Marco Rubio addressed the situation during his trip to India. The president's not going to make a bad deal. He's just not. This issue, no one has done more and no one has been more serious about the threat of nuclear Iran than President Trump has been. Secretary of State Marco Rubio speaking to reporters in New Delhi. We get more from Bloomberg's Paul Wallace in Dubai. We've had Marco Rubio this morning since those strikes. Again, talking of progress, he's saying that the U.S. and Iran are still inching towards a deal. He says it's going to take a few more days in all likelihood.

2:54there's no guarantee they can get over the line there's still a lot of details they have to work out and bloomberg's paul wallace reports iran's supreme leaders raising the pressure as well in a written statement mojda bahamini warns that the middle east will no longer be a shield for american bases well nathan israel is carrying out new attacks as well lebanon's state-run news agency reports an israeli airstrike killed 12 people in a village in the becca valley of eastern Lebanon. Israeli Prime Minister Benjamin Netanyahu had authorized more intensive strikes targeting the Iran-backed Hezbollah militant group.

3:29The Israeli military is not commenting on this specific attack, but says it is targeting Hezbollah infrastructure in eastern Lebanon. And there are new developments this morning, Karen, in the Russia-Ukraine war. Russian Foreign Minister Sergei Lavrov has called Secretary of State Marco Rubio, advising him to evacuate U.S. citizens and diplomats from Kyiv. Tony Halpin leads Bloomberg's Russian economy and government team. Russia is signaling it's stepping up attacks because the war isn't going very well for Vladimir Putin. The front line is not really moving in Russia's favor despite the spring arrival of better weather that would signal an intensification of Russia's offensive.

4:06Ukraine has managed to blunt that and in some areas has even managed to push Russia back a little bit. Ukraine is embarrassing President Putin by continuing a very wide level of strikes in Russia, using drones, attacking refineries and factories. And last weekend, there was a very large-scale attack in Moscow itself, which brought a lot of criticism from Muscovites that their government wasn't really defending them, and this war is going very badly from their point of view, and why is it still going on? Bloomberg's Tony Halpin says more than 16 months of diplomacy from the Trump administration have failed to reach a breakthrough between the two sides.

4:41Well, turning to domestic politics, Nathan, this is a big day in the race for control of the Senate in November. Republicans in Texas are headed to the polls to end a bitter and drawn-out runoff election between four-term incumbent John Cornyn and State Attorney General Ken Paxton, who picked up President Trump's endorsement just last week. Cornyn says he still has what it takes to win. Well, I think I can help maintain this Senate seat in Republican hands. I won in 2020 by 10 points. Ken Paxton, as you know, is a flawed candidate. He's got scandal that follows him everywhere. And Republican Senator John Cornyn appeared on Fox News.

5:22Paxton settled state securities fraud charges in 2015 and was impeached and acquitted in 2023. And his wife filed for divorce during his Senate campaign. Cornyn beat Paxton by about one percentage point in the March primary, but neither reached the 50 % to win the nomination. Whoever wins tonight will face Democrat James Tallarico in November. Karen, let's turn now to the world of sports. New York Knicks fans are partying like it's 1999 this morning. For more, let's bring in Bloomberg sports reporter John Stash. Good morning, Stash. Good morning, Nathan. Since that year, those fans have endured some very bad Knicks teams.

6:01Well, now they've got a very good one. A team that keeps winning by lopsided scores when Game 4 in Cleveland ended. The Knicks won by 37. Believe it, Knicks fans, for the first time in 27 years, the New York Knicks are going to the NBA Finals. The dream season continues. And hopes of ending a decades-long championship drought are very much alive. ESPN had the call after a second straight series sweep. Knicks will bring an 11-game winning streak to the Finals, which will begin a week from tomorrow. Much more coming up in sports. John Stash, Bloomberg Radio. All right, John, thank you. We turn to the markets now where futures are higher as we begin the holiday shortened trading week.

6:37The Dow Jones Industrial Average at a record high. The S &P 500 coming off eight straight weekly gains. And Karen, Kevin Warsh is beginning his first full week as chairman of the Federal Reserve. Bloomberg's John Tucker joins us with more on the new Warsh era. John. And he's got his work cut out for him, Nathan, with President Trump dead set on lower rates. Bond investors are betting Warsh will focus on fighting inflation. And that pretty much rolls out a rate cut. Naben Segal is with BlackRock. The market's expecting a hike. I think some of the tailwinds in the U.S. economy certainly suggest a strong economy.

