Massie Joins List of GOP Lawmakers Ousted by Trump

0:00The thing about AI for business, it may not automatically fit the way your business works.

0:05Daniel Bach:At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slashed repetitive tasks, and freed thousands of hours for strategic work. Now we're helping 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. The president notches another GOP win as Trump critic Thomas Massey loses in Kentucky. I mean, we stirred up something. There is a yearning in this country for somebody who will vote for principles over party. Plus, a global sell-off in bonds starts to bring down stock markets.

0:49Daniel Bach:And the EU finally agrees to move forward with its U.S. trade deal. It's Wednesday, May 20th. I'm Daniel Bach for The Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today. Now my focus is on advancing the president's and the party's agenda to put America first and Kentucky always. President Trump's handpicked House candidate, former Navy SEAL Ed Galrine, has defeated longtime GOP antagonist Thomas Massey in their Kentucky primary. Journal-Congressional reporter Siobhan Hughes says it's another sign of the president's iron grip on the Republican Party and potential consequences for lawmakers who defy him heading into the midterm elections.

1:33Trump had opposed Massey because Massey voted against his$3.4 trillion Big Beautiful Bill. Massey didn't like the cost of those tax cuts and spending increases. Massey also opposed the war in Iran, Trump's tariffs, and perhaps most Personally, Massey led the charge to enact legislation forcing the release of files related to convicted sex offender Jeffrey Epstein, an issue that Trump had initially dismissed as a hoax. Massey fought back, assembling a coalition of young people opposed to the war in Iran, libertarians, fiscal conservatives, make America healthy again moms, small farmers. But in the end, it wasn't enough.

2:15He faced an onslaught of$19 million in advertising, most of it courtesy of hawkish pro-Israel groups. I would have come out sooner, but I had to call my opponent and concede, and it took a while to find Ed Galrine in Tel Aviv. In the end, it was the most expensive House primary in American history. But this may not be the final word.

2:43As Massey addressed a crowd of his adoring supporters who cheered 2028 and Massey for president, Massey said, I started running a campaign and we have ended up with a movement.

2:56Daniel Bach:In other votes yesterday, Trump aligned Georgia Congressman Mike Collins will face former football coach Derek Dooley in a runoff next month after neither captured enough votes to advance in the GOP Senate primary. President Trump didn't endorse a candidate in the challenge to Democrat John Ossoff for his Senate seat. Democrats have already notched some key wins in the red-leaning state ahead of the midterms that will determine control of Congress. And to that end, three Democrats in Pennsylvania, backed by Governor Josh Shapiro, won their primaries yesterday as the party looks to flip the state's four swing districts in hopes of capturing a House majority in November.

3:30Daniel Bach:In the fourth swing district, Scranton's mayor was unopposed for the Democratic nomination. Meanwhile, just days after the president celebrated the loss of Senator Bill Cassidy in a Louisiana GOP primary, Cassidy voted in favor of advancing a resolution that would limit Trump's ability to wage war in Iran without congressional approval. The procedural ballot passed by three votes. The senator hadn't supported similar measures in seven previous votes going back to the start of the war, while he was in the midst of a re-election campaign where Trump urged voters to oust the politician who had voted to convict Trump in his second impeachment trial over the Capitol riot.

4:08Daniel Bach:In a statement on X, Cassidy said the White House and Pentagon have left Congress in the dark over the Iran conflict. War power's resolutions in both chambers have inched closer to passing in recent days, where Republicans have narrow majorities, though Trump has largely ignored Congress in his overseas military strikes. Coming up, a look at the regulatory probe into suspicious oil trades worth$800 million. And the EU agrees to move forward on a U.S. trade deal. Those stories after the break.

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5:14Daniel Bach:Just moments before President Trump called off strikes on Tehran's energy infrastructure in late March, A flurry of off-hours trades came in with more than$800 million worth of oil futures changing hands in a matter of moments. And now we're exclusively reporting that officials are trying to gauge whether an insider traded on that information or leaked it to someone who could. For more, I'm joined by Journal Finance Editor Alex Frangos. Alex, what do we know about these trades and what regulators are looking at? The Commodity Futures Trading Commission, the CFTC, which is a big regulator in Washington that looks over trading of oil futures and things like that, identified a bunch of firms that they want to find out more information about, firms that traded ahead of the president calling off the strikes.

5:57Daniel Bach:Oil prices plunged when that happened. And so these firms made as much as$5 million in one case,$10 million in another. And so the question is, did they have inside information or were they just trading based on other signals? Now, we should note the firms being looked at haven't been accused of wrongdoing, and it couldn't be determined why officials are interested in them. But what are they saying about the timing of these trades? So what the firms are saying is they're pointing to this news report from news website Semaphore that came out around that time that pointed to the White House maybe considering moving in a more peaceful direction at that point.

