Oil Rises on Report Israel May Strike Iran; Justice Department Opens Probe of Andrew Cuomo
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Bloomberg Audio Studios. Podcasts. Radio. News. Good morning. I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, oil is on the rise this morning as well. That follows a CNN report citing new U.S. intelligence suggesting Israel is preparing for a potential strike on Iran's nuclear facilities. We get more from Bloomberg Middle East correspondent Dana Kresh.

It's not clear that Israel had made a final decision on that. And there was, quote, deep on disagreements within the administration about whether or the likelihood that Israel will ultimately go ahead and attack a nuclear facility in Iran. This option has always been on the table for both Israel and the U.S. Israel thinks Iran's nuclear program in its entirety threatens its existence. We know Israel would do it, but many have said no.

that if Israel would go ahead with that, it won't do it without U.S. approval. And that's, of course, the big question here. Would the U.S. give the go-ahead for that? Bloomberg's Dana Kresh says an attack by Israel would add to unrest in the Middle East, which supplies about a third of the world's crude. And checking prices right now, NYMEX crude's up 1.5% or 94 cents higher at $62.97 per barrel. Brent crude is up 1.4% at $66.28.

Now to the latest from Washington, D.C. Nathan, right now members of the House Rules Committee are debating President Trump's so-called big, beautiful tax and spending cut bill. They scheduled this session at 1 o'clock in the morning after the president made a personal appearance on Capitol Hill to pressure Republicans to put their differences aside over the legislation. We want to benefit Republicans because they are the ones that are going to make America great again. The Democrats are destroying our country.

President Trump heard live here on Bloomberg, says Republicans from high-tax states who are pushing for a higher state and local tax deduction should accept the $30,000 cap in the bill. That's three times higher than the current $10,000 limit. New York Republican Nicole Malliotakis says she agrees. You know, a $30,000 cap is a lot of money.

deduction on salt not only covers 98 percent of my district but it'll put thousands of dollars into the pockets of my constituents allowing them to keep more of their hard-earned money.

And New York's Nicole Meliotakis appeared on Bloomberg's Balance of Power, but a higher salt cap could anger ultra-conservatives concerned about the size of the tax cuts. Here we turn to a developing story now. Andrew Cuomo, who's running for mayor of New York City, is reportedly under criminal investigation at the Justice Department. Let's get the very latest with Bloomberg's John Tucker. John. And Nathan, it's the New York Times that says the Trump administration's Department of Justice has opened an investigation into the former governor.

It concerns his testimony to Congress during the coronavirus pandemic. Cuomo was forced to defend how he handled the spread of the virus in nursing homes. It was at a politically charged hearing last year. Republicans accused him of lying. Cuomo's spokesman says this is lawfare.

and election interference plain and simple. Now, the reported investigation into Cuomo comes in the wake of the Trump administration ordering federal prosecutors to drop a corruption case against Mayor Eric Adams. Well, that has sparked concern among Democrats that the president's using the judicial system for political purposes. Both Adams and Cuomo are running for mayor in the upcoming New York election, and Cuomo's leading all the candidates in the polling, including Adams. In New York, I'm John Tucker, Bloomberg Radio.

All right, John, thank you. Well, let's turn to the markets now, where futures are lower following the first loss for stocks in six sessions. The S&P 500 fell four-tenths of a percent. Morgan Stanley, chief U.S. equity strategist, Mike Wilson, thinks stocks are heading higher. If you think about this administration, they came in doing all the sort of growth negative policy changes temporarily.

the start. You could say the president is acting like a new CEO. He's coming in and sort of kitchen sinking it. And then in the second half is when the more positive strategies or policies will start to flow through things like deregulation. We think there'll be success in passing this tax bill or budget reconciliation.

Morgan Stanley, chief U.S. equity strategist, Mike Wilson, forecast the S&P 500 will be at 6,500 by the second quarter of 2026. That's about 10% higher than current levels. Well, Karen, Tesla was the only one of the so-called Magnificent Seven stocks that rose yesterday, gained a half percent. That came after CEO Elon Musk said he's committed to leading the company for the next five years.

