Musk 'Disappointed' in Trump Tax Bill; Nvidia Earnings On Tap
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Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, we'll have more on the markets in a minute, but first we're getting new pushback on President Trump's giant tax cut bill, and it's coming from Elon Musk. The billionaire has announced he is stepping back from his Department of Government Efficiency effort, but he says the bill undercuts his efforts to slash government spending. Musk spoke with CBS News. I was, like, disappointed to see the massive...

spending bill, frankly, which increases the budget deficit, not just decrease it, and it reminds the work that the Doge team is doing.

Elon Musk questioned whether the bill can be both big and beautiful. In his words, quote, I think a bill can be big or it can be beautiful, but I don't know if it can be both. The legislation includes an array of tax cuts. It is now going to the Senate after narrowly passing the House last week. And you can hear Elon Musk's full interview on CBS Sunday morning. It airs this Sunday at 10 a.m. Wall Street time on Bloomberg Radio.

Nathan Elon Musk is going to have to face a lawsuit over his work to slash government jobs and spending. More than a dozen Democratic state attorneys general brought the case, saying Musk wielded illegal power as the public face of Doge. U.S. District Judge Tanya Chutkin says the Trump administration adopted a perverse reading of the Constitution and appeared to sanction unlimited executive power with the Doge effort.

The judge tossed out a claim against President Trump saying courts cannot restrict presidents performing their official duties. Let's turn now, Karen, to Musk's SpaceX. That company's colossal Starship rocket suffered a leak, tumbled out of control in space and disintegrated as it hurtled back to Earth at a test flight yesterday. A few minutes in, the recycled super heavy booster separated from the upper portion of Starship and fired its engines.

But as it maneuvered itself into position and plunged back to Earth, it suffered an apparent problem and exploded. We have essentially lost attitude control on the ship at this point. It is suborbital, so it's still headed to the exact same trajectory as before.

We were not able to get that payload door open and deploy those nose cones. We've been dealing with some leaks on the ship. This is also what led to that loss of attitude control. So at this point, we are kind of in a spin. SpaceX stresses it learns from every test flight, saying, quote, we're going to learn, iterate and iterate over and over again.

Nathan, the Trump administration is taking its pressure on colleges and universities to a new level. Secretary of State Marco Rubio has ordered embassies around the world to stop scheduling student visa interviews. The administration is considering tougher reviews of students' social media accounts for signs of anti-Semitism or national security risk. Here's State Department spokeswoman Tammy Bruce.

Every sovereign country has a right to know who's trying to come in, why they want to come in, who they are, what they've been doing, and at least hopefully within that framework, determine what they will be doing.

State Department spokeswoman Tammy Bruce, this latest move comes after the Department of Homeland Security tried to block Harvard from enrolling international students. That effort is on hold in court. A top Justice Department lawyer is suggesting more action is coming, saying the University of California is one that can expect massive lawsuits. Let's turn to the markets now, Karen. Futures are lower after yesterday's tech-led rally on Wall Street, and one of those tech giants reports earnings this afternoon.

That would be NVIDIA. Let's get a preview from Bloomberg's Tom Busby. While demand for NVIDIA's AI chips remains strong from U.S. firms still building out their AI infrastructure, the big question, how the company is dealing with curbs on shipping its products to customers in China. That prompted the company to already announce a $5.5 billion write-down a few weeks back.

Also key for investors, any update on plans to launch cheaper Blackwell chips just for the Chinese market and a timeline for its next generation Rubin processors. Despite the expected write-down, Bloomberg consensus calls for revenue of $43.32 billion, adjusted earnings per share of 88 cents. Tom Busby, Bloomberg Radio. All right, Tom, thank you. Stay with Bloomberg for full coverage of NVIDIA's earnings on a special edition of Bloomberg Technology when we'll be speaking with the CEO, Jensen Wang.

Catch it at 6.30 p.m. Wall Street time on Bloomberg Radio, Bloomberg Television, and the Bloomberg Podcasts page on YouTube. Nathan in Asia, Japan's latest auction of 40-year government bonds has seen its weakest demand in almost a year. The outcome risks fueling further volatility in global debt markets amid concerns that rising government spending could push deficits.

into dangerous territory.

and it's part of ongoing talks between authorities and the companies. On Friday, President Trump announced a partnership that included $14 billion in new investments, but at that time he provided few additional details. And Nathan, the president is continuing to push to take Fannie Mae and Freddie Mac public. We get the details with Bloomberg's John Tucker. John, good morning. Good morning, Karen. President Trump wrote last night in a post on his Truth Social platform, I am working on taking these amazing companies public.

