NATO Summit and Global Geopolitical Tensions

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A, made in NATO. It's Tuesday, july seventh. I'm Daniel Bach for the Wall Street Journal filling in for Luke Margas. And here is the AM edition of What's News, The top headlines and Biness stories moving your world today. Main's Graham Platner is widely expected to pull his candidacy for Senate today, with top Democrats withdrawing their endorsements overnight That's after a woman Platner had been romantically involved with publicly alleged that he sexually assaulted her. He denied the allegation in a video yesterday, saying he would reassess his Senate bid But now, state and national lawmakers are calling for Platner to drop out of the race. Here's Maine's House Speaker Ryan F facto, courtesy of Maine's total coverage. The concerns have been mounting And I think that's I think that's the primary issue here. is the number of revelations about uh Graams past have have accumulated And That is what I think is causing the greatest deal of concern for all of us. The development is set to damage Democrats' hopes in one of the party's most important Senate races this year. steady path for Democrats to gain the four seats needed for a Senate majority includes winning in Maine is the cutoff for any changes to November's ballot. If Platinner withdraws by then, the Democratic Party will have until july twenty seventh to find a new nominee All eyes are on the NASDAC one hundred today with SpaceX set to join. That follows a decision by the index to fast track newly public megaap companies under new inclusion rules Elon Musk's rocket company has been on a wild ride since his IPO last month, racking up a two point one trillion dollars market cap more potential big moves ahead Journal Markets repeporter Kaitlin McCabe says that's key for index tracking funds which have been gearing up for a SpaceX buying spree. So all of the exchange traded funds and mutual funds that track the NASDAQ one hundred had to buy SpaceX shares after markets closed yesterday. And that's because these funds are supposed to resemble the NASDAQ one hundred and track its performance. So they need to be ready for today with SpaceX in their portfolios. So that will likely add some buying pressure to the stock and benefit it in the short term But you can't really extrapolate what that will mean for the stock long term, especially as employee lockup periods end over the next year, and they'll be looking to sell their shares. And Kaitlin says, because SpaceX sold less than five percent of its total shares in last month's public offering invested in market tracking funds will be less exposed to the company than they might think. Despite the fact that SpaceX has a more than two trillion dollars valuation, It won't enter the NSDAQ one hundred, which is a cap weighted index as one of the top components. It'll be treated more like a three hundred billion dollars company. And it'll have an index weight of less than one percent. So if you're an investor and you're worried about SpaceX or not interested in the stock, You're not going have some sort of outsized exposure to it if you own a fund that tracks the NASDAQ one hundred You know, on the other hand, if you want more SpaceX, you might have to consider other ways of getting it like buying the stock outright. And you can find an explainer on what SpaceX means for the NASTAQ one hundred in our show notes Futures for the teech heavy NASDAC are down this morning along with shares in Asia as the Chip led AI rally takes a little breather Shares and Samsung are down about eight percent despite the company reporting a nineteen foold jump in profit for the second quarter shares and fellow, South Korean chip company, SK Heynix are also down around seven percent dragging on the country's main index Analysts did note that this latest correction in Korean stock should be viewed in the context of its recent historic rally, where some investors appear to be cashing in on the CosP's roughly one hundred percent surge in the first half of the year US. listed shares of SK Heynx will start trading on the NASDC one hundred on Friday And speaking of market roller coasters this year, the index tracking small companies, the Russell two thousand climbed more than twenty percent in the first six months of the year Markets reporter Hannah Aaron Lang says that's the best first half performance since nineteen ninety one And it's also because of AI. Small cap indexes have benefited from this frenetic chip stock rally that we've seen kind of across the market. So semiconductor stocks, AI, hardware and infrastructure plays, that's juicing the gains that we're seeing in the Russtsell two thousand and know the SMP smallmall C six hundred for example, but there are some factors that are in favor of small caps specifically right now. So one is that we're in this kind of economic sweet spot. Inflationary pressures have eased following the US Iran peace deal. And we have a labor market that is cooling but not screeching to a halt. We have some hope for maybe holding or cutting interest rates whereas a lot of investors have started to believe that we were really only going to see an interest rate hike this year, if anything. Another thing I should note too, is that there's a bit of AI fatigue on Wall Street right now. This chip stock rally brand so hot and was so extreme that I think there's a sense of folks kind of looking for other opportunities. At the beginning of the year, I talked a lot with investors about kind of market gains broadening beyond the AI race to things like small caps or to industrials, for example. And that scenario, which a lot of folks had been hoping for six months ago, got a bit derailed by the war breaking out with Iran and everything that came after. But now investors are looking beyond the AI investing frenzy and wondering where that next opportunity, that next outperformance in the market is going to come from. And there's some good news for American consumers and workers in the form of two company announcements that came out late yesterday. Walmart is cutting prices on thousands of items to help customers with affordability after years of inflation The largest U.S. grocer is lowering the price of everything from ground beef to Coca Cola to toys The effort drew praise from President Trump, who urged other retailers to follow suit And Japanese automaker Toyota is spending three point six billion dollars to bring production of its top selling midsize pickup the Tacoma back to the US by twenty thirty. The company plans to build a second assembly line at its San Antonio plant adding two thousand jobs. Making more vehicles in the U.S. will help Toyota mitigate a hefty tariff bill