War Causes Market Turmoil; Trump Seeks Oil Security

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1:18For 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. 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 developments in the Middle East. The war has entered a fifth day of fighting and there are no signs of easing.

2:03Israel says it's striking Iranian targets as well as Hezbollah sites in Lebanon as Iran continues to fire missile at Arab states across the Middle East. Saudi Arabia says there was just an attempt this morning on one of its key refineries at Rastanura. The kingdom says there was no damage. We get the latest from Bloomberg Middle East Managing Editor Paul Wallace. This conflict continues and there's no sign of let up from Iran or the U.S. or Israel. The latter two continue to strike Iran heavily and Iran is striking back very intensely against Gulf Arab states. It seems at the moment as if Iran is concentrating most of its power on those Gulf Arab states rather than Israel.

2:44and the likes of the UAE, the likes of Saudi Arabia. The sense is very much that Iran is using its drones now, of which it has far more than it does cruising ballistic missiles to target Gulf Arab states. Bloomberg's Paul Wallace says the State Department has now announced plans to help evacuate Americans who want to leave the Middle East. Well, Nathan, President Trump said the U.S. would provide insurance guarantees and naval escorts to ensure safe passage for oil tankers and other vessels through the Strait of Hormuz. That's not having too much impact on the oil market. Right now, crude is up again.

3:19NYMEX crude oil is at$76.61 a barrel. Brent is at$83.80. Meanwhile, the president said he ordered the attack on Iran because he thought Tehran was about to attack first and that Israel did not force his hand to initiate the air assaults. Trump spoke yesterday at the Oval Office. Based on the way the negotiation was going, I think they were going to attack first. And I didn't want that to happen. So if anything, I might have forced Israel's hand. But Israel was ready and we were ready. President Trump is threatening to cut off all trade with Spain after that country denied the U.S. access to its military bases for the campaign against Iran.

4:00The president says he has already instructed Treasury Secretary Scott Bessent to sever the relationship. I told Scott to cut off all dealings with Spain. they were the only country that in NATO would not agree to go up to 5%. I don't think they wouldn't agree to go up to anything. They wanted to keep it at 2 % and they don't pay the 2%. So we're going to cut off all trade with Spain. A Spanish government official said that the U.S. must respect international trade agreements and the autonomy of private companies. And more world leaders are speaking out about the war. Karen, Canadian Prime Minister Mark Carney is criticizing the U.S.

4:40and Israel for striking Iran without consulting allies or the United Nations. The current conflict is another example of the failure of the international order. Despite decades of UN Security Council resolutions, the work of the International Atomic Energy Agency and a succession of sanctions and diplomatic frameworks, Iran's nuclear threat remains. And now, the United States and Israel have acted without engaging the UN or consulting with allies, including Canada. Canadian Prime Minister Mark Carney spoke earlier in Sydney. And Nathan, in Europe, UK's Chancellor Rachel Reeves says Britain will not make decisions about Iran based on U.S.

5:20trade ties. Speaking to Bloomberg, Reeves explained why the government was not taking part in the strikes on Tehran. When it comes to decisions around using British armed forces to take part in conflicts around the world, it is very important that we judge those on whether it is legal and whether it is the right thing to do. You can't make a decision about whether to get British armed forces involved in a conflict because it may or may not make it more likely to get a trade deal. And Rachel Reeves was speaking of Bloomberg after President Trump criticized Prime Minister Keir Starmer over the UK's limited support.

6:02Let's turn to politics now, Karen, back here in the US. the results are in from the first primary races in the 2026 midterm elections. In Texas, four-term Republican Senator John Cornyn is headed to a runoff with State Attorney General Ken Paxton. The people of Texas made your voices heard. After all the personal attacks, which there were many, and after all the lies, you listened to what John Cornyn was selling and you weren't buying it. And with 88 % of ballots counted, Ken Paxton trails Senator Cornyn by one percentage point, 40.9 to 41.9 percent. Republican Congressman Wesley Hunt received 13.4 percent of the votes, denying either candidate a majority.

6:45That means Cornyn and Paxton will face off again in May. Well, Nathan, in the closely watched Democratic Senate primary, State Representative James Tallarico defeated Congresswoman Jasmine Crockett 53.1 to 45.6 percent. But the vote was marked by confusion in Crockett's home base of Dallas County. Voters there and in at least one other county reported being turned away from polling places due to a rule change that required them to vote at their local precinct. In past elections, they could vote anywhere in the county. A judge extended the voting by two hours, but Crockett says her heart is broken.

