Stocks Soar After Trump Cancels Threatened Strikes on Iran

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0:32President Trump has a new nominee for intelligence director that could help defuse a fight with Congress. Plus, Trump calls off threatened attacks on Iran, sending markets soaring. And Citigroup is using the blockchain to make it easier for wealthy clients to trade shares of private companies. The pitch that Citi is making is this structure is regulated and so investors know what they're buying. It's Thursday, June 11th. I'm Alex Osalev for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:09SpaceX this afternoon disclosed that it has sold the more than 555 million shares in its IPO at$135 apiece, giving it a valuation around$1.77 trillion. And investors have lined up. The journal has learned that the asset manager BlackRock has put in an order to buy at least$5 billion worth of SpaceX shares. Other big investment firms have also submitted eye-popping orders. These companies often buy large stakes and IPOs, but these orders are much bigger than normal. The journal understands that individual investors alone requested over$70 billion worth of SpaceX shares. Investors typically aim big with their orders for an IPO, knowing that they're unlikely to get their full requests when a company is in high demand.

1:52The record-breaking offering has now officially raised$75 billion for the company. Elon Musk is now poised to become the world's first trillionaire. And one of Musk's friends and a longtime investor in SpaceX stands to get the second biggest payday. Antonio Gracias joined the board of SpaceX in 2010. He also served on the Tesla board for 14 years. Gracias and his firm Valor Equity Partners will own 6.7 % of SpaceX's Class A shares, a$68 billion stake. Gracias and Musk's relationship goes beyond business. The two have partied together, the Wall Street Journal has reported, and they have traveled together with their families to Europe, the Caribbean and Africa.

2:31Gracias was also a groomsman at the wedding of Musk's brother. In other banking news, we're exclusively reporting that Citigroup is establishing a new way for its wealthy and institutional clients to trade shares of private companies. That is, companies that aren't publicly traded. The key part of the system, it runs on a blockchain. The bank said it is in discussions with some of the largest private companies to get involved, and it hopes that other Wall Street banks will also join its venture. Gina Hebe, who covers banks and finance for the journal, says that currently there are limited ways to get access to private companies.

3:04Investors can use special purpose vehicles or exchange-traded funds, but in those structures it can sometimes be a little bit less clear what you're actually owning, and they can come with fees. This structure is regulated. It works through something called a depository receipt, which are essentially securities that allow investors to buy stakes in foreign companies. These are authorized by the companies. And so investors know what they're buying and they know the ownership that's coming with that. Gina says that Citi says that this is also beneficial for the companies involved. The pitch that Citi is making to companies is that this is going to open up a whole new world of foreign investment.

3:43Eventually, they hope to expand to U.S. investors as well. this is supposed to help companies raise money from abroad. For seniors, which Medicare plan they choose may have a major impact on whether they can get nursing home care when they need it. A new federal investigation shows that Medicare insurers varied a lot in how often they rejected requests for patients seeking nursing home stays, as well as for long-term care hospitals and inpatient rehab facilities. The Medicare insurers with the biggest enrollments, UnitedHealth Group, Aetna, and Humana, were among the most likely to initially refuse access.

4:18For these companies, denial rates were around 13 % for nursing home care. For long-term care hospitals, initial rejection rates were as high as 80%.

4:30Today, the European Central Bank raised interest rates for the first time in almost three years, lifting its key rate to 2.25 % from 2%. The decision makes the ECB the first major central bank to tighten monetary policy in response to the jump in energy prices caused by the war in Iran. Markets widely expected this move, and investors are betting the ECB will raise rates at least once more this year. Inflation remains a major issue for the Federal Reserve as well. The latest data point, prices charged by American producers went up again in May, rising 1.1 percent. That was more than analysts expected.

5:05The Producer Price Index, or PPI, is used to help calculate another inflation metric, the Personal Consumption Expenditures Price Index. That's the Fed's official gauge. Coming up, more details on Trump's decision to nominate Jay Clayton, the federal prosecutor and former SEC chairman for Intelligence Director. That's after the break.