in its largest market Coming up we get the latest from the NATO summit in Turkey. Plus what cringy collectibles do you bring home from your travels? Those stories and more after the break AI isn't just changing how we do business, it involves a new kind of leadership. On the season one finale of Tech puential, we trace the through lines across episodes, revisiting powerful insights from executives who are helping redefine technology leadership for the age of AI Learn why tech is now a shared enterprise agenda and how you can drive real, durable value for your organization. Where technology and influence converge, new opportunities can emerge. That's Techfluential, a podcast from Deloitte and Custom Content from WSJ NATO has announced a series of new military projects worth billions of dollars ahead of President Trump's arrival at the summit in Ankara Journal editor Daniel Michels is there And he told us the showcase is an attempt to convince Trump that Allies are stepping up defense spending NATO is trying to signal with these announcements that it is following up on last year's summit in the Hague in the Netherlands when NATO members committed to spending five percent of their economic output on defense and security for NATO. Now they're showing that they're actually spending it, doing deals, getting money out the door and that that will start turning into and other systems that can be used to defend NATO countries, some of these deals are to produce systems and equipment that is really vital, like interceptors. We see in Ukraine now with these devastating Russian strikes, turning the contracts today into actual equipment will take months or potentially years in some cases But these are vital first steps for producing equipment that some of which could go to help Ukraine or to prepare Europe, other parts of NATO for potential conflicts. President Trump arrives in the Turkish capitol later today where he's due to attend a dinner with other NATO leaders and Ukrainian President Vlodymyr Zelensky Iran's revolutionary guuard fired missiles at two commercial ships near the Strait of Hormuz today threatening to disrupt recovering traffic and complicate ongoing U. S. Iran peace talks. The escalation follows threats from the group warning vessels away from a transit route cleared by the U.S. near Oman The journal has reported that the revolutionary guard and those close to it have stood as the biggest obstacle to an agreement Under a memorandum of understanding, the US and Iran agreed last month to a sixty day period of negotiations to reach a final agreement Meanwhile, oil prices are drifting higher following today's attacks Brent crude futures climbing back towards seventy three dollars a barrel and above their pre war levels. In Gaza, Hamas has announced it would dissolve its governing committee in order to pave the way for a UN backed technocratic committee overseen by President Trump's board of peace Speaking from Tel Aviv, Journal reporter Annat Paled says that while the move is mostly symbolic, it aims to show willingness to stick by Trump's peace plan as much of the negotiations have stalled. Hamas is in a tricky situation. so it's really been struck hard by Israel and it suffers from a lack of popularity, lack of funds, and authority in Gaza However, it still is resisting fully disarming, and that's a major sticking point. That's something that was not addressed in the statement it made yesterday. Israel responded by basically calling this a spin, a move that was meaningless. So questions remain about the disarmament of Hamas. That was something that was required by the ceasefire agreement that was reached in october twenty twenty five It's unclear where that's headed. The talks are pretty stuck right now. and that also means that the rebuilding is stuck in Gaza. The Board of Peace said it was aware of the announcement made by Hamas, but it would judge the situation based on, quote actions, not promises And finally, if you're getting ready to jet off or pack up the car for a summer holiday Are you thinking about any collectibles you might pick up along the way If there is one thing journal readers have in common, no matter their travel budget It's the love of tacky souvenirs. I first wrote about cheesy souvenirs back in May in the WSJ Travel newewsletter. I confess that I collect those Starbucks mugs in my travels around the world. One of my favorites is from New York before I even had this job. It's a subway tile Starbucks Cup. That's journal travel columnist, Don Gilbertson After I wrote the newsletter item I was absolutely floored by the reader response. I heard from Hundreds of Wall Street journal readers confessing their cheesy souvenirs, the things they collect in their travels, everything from Christmas ornaments to coasters, to key chains, just everything you can think of, E Charlie Chaplin t shirts. And the trend goes across the newsroom too. Every time I go on holiday, I always try and find a Christmas ornament whenever I'm somewhere new That's our supervising producer, Sandra Kilhoff. And as we traveled, we started buying a coffee mug everywhere that we would go. And Ryan Kanutson, co host of the Journal podcast. if I could go back in time I think I might choose something different like maybe postcards or even magnets, like something smaller that can fit in a shoebox. and doesn't take up an entire cupboard in my house So if you're also partial to a cheesy souvenir, on says there is something deeply satisfying about bringing home a trinket or two to compleiment the hundreds of photos on your phone So, my hot take on cheesy souvenirs, Iignore the haters. Just buy what makes you happy, whether that's a fridge magnet, a shock glass, a golf course pencil. If it makes you happy, who cares what anybody else thinks And as I'll be here in the newsroom and won't be hitting the beach this summer be grateful if anyone wants to send me a senior Frogs t shirt from Cancun A postcard will work fine too or just a note to tell us where you're listening from And that's it for What's News for this Tuesday morning Today's show was produced by Hattie Moyer, our supervising producer, Sandra Kilham And I'm Daniel Bach for the Wall Street Journal. We'll be back tonight with a new show Uill then, thanks for listening This podcast is brought to you by ReliAQuest. Cyber crriminals are constantly attacking. They want your data, they want your identity, they want your innovation. Reli AQuest fortifies your business with agentic deffense, AI that detects, contains and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now, and delivers insights to help them predict what's next Rellyaquest. Aentic deffense for the entnerprise. Learn more at rellyacquuest. com That's R E Li QuST. com