Xi Warns Trump of Potential Conflict over Taiwan; Senate Confirms Kevin Warsh

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1:46Good morning. I'm Karen Moscow. And I'm Alexis Christophorus. Here are the stories we're following today. Alexis, we begin with President Trump's three-day visit to China. The president called Chinese President Xi Jinping a friend, But his warm words were in stark contrast to Xi, who opened a bilateral meeting today with words of caution. Let's start our team coverage with Bloomberg's John Tucker.

2:13President Xi of China, welcome President Trump to the Great Hall of People in Beijing this morning. And from Trump's perspective, the trip is going swimmingly well. It's an honor to be with you. It's an honor to be your friend. and the relationship between China and the USA is going to be better than ever before. But beyond the pomp and pageantry came a warning from Xi. He said if the Taiwan issue is mishandled, the two nations will experience collision or even clashes, pushing the entire China-U.S. relationship into a highly dangerous situation. The two leaders spoke for nearly two and a half hours at the Great Hall.

2:49China has opposed a pending U.S. arms package to the island democracy that Beijing considers its territory and asked the U.S. to clarify that Washington doesn't support Taiwanese independence. Trump will attend a state banquet tonight. His next opportunity to make public remarks, Xi and other diplomats will be hanging on every word. I'm John Tucker, Bloomberg Radio. Thanks, John. President Trump was accompanied by a slew of business leaders on his trip to China, and Xi Jinping signaled China's moving toward greater openness during his meeting with those executives. Bloomberg's Stephen Engel continues our team coverage from Beijing.

3:26Xi Jinping met with a group of these high-powered American businessmen and women who were here. Among the people we saw on the state broadcaster, Elon Musk, also Tim Cook, Kelly Ortberg of Boeing, and also Jensen Huang, among those who were ushered into a room with Xi Jinping. And Xi Jinping did pledge to open up further the China market to those businesses. Bloomberg's Stephen Engel added that U.S. beef exporters may be among the first winners from today's summit. China renewed import licenses for hundreds of U.S. beef plants. Well, Alexis, there's still no signs of an end to the war in Iran as it enters its 76th day.

4:05This morning, a U.K. naval group reported a commercial vessel off the coast of the United Arab Emirates was taken by unauthorized personnel. It is now bound for Iranian waters. The incident happened just as there appears to be an uptick in vessels transiting the Strait of Hormuz this week. And just days after, Iran laid out an updated process for ships seeking to cross the vital waterway. And, of course, oil and gas prices, Karen, have surged since the onset of the war. The average price of gas is now above$4.51 across the country. Lawmakers on Capitol Hill are watching gas prices and the impact on inflation.

4:40Bloomberg's Amy Morris reports from Washington. Minority leader Hakeem Jeffries blames the war in Iran for the rise in inflation and blames the Trump administration for the war in Iran. Billions of taxpayer dollars are being wasted has resulted in life becoming more expensive for the American people, particularly as it relates to the dramatic increase in gas prices. House Speaker Mike Johnson says those gas prices are temporary. Because if we get the Strait of Hormuz win, we get the Strait of Hormuz reopened, that will alleviate a lot of pressure with gas prices and other things in the economy.

5:11Johnson also downplayed Trump's comment that he doesn't think about Americans' financial hardships when dealing with the war in Iran. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you to politics overseas. UK Prime Minister Keir Starmer is heading for a divisive battle with a leading cabinet member said to be preparing to challenge him for the top job. And we go to London and get the very latest with Bloomberg's Ewan Potts. Ewan, good morning. Alexis and Karen, it's less than two years since Keir Starmer won an election landslide election victory promising to stop the chaos in UK politics.

5:44Well, here we are again. Allies of the Health Secretary Wes Streeting say he's likely to quit his post this week and launch a bid to replace Starmer as Labour leader and therefore Prime Minister. Starmer's former deputy Angela Rayner has also indicated today that she's preparing for a bid for the top job. The Prime Minister says he will fight any challenges with his Chancellor Rachel Reeves warning today a leadership contest would plunge the UK into quote chaos. In London I'm Ewan Potts, Bloomberg Radio. All right thanks Ewan. European health officials say the respiratory virus behind a deadly outbreak on a cruise ship is showing no sign of mutating to become more contagious.