7:22We were able to keep the polls open, but I can tell you now that people have been disenfranchised. Congresswoman Jasmine Crockett says the result could hinge on who was or was not allowed to vote in Dallas County. Tallarico also blamed Republicans for the rule change and called for voting hours to be extended. In other key races, Karen, Texas Republican Dan Crenshaw is the first incumbent congressman to lose in the midterms. He fell to conservative state lawmaker Steve Toth 56.3 to 40.2 percent. Another Republican in Texas, Tony Gonzalez, is headed to a runoff with gun rights YouTuber Brandon Herrera.

7:59Gonzalez has faced allegations of an affair with a staffer who later died by suicide. And in North Carolina, a high-profile Senate race is set for November. Former Governor Roy Cooper won the Democratic primary. He will face former Republican National Committee Chairman Michael Watley in what could be one of the most expensive Senate races in the country. Nathan, let's turn to the nation's capital now. Homeland Security Secretary Kristi Noem defended the immigration crackdown during her testimony before the Senate Judiciary Committee. And Bloomberg's Amy Morris reports from Washington. Noem faced bipartisan backlash over the immigration crackdown.

8:36Republican Senator Tom Tillis called for Noem's resignation, citing allegations that she blocked an inspector general from investigating complaints against DHS. As of today, I'll be informing leadership that I'm putting a hold on any on-block nominations until I get a response. And in two weeks, if I don't get a response, I'm going to deny quorum and markup in as many committees as I can until I get a response. Tillis accused Noem of trying to hit her immigration detention quotas rather than concentrating on dangerous, undocumented immigrants. Noem denied interfering with any investigations. In Washington, Amy Morris, Bloomberg Radio.

9:13All right, Amy, thank you. There are new developments in the Jeffrey Epstein investigation. The top lawyer at Goldman Sachs, Kathy Rumler, says she's accepted an invitation to testify before the House Oversight Committee on April 21st. The Justice Department's files show Rumler accepted tens of thousands of dollars of gifts from the late sex offender and offered advice on protecting his reputation in the years before he died. Rumler announced plans to resign from Goldman last month. Her spokeswoman says she did nothing wrong and did not know about Epstein's crimes. The Oversight Committee is also requesting interviews with six other people, including Microsoft co-founder Bill Gates and Apollo Global Management co-founder Leon Black.

9:49The panel's asking for their testimony in May. Let's turn to the markets now, Nathan, and futures. They have turned higher. S &P futures now up a quarter percent, and this is after yesterday's losses on Wall Street. The S &P 500 did fall almost 1 % yesterday, but at one point it was down 2.5%. Goldman Sachs chairman David Solomon says he's been surprised by the, quote, benign reaction in financial markets to the Middle East conflict. He told the Australian Financial Review Business Summit in Sydney it will take weeks to understand more about the situation. Well, it's been anything but benign in South Korea, Karen.

10:25The KOSPI index there suffered its biggest one-day crash on record, plunging another 12 percent today, following a 7.2 percent drop yesterday. The sell-off is a reminder of how swiftly market exuberance can turn into anxiety. Insatiable demand for memory chips had helped push the KOSPI up nearly 50 percent at its peak this year. Nathan, Minneapolis Fed President Neil Kashkari said the war in the Middle East is clouding the picture on interest rates. Speaking at the Bloomberg Invest Conference in New York, Kashkari says it's too soon to see the inflation impact from the conflict. The labor market is pretty good, a little bit getting softer, but generally speaking, we're around the bands of our dual mandate.

11:08And so I felt like policy was in a pretty good place and we have the luxury of just letting it gradually glide back to neutral. Now we need to see with this new shock, potentially new shock, hitting the global economy, how long is the effect and how big is the effect. Minneapolis Fed President Neil Kashkari had penciled in one interest rate cut this year, but he says the attacks on Iran make him less certain about that. Programming note here now, Karen, as we've just seen this past weekend, markets may close on Friday, but the world doesn't. And that is why we're bringing you a new live radio and TV show.