Speaking exclusively to Bloomberg at the Kotter Economic Forum, the billionaire who has been Tesla's CEO since 2008 dismissed concerns over falling sales in Europe. Europe is our weakest market. We're strong everywhere else. So our sales are doing well at this point.

We don't anticipate any meaningful sales shortfall. That was Tesla CEO Elon Musk speaking with Bloomberg's Michelle Hussain at the Qatar Economic Forum. For their full conversation, head to the Bloomberg podcast page on YouTube. Let's turn to the economy now. Nathan and Bridgewater Associates founder Ray Dalio says the Fed should not be cutting interest rates right now. He spoke to Bloomberg's Shinali Basik at BNP Paribas' annual Global Electric Vehicle and Mobility Conference. I think the market's

if they were to see a too aggressive cut in monetary policy, too inappropriate cut, that it would actually be bad for the bond market.

Henry Dalio there speaking with Bloomberg's Shanali Basik. That full conversation also available to watch on the Bloomberg podcast page on YouTube. And later this week, Karen, we're expecting a conversation between Treasury Secretary Scott Besant and the Chancellor of the Exchequer of the UK, Rachel Reeves. It's going to be on the sidelines of the group of seven finance ministers meeting in Canada, their first in-person discussion since the U.S. and Britain announced an outline for a trade deal earlier this month. We get more from Bloomberg's James Woolcock in London.

It was hailed as a full and comprehensive trade deal by US President Donald Trump. But the UK and the US still haven't set a date for when tariff reductions will come into effect. The two sides are also working through sticky differences on how to regulate big tech and potential taxes on the pharmaceutical industry.

Both sides enjoyed the showmanship of announcing a first post-Liberation Day trade deal. But now the question is, when does the detail arrive? In London, James Wilcock, Bloomberg Radio. All right, James, thank you. While there's new tensions between the U.S. and China weeks after their trade truce, the Chinese Commerce Ministry is threatening legal action against anyone that enforces the Trump administration's export controls on Huawei chips.

A statement from the agency says the curbs could violate China's anti-foreign sanctions law and undermine the latest trade talks in Geneva. The U.S. Commerce Department had warned that using Huawei chips anywhere in the world would violate export controls, but it later removed that place reference.

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. The Federal Aviation Administration is cutting the number of flights at Newark Airport after a number of air traffic control issues. Bloomberg's Lisa Mateo has the details.

The FAA said it will allow a maximum of 28 arrivals per hour at the airport through June 15th when daily construction on one of its runways ends. After that, 34 planes will be permitted to land each hour until October 25th. Aviation safety regulators are also taking steps to up

upgrade the infrastructure, and increase staffing. The moves come after technology outages and staffing issues cause hundreds of flight cancellations and delays. Lisa Mateo, Bloomberg Radio.

Leaders of the Congressional Black Caucus, Democratic Women's Caucus, Congressional Progressive Caucus, and Democratic members of New Jersey's congressional delegation held a news conference in support of Democratic Representative LaMonica McIver. The DOJ charged the New Jersey congresswoman with allegedly assaulting law enforcement officers outside an ICE detention facility earlier this month. New Jersey Senator Cory Booker. Fear is understandable.

But fear that freezes is unacceptable. We need to turn our fear into fight, understanding that the other side of fear is courage. Senator Booker used to be the mayor of Newark. The mother of Cassie Ventura says she paid rap mogul Sean Diddy Combs $20,000 in 2011 when he demanded the money because he was mad that her daughter had started dating someone else.

Regina Ventura testified that she made the payment fearing for her daughter's safety. She said Combs returned the money days later. Combs has pleaded not guilty to sex trafficking and racketeering charges. George Wendt, who played the beer-loving Norm Peterson on the hit 1980s TV comedy series Cheers, has died. Norman? Gentlemen, start your taps.

Wynn earned six straight Emmy Award nominations for Best Supporting Actor in a Comedy Series. He also crafted a stage career that took him to Broadway. George Wynn was 76. 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.