6:22One health official says the Hantavirus' genome has been sequenced and is similar to strains that caused outbreaks in South America in the past, and that's likely where the first passenger was infected before boarding the Hondias. The outbreak has now been linked to 10 cases, including eight confirmed infections and two probable cases with three deaths. Let's turn to the markets now, Alexis, where futures are higher. Following yesterday's tech-fueled rally, The NASDAQ surged 1.2 percent. Brent Schutte is the chief investment officer at Northwestern Mutual Wealth Management. You know, people talk about the market ignoring right now the conflict.

6:59Actually, if you look a step deeper, it's not ignoring the conflict. This is where the market has narrowed and we're back to the AI theme driving everything. And that's the only part of the market that's actually going up while other parts are languishing. Brent Schuette at Northwestern Mutual Wealth Management notes the Philadelphia Semiconductor Index is up almost 70 percent so far this year. Wow. And of course, Karen, we've got shares of Cisco on the rise this morning, surging more than 18 percent here in early trading. The company delivered a better than anticipated sales forecast. It also announced plans to cut thousands of jobs.

7:30Cisco says its restructuring plan is designed to further improve its position in the AI economy. AI chipmaker Cerebris Systems raised$5.5 billion, Alexis, in one of the largest tech initial public offerings in years. The company priced its shares above the marketed range at$185 each, giving Cerebris a market value of about$40 billion. The IPO drew orders for more than 20 times the number of shares available. Cerebris will trade on the NASDAQ under the symbol CBRS. Well, Kevin Warsh has been confirmed as the next chair of the Federal Reserve. The 54 to 45 vote was the slimmest confirmation margin ever for a Fed chair.

8:10Michael McKee, Bloomberg News International Economics and Policy correspondent, has more on Warsh. So the question now becomes, when can they get the paperwork done and get him sworn in? Jay Powell is going to be the Fed chair until Friday midnight. And after that, any time we could see Kevin Warsh put his hand on the Bible and take the oath. Bloomberg's Michael McKee says the vote was so close because Democrats fear Warsh will bend to President Trump's demands to rapidly lower interest rates. Alexis soccer legend Ronaldo is expanding his empire ahead of the next World Cup. The world's first billionaire soccer player has bought a stake in the international streaming channel Live Mode TV.

8:51The move marks the latest deal by Ronaldo, whose net worth is estimated to be about$1.4 billion. His broad business portfolio includes a CR7 brand, hotels, gyms, as well as a media group.

9:06509 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. Talks between New York City's transit system and Long Island railroad workers have hit a snag over disagreements on cash payments versus wage increases. The Metropolitan Transportation Authority and five LIRR unions have been negotiating for months with a federal mediation board on salary increases. A strike as early as this Saturday would force thousands of commuters onto the island's already congested roadways.

9:42These LIRR riders spoke to ABC7. I have to work every day, especially on the weekend, so I don't know how I'm going to get there. A lot of the health care workers that I work with are definitely impacted, and the hospital's making alternate arrangements for them to get to and from work. New York Governor Kathy Hochul has said that a strike would be terrible for everyone involved. A judge has ruled that a Utah mother who wrote a children's book about grief after her husband's death will serve life in prison without parole for his murder. Corey Richens was convicted of poisoning her husband in 2022.

10:17Judge Richard Merzurek. A person convicted of those things is simply too dangerous to ever be free. A judge also found her guilty of insurance fraud along with the jury. The South Carolina Supreme Court unanimously ruled to overturn Alex Murdoch's murder convictions. Prosecutors said Murdoch killed his wife and son in 2021 to distract from financial crimes. The justices took issue with a court clerk who was accused of improperly influencing the jury. AP has called Denise Powell the winner of the Democratic primary in Nebraska's second congressional district. Powell led her closest opponent, State Senator John Kavanaugh, by 2.1 percentage points.

11:01She will face Brinker Harding, an Omaha City Council member endorsed by President Trump in the general election. Global News, 24 hours a day and whenever you want it. We're the 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. Overtime in both the NBA and Stanley Cup playoffs in Detroit. The Pistons led the Cavs by nine with under three minutes left in regulation. Cleveland scored the last nine, went to overtime, and won game five in Detroit, 117-113. Cavs lead series 3-2.