11:42Bloomberg this weekend looks beyond the daily headlines to the bigger themes driving politics, business, and culture. Join David Gura, Christina Ruffini, and Lisa Matteo for smart conversations and in-depth interviews that help make sense of the week that's been and what comes next. Get Bloomberg this weekend live, Saturdays and Sundays from 7 a.m. Eastern on Bloomberg Radio, Bloomberg Television, and the Bloomberg Business app.

12:07And it's time 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. A federal judge ruled that New York City can continue its congestion pricing program. Judge Louis Lyman found that the Trump administration's attempt to kill the program was arbitrary and capricious. After the decision, New York Governor Kathy Hochul posted a short video online celebrating the ruling. The state of New York has prevailed in all the attacks that have been unleashed by the Trump administration on congestion pricing won again in court.

12:43The ruling is a financial win for the Metropolitan Transportation Authority, which can keep operating the program and use its revenue to modernize the transit system. The Trump administration disagrees with the court's decision and is considering an appeal. A Georgia man who gave his teenage son the gun he's accused of using to kill two students and two teachers at a high school has been convicted of second-degree murder and involuntary manslaughter. Colin Gray also was found guilty Tuesday of all other charges in the September 2024 shooting at Appalachee High School, northeast of Atlanta. Prosecutors said Gray gave his son access to a gun and ammunition, despite sufficient warning that Colt Gray would harm and endanger other people.

13:30New York Mayor Zoran Mamdani and Governor Kathy Hochul unveiled the first neighborhoods to get free daycare for two-year-olds under the two-care program starting this fall. The first four communities that will receive 2 ,000 2K seats include Washington Heights and the Rockaways. Mayor Mamdani also responded to a local New York City radio host reference to him as a radical Islam cockroach. I am not ashamed of who I am. I am not ashamed of my faith. I am not ashamed of being the first Muslim mayor in the history of our city. And there's no amount of racism that will change the way in which I lead or the commitment that I hold to each and every New Yorker in the city.

14:14Senator Chuck Schumer of New York condemned the radio host comments in a social media post. Schumer says it's a disgusting display of bigotry and Islamophobia. Global news, 24 hours a day and whenever you want it. With Bloomberg News Now, I'm Michael Barr, and this is Bloomberg. Karen. Thanks, Michael. Time now for our Bloomberg Sports Update. And for that, we bring in John Stashauer. Thanks, Karen. Four teams ranked in the top 20 in college basketball all lost. Number nine, Nebraska lost by 20 to UCLA. Tenth-ranked Texas Tech, beaten by TCU. Number 14, Kansas fell to Arizona State and 16th-ranked Alabama, beaten by Georgia.

14:50Team USA with an exhibition game against the San Francisco Giants getting ready for the World Baseball Classic. USA won it 15-1. Atlanta Braves outfielder Jerickson Profar, who served an 80-game suspension last year, will now serve a 162-game suspension for PED violation. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. So 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.

15:34Not 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. Adobe Acrobat Studio, your team's home base. Collaborate within a shared PDF space. You've got your docs, your plans, your specs. And then invite the crew to build what's next. They talk off the teamwork. You can update it render. They think that this design could be a contender. But when somebody wonders, what's the next step? AI helps you finish the rest. Bolts are tight. Now your plans are fine. Run a smoother business when you're all aligned.

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16:42risk and volatility. Monthly income is not guaranteed. Prepare by BlackRock Investments, LLC. 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 with the war with Iran now into a fifth day. Fighting continues to spread across the Middle East with little sign of let up. President Trump is promising the U.S. will ensure safe passage of oil through the Gulf as Secretary of State Marco Rubio continues to defend the president's decision to attack. The bottom line is this.

17:17The president determined we were not going to get hit first. It's that simple, guys. We are not going to put Americans' troops in harm's way. Secretary of State Marco Rubio in Washington. We're joined now by Bloomberg's Middle East breaking news editor, Patrick Sykes. And Patrick, if you could just catch us up on some of the latest headlines that have been coming out of the Middle East. Good morning. Morning. Yeah, We saw just a few minutes ago a New York Times reporting that Iran's intelligence ministry had reached out indirectly to the CIA to talk about potential terms for ending the war. That would be really de-escalatory if it's true.