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Time now for the Bloomberg Sports Update. Here's John Staschauer. John, good morning. Good morning, Karen. In Boston, the Mets played a game without any Juan Soto lack of hustle issues, but also without any Mitt Runt shut out by seven Red Sox pitchers, held only four hits. The Sox...

Hit two solo home runs in the fifth inning off. Clay Holmes and won 2-0 to get back to .500 for the slumping Mets. It's their first three-game losing streak in their last six games. Five losses and not a single home run hit. The Mets hadn't gone six games without a homer in ten years. The Yankees hosting Texas. They did leave the yard. High drive. Right field. Garcia turns. Looks.

into the second deck for Rice. Ben Rice with a solo shot. Yankees lead 1-0. On the ESPN Network, an eighth inning two-run homer by Aaron Judge. His 16th. Yanks beat the Rangers 5-2. They had a shutout until two outs in the ninth. Yanks move a season-high nine games over .500. Nationals beat the Braves 5-3. Dodgers beat Arizona in tennings to end their season.

Four-game losing streak. NBA playoffs, game one in the West, Oklahoma City down four in halftime. Won the second half from Minnesota 70-40. One game won, 114-88. At the Garden tonight, the first Knicks conference finals game in 25 years. The last one was also against Indiana, and Tom Thibodeau back then was a Knicks assistant. I think that's what makes the playoffs so great is the competition. People want to see great competition. I think that

you know oftentimes the style of play can change it could be you know fast paced sometimes it's slow paced the 90s was it was a crawl now the game's a lot faster a lot more skilled it's different but the competition part was always the same that series back in 2000 ended a run where the nixon pacers met in the playoffs six times in eight years stanley cup playoffs game one in the east florida won 5-2 at carolina the nfl voted

to allow its players to play Olympic flag football in 2028 in Los Angeles. John Staschauer, Bloomberg Sports. 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. Geopolitical tensions may be adding a new headwind to the market this morning on reports U.S. intelligence could be pointing to Israel preparing for an attack

on Iran's nuclear facilities. The report has oil prices moving higher this morning. For more, we're joined by Bloomberg's news director for Europe, the Middle East and Africa, Rosalind Matheson. Roz, good morning. What do we know about this apparent CNN report that Israel could be making these preparations?

Well, in fact, there's been these reports periodically for quite some months now that Israel is looking more in depth at the possibility of making a strike on Iran's nuclear facilities. We saw this with some of the tit-for-tat strikes that happened.

between the two countries last year and whether this would be one of the options that came onto the table. So in essence, in itself, the fact that Israel is looking at this is nothing new. And you can see the oil didn't move massively on it as a result. So maybe the markets doesn't think that something is imminent. The question is, though, is anything shifting in the Israeli thinking on this as part of these reports? Is this

pointing to them, perhaps hardening their position towards something? And if so, why would that be happening? Is it because that the Israeli administration of Benjamin Netanyahu is frustrated with the situation in Gaza? You know, they are talking about a much bigger scale military operation there against Hamas

They feel that Iran has been weakened in their proxies in recent times. They're worried about the pathway towards nuclear enrichment and see perhaps a window closing for them to take action against these nuclear sites. So it's a bit hard to know if there's been a shift in the calculus for Israel and whether this is becoming more of a prospect. But to say it has been something we know that they've discussed on and off the

for quite some time. What we need to understand is whether there's anything that has changed that might make this more realistic. And I guess what could be feeding into that potential calculus, Raz, is the sort of fraying of the relationship that we've started to see just a bit, some evidence of that at least, between Israel and the Trump administration as these nuclear talks with Iran have been going on.

Well, that's right. And a key factor in all this would also be the US perspective, because as you say, there has seemed to be a bit of a cooling between Donald Trump and Benjamin Netanyahu. Donald Trump frustrated about the fact there's not a holding ceasefire for Gaza.

And also he's talking about trying to get an Iran deal done while warning that if Iran doesn't come to the table, that he'll revert to a maximalist posture. So it's very clear also from Donald Trump's visit to the region last week. He was talking about a message of wanting stability, relative stability in the region. He wants to focus on business, trade, investment ties, the Abraham Accords.