Now, importantly, he also noted the U.S. government would retain guarantees in an oversight role over Freddie Mac and Fannie Mae. They have tried this before, but it turned out to be too complex. Both Fannie and Freddie are government-sponsored enterprises. They were created to enhance the flow of credit to specific areas of the economy, in this case, housing. With a government backstop, their bonds are seen as among the safest areas.

But they've been under government conservatorship since the 2008 financial crisis. Investors have called for the government to release the two entities, which could provide a windfall for shareholders, including the federal government. But there's also a fear it could raise mortgage rates.

In New York, I'm John Tucker, Bloomberg Radio. John, thanks. President Trump's trade war is leading businesses to freeze hiring and hold off on future investment decisions. That's the view of Richmond Fed President Thomas Barkin. He spoke with us yesterday right here on Bloomberg Radio. When I'm talking to businesses, which you know I do every day, I've been describing this as driving through fog. It's just very hard.

to drive when it's really foggy. And businesses are afraid to accelerate because they don't know what's around the next curve. And they're also afraid to put on the gas because you don't want someone crashing into you. And so by and large, they're pulling over and putting on the hazards.

Richmond Fed President Thomas Barkin's colleagues at the Central Bank have held interest rates steady this year, biding time to see how the Trump administration's policy changes shape the economy. Catch our full conversation with Richmond Fed Chief Tom Barkin on the Bloomberg Podcast's YouTube page.

In Europe, Nathan, a change at the top at Stellantis. The automaker has appointed its America's Head Antonio Filosa as chief executive. Stellantis is relying on an experienced company insider to turn around the automaker after former boss Carlos Tavares was forced out over slumping sales and profit.

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. Ukraine President Volodymyr Zelensky called on Western allies to provide about $30 billion by the end of the year to boost domestic weapons production and hold off Russia's advance. Support from the U.S. under President Donald Trump appears waning, and efforts at peace negotiations with Russia's Vladimir Putin are stalling. It

It comes as President Trump has indicated that he's losing patience with the war in Ukraine and has directed his frustration, for the most part, at Putin. A former top aide to Sean Diddy Combs has testified at his sex trafficking trial that the music mogul threatened her with death on her first day on the job. Capricorn Clark also says Combs later waved a gun as he kidnapped her in an angry rush to find and kill rapper Kid Cudi.

Prosecutors are trying to prove Combs led a racketeering conspiracy that relied on fear and violence. Attorney and court watcher Areva Martin says Clark's testimony corroborated what Kid Cudi already told the jury. It is really damning testimony against Sean Combs. When you look at the number of witnesses that have come into that courtroom that have corroborated

violence that was perpetrated against Cassie and others. Really, really compelling testimony for the prosecution. Attorney Areva Martin Combs has pleaded not guilty. President Trump issued pardons for the reality TV stars Todd and Julie Chrisley.

The stars of Chrisley Knows Best were sentenced to years in prison for defrauding banks out of more than $36 million and hiding millions from the IRS. Also receiving presidential pardons this week, Paul Wolszak, convicted tax cheat, has been pardoned weeks after his mother attended a million-dollar-per-head fundraiser with President Trump at Mar-a-Lago.

Police in Connecticut are investigating a mass shooting in a mall in Waterbury. At least four victims were shot at the Brass Mill Center Mall. Waterbury Police Chief Fernando Spagnuolo. There were some people that sheltered in place. It was really amazing to watch people in this time of crisis keep cool heads and follow plans and shelter in place.

Chief Spagnuolo says a person of interest is in custody. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr and this is Bloomberg, Karen. All right, Michael Barr, thank you.

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on Emirates.com. Fly Emirates. Fly better.

Every business starts with an idea. How can you go from daydreamer to industry leader? Amazon Business accelerates your journey. With smart business buying, get everything you need to grow in one familiar place, from office supplies to IT essentials and maintenance tools. Amazon Business takes the buying experience you know and love from Amazon, plus tools that help you save costs and make insights-based decisions. Ready to bring your visions to life? Learn how at amazonbusiness.com.

Time now for the Bloomberg Sports Update. Here's John Stashower. John, good morning. Good morning, Karen. The Knicks were trying for another road win. They had six and seven tries in the postseason and another come-from-behind victory. At Indiana, they never trailed by 20 like in the last three comebacks, but in Game 4, the Pacers were in front almost the whole night. Knicks stayed in it, but Indiana always had the answer. Bridges around the screen. On top, Brunson. These men go to front. Here we go.

Back to Bridges. Another three. Another hit. He sticks one. Six-point game. Halliburton weaving, driving, scoring. Goes on top. It's top end for three. That'll do it.