6:33Daniel Bach:The other thing is some of these firms are quantitative firms. They're not manually looking at news headlines. They're responding to all sorts of inputs coming from the market and, you know, they're trading all the time. And one of the things that the regulators could be looking at is, was this burst of trading unusual for these firms or was it kind of what they normally do? Now, all of this comes, of course, as Trump and his allies are facing scrutiny over a range of well-timed trades related to White House policy. Yeah, this comes in this context of a bunch of situations where Trump has posted something on social media or said something that caused markets to move radically one way or the other because he was shifting his tone about the war and what seemed like examples of traders in oil markets and prediction markets and other places trading ahead of that information.

7:22Daniel Bach:And so people want to know, is somehow the information getting out out of the White House? The White House has told its employees, absolutely do not do this. This is not good. Obviously, we have the administration through the CFTC and others looking at this. But there's Democrats on Capitol Hill are really concerned that there is someone kind of taking advantage of White House policy, though nothing has been proven in that realm. That's Journal Finance Editor Alex Frangos. Alex, thank you. Thanks. European lawmakers have reached a provisional deal to remove some import tariffs on U.S. goods, avoiding new 25 percent tariffs on EU car imports.

7:59Daniel Bach:The agreement comes after President Trump threatened the car duties if the trade deal wasn't in place by July 4th. The deal eliminates tariffs on U.S. industrial goods and reduces duties on some seafood and agricultural products. For the EU, tariffs are being hiked by as much as 15 percent on most goods imported into the U.S. And bond markets are finding their footing today after a weeks-long sell-off in government bonds hit fresh records yesterday. The 10-year Treasury note is a key benchmark for mortgage rates and other borrowing costs, and it soared to almost 4.7 % yesterday, while the yield on 30-year treasuries climbed to a new 18-year high.

8:35Daniel Bach:The Journal's Jason Douglas says anxious investors are driving yields higher. What investors are responding to is the war and the risk that this prolonged shutdown of the Strait of Hormuz has a much more longer-lasting effect on energy prices that pushes up inflation around the world, which tends to make bonds less attractive, which tends to cause central bankers to jack up rates to bring inflation back down. On top of that, in a couple of places, we have some fiscal worries. The UK has some political turmoil. It's not quite sure what's going to happen to the prime minister there. In Japan, the government here is talking about possibly a bit more borrowing to support households through the energy shock.

9:11And in the US, of course, there's still this big fiscal deficit and big spending plans there. So these kind of add to investors' fiscal concerns.

9:19Daniel Bach:And while many retail investors have been piling into stocks of late, Jason said this bond route shouldn't be ignored. Rising bond yields do tend to take the wind out of stock market rallies. Higher borrowing costs tend to, you know, eat into corporate earnings and make it harder to make profits. I mean, in a world where energy prices are going up, it certainly isn't good news for households and businesses. We have seen stocks come off a little bit in the last couple of days, nothing too drastic, but it's certainly something that stock investors want to keep an eye on. A march higher in bond yields doesn't necessarily equal good news for stocks, far from it.

9:50Daniel Bach:The S &P 500 notched its first three-day decline since March yesterday, where tech and industrial stocks took hits, with both sectors down more than 1.5 percent this week.

10:06Daniel Bach:Last-minute talks to avoid a strike at the world's largest memory chip maker have failed. Samsung's management rejected union demands for workers to get a bigger share of the company's bumper AI profits, including removing a 50 % bonus cap. The strike is set to begin tomorrow and last through the 7th of June. Alibaba is aggressively ramping up its tech ambitions with the release of a new artificial intelligence chip and an updated AI model. The company says the new chip delivers three times the performance of its predecessor. And shares in a handful of old-school companies making components vital to the AI build-out have become major and somewhat surprising beneficiaries of the AI boom.

10:44Daniel Bach:Journal reporter Jared Mitovich says that includes a 175-year-old glass manufacturer, a heavy machinery giant, and Japan's leading maker of toilets. So I think the strangest one probably has to be Toto. It's this Japanese toilet maker. They've also got this other line of business in advanced ceramics, and they're now totally building it out, trying to embrace it as their next area for growth, because the advanced ceramics are actually in high demand among semiconductor companies and those involved with the AI buildouts. And Corning is one of the companies that's also made strides in kind of pivoting what was historically a business focused on glass manufacturing.

11:23Daniel Bach:They were involved with Thomas Edison's light bulb, but they're also now diving into fiber optics and the sort of cables that are necessary to connect these data centers and bring them to life. They're now a favorite partner of hyperscalers like NVIDIA and META. And Caterpillar is the literal pick and shovel trade right now. They're well known for their yellow bulldozers and dump trucks and equipment. And now they're literally building up the world of infrastructure that can support the intensive needs of artificial intelligence. And that's it for What's News for this Wednesday morning. Today's show was produced by Hattie Moyer.

11:58Daniel Bach:Our supervising producer is Sondra Kilhoff. And I'm Daniel Bach for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

12:34and remaining steadfast in the pursuit of lasting performance. Nuveen. Invest like the future is watching. Visit nuveen.com slash future to learn more. Investing involves risk. Principal loss is possible.