And, you know, if Israel does make a move against Iran's nuclear facilities, all of that's probably off the table. It'd be a dramatic escalation militarily. So it'd be very interesting to know what, if anything, the US messaging to Israel is on this. Does he say, you know, to Benjamin Netanyahu, go ahead, but make it quick and get it done? Equally, Israel militarily would probably require outside help.

to make such an attack on these facilities. They're very deep in the ground. They're very hard to get to. And would other countries be willing to provide that support, including the US? So there's a lot we don't know here about the pathway towards potential action. Nothing does seem imminent from Israel on it, but it's interesting to see it again. It appears to be in the ether.

Appreciate the debrief, as always. Roz Matheson, Bloomberg News Director for Europe, the Middle East and Africa with us this morning. And on these reports, Karen, we are seeing crude oil prices move higher on the session. Right now, NYMEX is up 1.7 percent, just above $63 a barrel.

Well, Nathan, we also want to repeat some of our top stories this morning. President Trump is telling Republicans not to let the state and local tax deduction or cuts to Medicaid get in the way of passing his tax cut bill. The House Rules Committee is debating it right now. The Justice Department's reportedly investigating former New York Governor Andrew Cuomo over his congressional testimony about actions during COVID. Cuomo is now accusing DOJ of interfering with his run for New York City mayor.

And futures, they're moving lower after Wall Street's six-day winning run came to an end yesterday. Bridgewater founder Ray Dalio says now is not the time for the Fed to cut rates. And we have more on those stories coming up on Bloomberg Daybreak. But now we want to turn our discussion to Tesla founder and the world's richest man, Elon Musk.

He joined our Michelle Hussain for a discussion at the Qatar Economic Forum. They discussed his political and business roles, his commitments to Tesla, and whether he will continue his large political donations and involvement in politics. Let's listen in.

But sales still down compared to this time last year? In Europe. In Europe, okay.

That's true of all manufacturers, no exceptions. Okay.

You would acknowledge, wouldn't you, that what you are facing, OK, let's just take it as Europe. What you are facing is a significant problem. This Tesla is an incredibly aspirational brand. People identified with it. They saw it being at the forefront of the climate crisis. And now people are driving around with stickers in their cars saying, I bought this before we knew Elon was crazy. And there are also people who are buying it because Elon's crazy or however they may view it.

So, yes, we've lost some sales perhaps on the left, but we've gained them on the right. The sales numbers at this point are strong and we see no problem with demand. Tell me then how committed you are to Tesla. Do you see yourself and are you committed to still being the chief executive of Tesla in five years' time? Yes. No doubt about that at all? Well, no, I might die.

Does that mean that the value of your pay doesn't have any bearing on your decision? Well, that's not really a subject for discussion in this forum. I think, obviously, there should be compensation for if something incredible is done, that compensation should match that something incredible was done.

I'm confident that whatever some activist posing as a judge in Delaware happens to do will not affect the future compensation. This is the judge who twice struck down the $56 billion pay package that was awarded to you. I think on the basis, on the current value of stock options, yeah. Not a judge, not a judge. The activist who is cosplaying a judge in a Halloween costume

Okay, that's your characterization. I think on the current value of stock options, I think the actual... On the current value of stock options, I think the value of that pay package stands at about $100 billion. Are you saying you are relaxed about the value of your future pay package? Your decision to be committed to Tesla for the next five years, as long as you are still with us on this planet, is completely independent of pay?

It's not independent. So pay is a relevant factor then to your commitment to Tesla. It's sufficient voting control such that I cannot be ousted by activist investors is what matters to me. And I've said this publicly many times. But let's not have this whole thing be a discussion of mileage pay. It's not a money thing. It's a reasonable control thing over the future of the company, especially if we're building millions, potentially billions of humanoid robots. I can't be sitting there thinking,

and one day get tossed out by, for political reasons, by activists. That would be unacceptable. That's all that matters. Now let's move on. Okay. Well, one question before we move on to other companies, which is that I wonder if some of what has happened to Tesla in the last few months, did you take it personally? Yes. And did it make you regret any of, or think twice about your political endeavors? I did what needed to be done.