11:37Colorado Avalanche trailed Minnesota 3-0, rallied to force overtime, and then beat the Wild 4-3. They win the series 4-1. The 108th PGA Championship tees off today at the Aronament Course in Pennsylvania. Scotty Scheffler, the defending champ. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. Is passive investing costing you more than you think? Active ETFs aim to beat the benchmark, while passive ETFs just settle for them. Embrace an active strategy that helps you build stronger portfolios. Invest with a global leader in active fixed income ETFs with JPMorgan Asset Management.

12:15Visit jpmorgan.com slash getactive to learn more. JPMorgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. This communication is issued by JPMorgan Distribution Services Incorporated, member of FINRA. On June 10th, Bloomberg Invest is back in Hong Kong. We look at the role Hong Kong plays between China and the world as major powers compete. and markets realign. As global investors rethink risk, we'll explore the forces driving Asian demand and the future of private capital. Catch exclusive interviews with top newsmakers, plus a live recording of Bloomberg's Odd Lots podcast.

12:53Visit bloomberglive.com forward slash invest Hong Kong to learn more. Supporting sponsor Deutsche Bank.

13:03Coast 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 President Trump went into his summit with Chinese leader Xi Jinping, touting the friendship between the two leaders. It's an honor to be with you. It's an honor to be your friend. and the relationship between China and the USA is going to be better than ever before. But his warm words were in stark contrast to Xi, who opened a bilateral meeting warning the president of a potential conflict if the Taiwan issue is mismanaged. And for more on the president's visit, we're joined by Bloomberg's Anne-Marie Hordern in Beijing.

13:45Anne-Marie, good morning. Let's start with the latest. We're starting to get the U.S.'s release, its readout of the president's meeting with Xi. What does the White House have to say about the progress that's being made. Well, certainly the White House wants to focus on the deals in terms of the progress that's been made between Washington and Beijing when it comes to trade. They discussed an increase in purchases of agriculture, so big win for beef and soybeans potentially. Also, the U.S. readout talks about how Xi Jinping expressed interest in purchasing more American oil. What is so telling to me, though, is that what is missing from the U.S.

14:20readout. And that's when it comes to Taiwan, which is interesting because that really took center stage during the meeting when while the two were sitting down at the Great Hall of the people, we have very sharp warning from Xi Jinping expressed through China state media, a readout on the Chinese side when Xi Jinping said the Taiwan issue is the most important issue in the U.S.-China relationship. And if mishandled, the two nations will experience collision or even clashes, pushing the entire relationship into a highly dangerous situation. So that was a very sharp warning from China. While the meeting was taking place, it is clear the White House wants a focus on trade and technology, and Taiwan is something they do not want to address.

15:06Yeah, and what did that tell you about how Xi Jinping sees his position? Does he feel he is in a stronger position and can go in right away, making some demands of his own? Well, I think Xi is coming into this very assertive, especially when it comes to Taiwan. But I think it's important to understand the context of what is going on in terms of Taiwan arms sales in the United States. In December, the Trump administration greenlit an$11 billion arms sales package. There's another package that is waiting in the wings. And it's not unprecedented for presidents in the past to not greenlight another Taiwanese arms package before a meeting with Xi Jinping.

15:49Because they do not want to create unnecessary problems in terms of the dynamics of the relationship between Washington and Beijing just before a massive meeting. The real important question is going to be what happens when the president returns to Washington. How does he talk about Taiwan? Does he talk about the fact that Xi Jinping probably asked him to continue to delay this arms package? This is going to be very telling. And then, of course, whether or not the U.S. in the end does green light that$14 billion. This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

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17:07I'm Karen Moscow. And I'm Alexis Christophorus. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak. On June 10th, Bloomberg Invest is back in Hong Kong. We look at the role Hong Kong plays between China and the world as major powers compete and markets realign. As global investors rethink risk, we'll explore the forces driving Asian demand and the future of private capital. Catch exclusive interviews with top newsmakers, plus a live recording of Bloomberg's Odd Lots podcast. Visit BloombergLive.com forward slash invest Hong Kong to learn more.

17:45Supporting sponsor Deutsche Bank.