7:14There's AI CapEx. Warsh assumes leadership is a growing number of other Fed officials abandon their easing bias. With Iran war unleashing the biggest inflation surge since 2023, Traders are pricing and the Fed is virtually certain to start raising rates by December. The two-year Treasury yields the most sensitive to Fed policy expectations climb to as much as 4.14 % Friday. That's the highest in more than a year, although this morning Treasuries are catching a bid. In New York, I'm John Tucker, Bloomberg Radio. All right, John, thank you. Well, Pope Leo is adding his voice to a heated debate over the extent to which governments should regulate artificial intelligence.

7:50In a landmark address to the Catholic Church, the Pope said the powerful tool requires rules to protect human dignity and the common good. Artificial intelligence needs to be disarmed. The word is strong, I know, but deliberately chosen because this moment needs words capable of attracting attention, awakening consciences, and indicating paths forward. The Pope says AI needs to be freed from monopolistic control, shifting away from using it to achieve geopolitical or commercial gains. Well, staying in Rome, Karen, Ferrari has unveiled its first fully electric car. Five-seat model costs$640 ,000.

8:32It hits 62 miles an hour in just two and a half seconds. But Ferrari shares are going in reverse this morning. They're down more than 6%. Suggests investors may have been disappointed with the car's look.

8:47Time 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. Protesters clashed with federal agents outside an ICE facility in Newark, New Jersey, amid reports of inhumane conditions. Governor Mikey Sherrill and other elected officials joined demonstrators to demand better care for the detainees. Some family members say their loved ones are not receiving critical medication and pregnant women are being ignored. The governor, who's calling for the facility to be shut down, said she was turned away.

9:21We've been working with ICE to get into the facility. I was just denied that this morning. I was hoping actually, well, we certainly will, and that's what I've committed to doing is continuing to try to do that. The facility, Delaney Hall, is privately run with about 300 detainees. The head of the World Health Organization warned that the rapidly growing Ebola outbreak in the Democratic Republic of Congo and Uganda will get worse before it gets better. More than 900 cases and more than 220 deaths have been reported in the Congo. Dr. Darian Sutton. There are many people who are skeptical of the aid that is coming in.

10:01There have been extreme limitations in foreign aid that has been ongoing. That leads to a lack of trust within the community with public health workers. And so now just throwing money at it is becoming exceptionally difficult as it's causing a lot of fear, panic and turmoil within the community that's already plagued by conflict as well as displacement. Dr. Darian Sutton spoke on ABC's Start Here podcast. A major turning point for residents in Southern California who've been forced from their homes due to a damaged chemical tank. Authorities say there is no longer a risk of a large explosion. Of the 50 ,000 Garden Grove residents originally ordered to evacuate, officials say about two-thirds have now been allowed to go home.

10:39Global 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.

10:52Time now for the Bloomberg Sports Update. It's brought to you by Flushing Bank. And here again is John Stash Hour. John, good morning. Good morning, Karen. Shocking enough to win 11 consecutive playoff games. It only happened three times before, but even more so to win almost all of them in blowout fashion. But that's the way it's been going for the Knicks for now more than a month and more of the same game four in Cleveland. Deuce McBride hits the three-pointer. Hart pushes out to Shannon. Fakes a three. Sidestep. Another three-pointer. Puts it in. Knicks are red hot once again. Alvarado tries a three.

11:25Towns on the flush. ESPN the calls. That was part of a 20-0 first half run. Knicks 130, the Cavs 93. They've won the 11 in a row by an average of 24 points. The three series-clinching road wins have been by an average of 39 points. Everyone contributing, including Josh Hart. This team is a very selfless group. And at the end of the day, we know we're willing to sacrifice our own individual performance or stats or accolades for the betterment of the team. And when you have not just one, two, or three, but a whole team of those kind of guys and that kind of character, it puts you in a position to be successful.

12:07Off to the finals. Knicks await the West. Winners Spurs and Thunder tied at two of Game 5 tonight at OKC. The hockey much closer. Carolina and Montreal, a second straight overtime game, a second straight 3-2 win for the Hurricanes. They now lead the series 2-1. Baseball's first no-hitter since 2024. The Houston Astros won 9-0 to Texas. Japanese rookie Tatsuya Imai went the first six innings, and the last two were thrown by a limber Santa in his major league debut. The Yankees on an Anthony Volpe two-run single, ninth inning, won 4-3 at Kansas City, their second straight ninth inning win. They gamed on Tampa Bay, who lost a wild one at Baltimore, 9-7 in 13 innings.