On TNT, that game-clinching three came with 46 seconds left. Hit by the ex-Knick, OB Toppin. Indiana won 130-121 for Tyrese Halliburton. A stat line never seen before in the playoffs. 32 points, 12 rebounds, 15 assists, and no turnovers. Jalen Brunson of the Knicks with 31. It's 3-1 Indiana. Game five tomorrow at the Garden. Stanley Cup final looking like a rematch of last year.

When Florida beat Edmonton, the Panthers are up 3-1. They can win the East tonight at Carolina. The Oilers are up 3-1. They beat Dallas 4-1 since scoring five goals in the third period of Game 1. The Stars, last three games, held the two goals. Another win for the Yankees, made it 15 to the last 19. 3-2 over the Angels behind Carlos Rodon.

Seven scoreless innings. He struck out 10. Mets scored four in the first. Went on to beat the White Sox 6-4, improving to 21-6 at Citi Field. Nationals lost in Seattle 9-1. Red Sox lost in Milwaukee 5-1. A Christian Yelich 10th inning Grand Slam. French Open. Straight set opening round wins for Novak Djokovic, Coco Gauff, Jess Pagula, Carlos Alcaraz, Iga Shiantek, and Irina Stadalenko starting the second round today. John Stasch, Edward Bloomberg, sports camera, me.

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 and we are counting down to the big earnings event of the week. After today's closing bell, we get the latest quarterly results from NVIDIA, the chip giant that has become a bellwether of artificial intelligence demand and the tech sector as a whole.

So let's get a preview. We're joined now by Bloomberg's Kriti Gupta. And Kriti, we've talked about this many times before. Investors have kind of gotten used to blowout results from NVIDIA quarter in and quarter out. Can they expect the same this time around? Good morning. Good morning, Nathan. This is the story of the A++ plus student and whether or not they can keep that really stellar grade point average. But that's really every quarter we talk about this. That's the challenge.

in that the expectations are just so high, which is what creates that volatility that you just mentioned in terms of the earnings reports. A lot of folks decide to hedge either up or down based on these earnings. And the margin of the miss is also another nuance to add. On top of that, now we have to factor in the Trump administration's curb exports and what that looks like in terms of the write downs that

they've given. So that's a laundry list of things we're watching, Nathan, but let's divide it piece by piece if we can. Kicking it off with the AI story, because at the end of the day, it's the AI momentum that matters the most. This idea that there's insatiable demand when it comes to the AI data center story. NVIDIA is out

front in terms of monetizing that and really leading the innovation there. Though that data center revenue for the first quarter, the estimate is about $39 billion, a little over there as well. They're expecting the second quarter, the street analyst consensus is expecting the second revenue quarter to go up

to about 46 billion. Those are some very high numbers coming from about 43 billion in the first quarter. So you can really see how the expectations are very high when it comes to the revenue story for Nvidia. But how can Nvidia meet those expectations when we've been hearing ahead of these earnings from CEO Jensen Wang that the chip curbs, particularly out of China, are a mistake?

It's an interesting one because NVIDIA is one sitting on piles and piles of cash. And this is a symptom of kind of the post-COVID story where so many of these tech giants have been sitting on so much cash. But NVIDIA has invested a lot of that in R&D and specifically in creating chips that can kind of circumvent the Biden era export controls as well. So you can still serve a Chinese market without providing those high end military grade kind of AI powered computer chips.

Donald Trump and his administration saying, well, those don't cut it either. And it's something NVIDIA has already talked about in terms of a $5.5 billion write-down. But Nathan, just off some rough math here, and there is obviously way more nuance, but if you just look at those first quarter and second number quarters I told you, so the revenue estimate about $43 billion, a second quarter forecasted of about $46 billion, that in itself is about a $3 billion difference, a

from quarter to quarter. A write-down about $5.5 billion still doesn't necessarily handicap NVIDIA in the way that it could to other companies. Got about a minute left, Crady. What further commentary could we hear when it comes to some of the latest chips that NVIDIA has coming down the pike?

So NVIDIA is going through kind of its own Apple moment where a lot of the focus is on, yes, innovation. Yes, it's on new markets like the Middle East, for example, where Donald Trump has touted so much of that NVIDIA investment, not to mention domestic investment as well. But really keep an eye on the design cycle because the last time they really launched a product, they're talking about shipping delays that are pushing shipping those products to their clients.

into 2026. Does that push out the innovation cycle as well in terms of the next generation product that they have to offer? I think that's the commentary that you're going to want to watch today. 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. Eastern 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

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I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

Every business starts with an idea. How can you go from daydreamer to industry leader? Amazon Business accelerates your journey. With smart business buying, get everything you need to grow in one familiar place. From office supplies to IT essentials and maintenance tools. Amazon Business takes the buying experience you know and love from Amazon, plus tools that help you save costs and make insights-based decisions.

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