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6:00Turning to the war in Iran, which has heated up this week. At the White House today, Trump said he had an agreement with Iran to end the war, but final details needed to be completed. Earlier in the day, he had threatened to strike Iran tonight, and hours later, he said he was calling off those strikes. Trump says a, quote, finalization of documents should get done in the next few days, and that Vice President J.D. Vance could be in Europe for a possible signing ceremony over the weekend. Trump said he wouldn't attend a ceremony to sign an agreement. He said that the Strait of Hormuz would open when a deal is signed.

6:31An Indian official said today that three Indian sailors were killed in a U.S. operation to enforce the blockade of Iran. They're the first reported deaths from the American blockade. U.S. Central Command said that the military had fired on a ship called the Cedebello yesterday after the oil tanker failed to comply with American instructions. The U.S. military has targeted three oil tankers carrying Indian crew members in the Gulf of Oman this week. The Indian Foreign Ministry said attacks that are happening must stop. The U.S. Embassy in New Delhi said it was in contact with the Indian government on the issue.

7:04Stocks surged after President Trump said that he was canceling strikes on Iran planned for tonight. All three major indexes finished sharply higher, with the Nasdaq adding more than 2.5 percent. The Dow rose 930 points. Treasury yields retreated and oil prices fell, with Brent crude futures dropping almost 3 percent to about$90 a barrel. Today, President Trump said he would nominate the U.S. attorney for the Southern District of New York, Jay Clayton, to be the next director of national intelligence. Clayton's nomination could defuse a standoff with Congress over who would oversee the nation's spy agencies.

7:39Democrats have criticized Trump's plan to install his close ally, housing official Bill Pulte, as the acting director of national intelligence, saying he's unqualified and would weaponize the job. Hours before the announcement, the House had rejected Trump's plan to temporarily reauthorize a crucial spying tool, Section 702 of FISA. Many Democrats said they wouldn't back extending FISA until Pulte is pulled. The House vote meant the federal surveillance program, Section 702, could expire tomorrow for the first time in nearly two decades. Journal National Security reporter Yoko Kubota joins me now from the Capitol.

8:15Yoko, a major reason the House rejected today's vote was because lawmakers are unhappy with President Trump's nomination of Bill Pulte as acting director of national intelligence. It's still early, but do we have a sense of whether Clayton's nomination will change things? It's a great question. We are trying to figure it out. The Senate Majority Leader, John Theuan, you know, he is on the Republican side. He praised this election of Clayton and he said this is a qualified professional. and he was saying that the Senate would try to get him considered as soon as possible. But meanwhile, some Democrats that I've spoken with, it's a little bit unclear.

8:50Senator White House was saying that anyone is better than Bill Pulte. So that suggests perhaps it's a matter of timing how quickly Clayton can be named to take on that position. But Chuck Schumer, the minority leader, was still insisting that Pulte should not be in that position, even as acting. So it's a little bit unclear how things will turn out, but that's the immediate reaction that we were able to get. Either way, though, the House did vote today, and that vote may have consequences given that Section 702 is set to expire tomorrow. So does today's vote definitely mean that Section 702 will go dark?

9:25Section 702 has always been contentious because it allows for warrantless spying of Americans. Now, in 2008, when the previous statute expired, there was a period where there was a lapse. So it's like the first time in 20 years. And there is an intelligence court approval that came in March. And that basically said the government can continue surveillance activities under the law until March 2027. So it would indicate that the government can continue these activities. But again, because we haven't really seen for so many years what happens when that lapse takes place, We're trying to all figure it out.

10:02So what are tech companies and telecom companies expected to do under this law? And will they have to stop doing that if it does, in fact, expire? So these are companies like, say, AT &T or Google or Meta that provides communications technology that both foreigners and Americans can use. When these companies receive a government directive, they have to hand over data or information that they're being asked for. And this happens without any warrant. The concern is that when the program expires on Friday, would the companies still respond to these directives? Senator Warner, who is the Democratic ranking member of the Senate's Intelligence Committee, he was saying that there was a lot of uncertainties around what exactly would happen.

10:45And that's why lawmakers have always tried to not get into this territory of having it expired. A lot up in the air still. I suspect we'll be hearing from you pretty soon, Yoko. That was Journal National Security reporter Yoko Kubota. Thanks, Yoko. Thank you. And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Vancey and Danny Lewis with supervising producer Tali Arbel. I'm Alex Osala for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

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