12:44The Mets bats quiet again, a 7-2 home loss to Cincinnati. John Stash, I'm here at Bloomberg Sports. Karen, Nathan. Stay with us. More from Bloomberg Daybreak coming up after this.

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14:39That's public.com slash market. Add paid for by Public Holdings. Brokered services by Public Investing, member FINRA SIPC. Advisory services by Public Advisors, SEC Registered Advisor. Crypto services by zero hash. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. 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 on what appears to be a tenuous ceasefire this morning between the U.S. and Iran. The U.S. says it has carried out defensive strikes on Iranian vessels in the Strait of Hormuz and other locations, even as President Trump touts progress on an interim deal.

15:25Secretary of State Marco Rubio says the Strait remains a sticking point. I need to reopen what's happening there. It's unlawful. It's illegal. It's unsustainable for the world. It's unacceptable. It was Secretary of State Marco Rubio. Joining us this morning is Jumana Bersechi, the anchor of Bloomberg Horizons or Bloomberg Middle East correspondent. Great to have you with us, Jumana. Can you catch us up on what's been happening in just the last 24 hours? It seems like there have been strikes and counterstrikes to some extent. Good morning. Yeah, I would describe it as a skirmish on the streets overnight, which is surprising given the background to all of this, as we know, is that the negotiations are continuing.

16:01But what we do know about the strikes, CENTCOM put out a comment this morning saying that they were acting in a self-defense capacity. The U.S. targeted specifically missile launchers alongside some mine laying vessels on the Iranian side. Now, the Iranian media this morning also quoted the Iranian air defense system as having being activated and said that they had shot down or targeted rather a U.S. drone and an unmanned fighter jet. So this has all gone down overnight in the region. Now, I will just say that neither side are showing an inclination of taking this one step further. We haven't had follow-up comments from Iran.

16:41There's been no official commentary about exactly what happened with those U.S. strikes. And at the same time, you know, the diplomatic track continues. And we know that the Iranian Speaker of the House, Mohamed Galibaf, alongside the Iranian Foreign Minister Abbas Arakshi, are actually in Doha, in Qatar today, to continue with those diplomatic discussions. So in the background, there is still hope somewhat of a breakthrough. I do understand that there was a written statement from Iran's Supreme Leader Khamenei warning that the Middle East will no longer be a safe haven for American bases. Does that complicate things as far as the behind-the-scenes talks go?

17:21Yeah, I mean, you also have to take it with a pinch of salt because the Supreme Leader has not been seen since the war started, and that's been three months now. So he tends to issue these messages on Telegram. And it is also unclear whether he's writing them himself. But it should be noted that this is the start of the Eid for many of the countries in the Islamic world, in the Arab world. It's a long holiday period. So he called on, in his words, Islamic and Arab countries to unite and at the same time issued this threat to the U.S. saying they will no longer have a safe haven for mischief and the establishment of military bases in the region.

17:58but the Iranian supreme leader, even his father, is known for this type of rhetoric. The takeaway is that we shouldn't be reading too much into it, but it is one of those sort of customary threats that Iran will issue from time to time. The bigger picture here is those indirect negotiations that are still going on and these sticking points, there's still many sticking points that remain between Iran and U.S. and whether we can actually paper over those differences in the very short time frame that Trump seemed to have suggested over the weekend. Just 30 seconds left, Jumana. But even if we do get something like a 60-day extension, which we understand is part of this framework negotiation, how would that help with nuclear negotiations?

18:41Well, it depends how many concessions the U.S. are willing to give up in phase one in order to get the street reopened. And this has been the sticking point and why Trump also, I think, faced so much backlash back home because there was a suggestion that the U.S. was giving up too much for Iran to reopen the straits before they've even gone on to the thornier topic of what happens with the nuclear file, their nuclear ambitions, and of course the fate of that highly enriched stockpile. Overnight, Trump's saying that the stockpile will immediately be turned over to the U.S. to be brought home and destroyed, or destroyed in another place, in another acceptable location.

19:15We just don't have the details yet. 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. 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.

19:55It'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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