17:49Though it is a slightly surprising place for an offer like that to come from. Obviously, it's been the foreign ministry and Iran's diplomats that have been involved in most of the outreach so far and this temporary leadership council as well. Other than that, I think the main thing is this strike we had a few minutes ago on the Saudi oil refinery, just underlining that the risks are still very high for energy assets in the region, and the Gulf countries still very much being pulled into this conflict. With this report of the attack on, or the planned attack at least, on Saudi Arabia's oil refinery, that puts more attention, doesn't it, on President Trump's promises, assurances, that the U.S.

18:35would be able to provide safe passage of oil through an insurance program. How would that work exactly? I think that's a big question for many still in the industry. In theory, it sounds great, right? We'll handle the insurance, which is exactly what's gone up in price because of these events, and we'll escort you militarily with our naval assets in the region. I think the practicalities around the insurance are still very much to be clarified. And on the escort side, you know, that might provide some peace of mind. I think for many, even that wouldn't be enough. And the other thing is that you're still looking at a serious drop in volume of transits if that's happening, because, you know, they're only going to be able to do those controlled naval transits at a very steady pace with all the kind of precautions that they involve.

19:26So it's still not going to be anything like a return to normal. You mentioned the headline from the New York Times about apparent outreach from Iran's spy agencies looking for a possible off-ramp for this war within the first day or so. Who would be providing that off-ramp, given that Israel has been targeting the very room where experts are trying to name a new supreme leader? Indeed, and I think the intelligence ministry itself has also been targeted. I mean, I think at a time like this, when the U.S.-Israeli strategy has kind of been to try and split up the Iranian state and break down those chains of command, it does remain to be seen kind of how authoritative any offer like that would be.

20:15They're obviously hoping, we assume, for a kind of pliant constituency within Iran that would be willing to make a deal, end the war, and resolve all of those contentious issues from nuclear to missiles that have brought us to this point. But as we've seen from the rhetoric and obviously the missiles that are still flying, there's still plenty of officials in Iran that clearly think that they can win this war. They can at least last out the U.S. will to continue it. And for them, it's an existential moment. Thank you for this once again, Patrick. Appreciate the update. That is Patrick Sykes, Middle East breaking news editor for Bloomberg News with us this morning from Istanbul.

20:58Want to turn now to domestic politics because we've had the kickoff of midterm election season with key primary races in Texas, North Carolina, Arkansas as well. One of the big ones for four-term Republican Senator John Cornyn is headed to a runoff with State Attorney General Ken Paxton. For more, let's bring in Bloomberg News editor-at-large Marty Shanker. And Marty, I think we knew this was going to be a hotly contested race. What does this result tell us about what we can expect in November? Good morning. I don't know what you can say about November, but what we can say is that it's going to be one of the more expensive Senate runoffs in history.

21:43John Cornyn already spent$70 million to fend off Ken Paxton, and he just eked out a very narrow win, but still faces a runoff 80 days from now. And it's likely to be acrimonious and of national importance. As it already has been. Did the other candidate in this race, the other main candidate, Wesley Hunt, play spoiler here or does this point to a bigger vulnerability for the incumbent? been? Well, he definitely drew over 12 percent of the vote, which prevented either one of the other two candidates from getting the 50 percent needed to get the nomination itself. So he did play spoiler, but he won't be there for the runoff in May.

22:37So it will be a Paxton-Cornyn race, and it's likely to be extremely nasty. And whoever does come out of that race is going to face James Tallarico, an upstart on the Democratic side, fending off Jasmine Crockett. That kind of ended a bit acrimoniously as well, didn't it? Yeah, although not nearly as much as the Republicans. And don't forget that Donald Trump did not endorse a candidate on the Republican side. On the Democratic side, there were voting difficulties because they changed the rules at the last minute. And it was many Democratic voters were turned away from the polling booths. And it'll be interesting to see whether Jasmine Crockett makes that an issue or whether she just for the sake of unity endorses Tellurico and the Democrats can move on against the race against what they hope is a weaker Ken Paxton.

23:39Does this point to an issue that could crop up again in November, this rule change? Absolutely could. And it's not just in Texas. The redistricting efforts in a variety of states could cause some confusion at the polling place. But at the same time, the turnout in Texas and in South Carolina was extremely encouraging for Democrats. There was huge lines. Voters seemed very motivated, and that's probably a positive sign for the Democrats. 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.

24:25Eastern 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. I'm Karen Moskow.

25:02And 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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