The violent antibody reaction, and I'm not someone who's ever committed violence, and yet massive violence was committed against my companies, massive violence was threatened against me. Who are these people? Why would they do that? How wrong can they be? They're on the wrong side of history, and that's an evil thing to do, to go and damage some innocent person's car.

to threaten to kill me. What's wrong with these people? I've not harmed anyone. So something needs to be done about them. And a number of them are going to prison and they deserve it. Finally, political, your political influence. I wondered whether you have decided yet how much you're going to spend on the upcoming midterms.

Is it you've spent a lot more money on the last U.S. election than you envisaged when you were speaking here three years ago. Are you going to continue to spend at that kind of level on future elections? In terms of political spending, I'm going to do a lot less in the future. And why is that? I think I've done enough. Is it is it because of blowback? Well, if I see a reason to do political spending in the future, I will do it. I don't currently see a reason.

And that was Tesla CEO Elon Musk speaking with Bloomberg's Michelle Hussain in a wide ranging conversation from the Qatar Economic Forum. And we're pleased to tell you that Michelle is with us now, editor at large for Bloomberg Weekend this morning after that more than half hour talk virtually in Qatar. Michelle, good morning. Very interesting to hear Elon Musk, you know,

uh seeming undeterred really uh by what really feels like politicization of the tesla brand he almost sounded like he was embraced it to some extent what are your thoughts

There was definitely a lot to take in. We spoke for nearly 40 minutes. So it is a chance to have a conversation that is corporate and that touched on politics, but is also personal. And you heard from Sarah, he sounded upset at times when he talked about what Tesla drivers or Tesla dealerships have experienced and the threats to him personally. I think as far as Tesla is concerned, you know, we heard this before in the earnings call, but

he feels that he is the answer. And his presence back at Tesla, apart from the one to two days a week that he spends on government work, is going to turn the ship around. I have to say that the picture, the declines I pointed to in Europe, they are very serious. In big markets like Sweden, for example, 80% lower sales than this time last year. That was the

picture in April compared to the previous April. And fewer vehicles were shipped from Tesla's plants in China as well last month. Again, that's been the picture for a number of months. So he does have a task to do, but he's a person who's faced many obstacles in the past, and he clearly feels that this is going to be what he's going to do again. And I think it's also interesting to see the kind of

distance that he's putting between himself and the administration to some extent, referring to Doge, for example, much more as advisors than as actors within the administration. And also to your point, pointing out that he's going to be, as he put it, significantly paring back his political spending. That could be a blow to not just President Trump, potentially, but for Republicans, his fellow Republicans.

heading into a midterm election next year. Indeed, but you know, he did leave the door open, didn't he? Because when he says he envisages doing a lot less in the future, now a lot less than the upwards of $250 million that he spent on getting Donald Trump elected is potentially still a lot of money. And he also said, you know,

And, you know, essentially, if he sees a reason, then he will do so again. So I think perhaps the door is open to some kind of negotiating tactic, whether it's with the president and his circle or with other Republicans. And there'll be other parts of the world, the UK, Germany, which will be interested in what he said on that and wondering whether he might use his political influence to different degrees where they are.

You have to wonder, though, whether Elon Musk can continue to divide his attention in the way he has with the Doge effort in Washington, D.C., as well as running not just Tesla, but SpaceX, Starlink, all these other ventures. In our last minute, where do you see things going for Elon Musk after this long conversation?

Well, I think this conversation really did confirm that the corporate sphere is where he is going to try and focus his energies. Look, he has tremendous capacity. He was already running multiple companies before he entered his government role. I suspect reading between the lines that this has the blowback, as he would call it, has been far beyond what he anticipated. He would blame others for that rather than his own decisions. But

I asked him at the end whether this was a pivotal year for him, and he didn't go as far as that. But I think it's almost certainly been a year like no other in his life so far. 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 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121. Plus, listen coast-to-coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces.

And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. 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.

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