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Harvard Business School Narrator
Harvard Business School. Executive education delivers a world class learning experience that energizes aspiring and established change makers. Prepare for the next elevation for your organization and for yourself. Learn more at HBS Me Breakthrough. That's HBS Me Breakthrough.
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Alex Osola
President Trump says the U.S. operation in Iran could last four to five weeks or even longer. Plus, the threat to the Strait of Hormuz sends oil prices higher.
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Jinju Lee
Iran might not be able to physically close off the entire strait, but all they really have to do is make it too risky for vessels to pass.
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Alex Osola
And a contentious primary election in Texas tomorrow could offer clues for the midterms. It's Monday, March 2nd. I'm Alex Osola for the Wall Street Journal. This is the PM edition of what's news, the top headlines and business stories that move the world.
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Sabrina Rodriguez
Today,
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Alex Osola
The US Is sending more forces to the Middle east to support its operation in Iran. In remarks at the White House today, President Trump outlined four goals for the Iran operation. He says it's aimed at destroying Iran's missile capabilities as well as its navy. He also says it's to prevent the country from obtaining a nuclear weapon and will stop Iran from arming funding and directing terrorist groups outside its borders. Trump said strikes against Iran could last several weeks.
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Jeffrey Safe
Whatever the time is, it's okay. Whatever it takes, we will always, and we have. Right from the beginning, we projected four to five weeks, but we have capability to go far longer than that.
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Alex Osola
The toll for the US Is rising. Six US Troops have been killed, with several others seriously wounded. Trump has warned that more American casualties are likely. Three US Jet fighters were mistakenly shot down over Kuwait, but the six crew members safely ejected. In Israel, at least nine people were killed after an Iranian strike and several people in the United Arab Emirates. In Iran, the Iranian Red Crescent says US and Israeli strikes have killed more than 500 Iranians. Many of the country's top leaders have died. Iran's ambassador to the United nations said today that the US And Israel have bombed hospitals, Red Crescent facilities, residential buildings and schools. And there were more than two dozen deaths in Lebanon from Israeli strikes after the Hezbollah militia attacked Israel across the Gulf. Some commercial flights resume today. They're in high demand as Western expats try to leave the region. Back in the U.S. americans are figuring out what they think about the operation. Aaron Zitner is a reporter out of Washington and says Trump's base is split on the conflict.
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Aaron Zitner
The loyalty of Donald Trump's supporters to him personally is at this point we could even say legendary. He just has a firm grip on his base but also we're starting to see some very prominent voices saying they're opposed. Most famously now, Tucker Carlson has said this is disgusting and evil. And what do the MAGA supporters do? Do they hold on to the part of the Donald Trump message that is no more foreign intervention, or do they say, you know, he said for a long time that Iran can't have nukes. And what I'm finding is that there's a large number of MAGA people who are kind of in a negative posture toward this, but not in opposition. They're skeptical, but they're not breaking away. I'll say. The thing I heard today is about the use of ground troops. Both President Trump and Pete Hegseth in various venues today would not rule out use of ground troops. And that that's a kind of a red line for some people.
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Alex Osola
European and Asian stocks largely sold off and investors sought safety in the dollar and gold. But US Indexes came back from steep early losses to end nearly flat. The dow ended down 0.1% while the S&P was up less than 0.1% and the Nasdaq less than half a percent. Shares of oil shipping and defense companies rallied. Oil prices also jumped after Iran paralyzed tanker traffic through the Strait of Hormuz and attacked energy infrastructure in the Gulf. Brent crude, the global benchmark, rose almost 7%. And European gas prices surged after Qatar, one of the biggest exporters of liquefied natural gas, stopped production at the pump. Truckers might be in for some pain. Diesel futures rose 12% in New York to above $2.90 a gallon, the biggest one day gain since early 2022. The oil market has gotten used to quickly recovering from geopolitical threats. But could this time be different? WSJ Heard on the street columnist Jinju Lee joins us now. Jinju, I'm thinking about the most recent 12 day war between Israel and Iran last year. Oil prices spiked, but the conflict didn't have a long term impact on oil prices.
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Jinju Lee
Yeah. So if there's a lasting disruption to the flow of oil tankers through the Strait of Hormuz, where about a fif of global oil production passes, that would be very serious. The worst case scenario might be one where Iran does serious damage to some of the neighboring Gulf countries export terminals because those are hard to repair and they are within striking distance of Iran's weapon systems.
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Alex Osola
The Strait of Hormuz, which you mentioned, that's this key pathway for oil. How would it work exactly to shut it down and does Iran have the power to do that?
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Jinju Lee
Iran might not be able to physically close off the entire strait, but all they really have to do is make it too risky for vessels to pass, and they definitely have the ability to do that.
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Alex Osola
Are there other sources of oil that could potentially cushion some of the blow to the global market? The US Is the biggest oil producer in the world, and the US And China both have strategic stockpiles of oil. To what extent could these help stabilize oil markets?
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Jinju Lee
The US Is the world's biggest oil producer, but shale is not considered spare capacity because it typically takes a few quarters to raise U.S. production significantly, which leaves us with stockpiles. There is more than 400 million barrels of oil in the U.S. strategic Petroleum Reserve. That represents about 20 days of domestic consumption. But there's pipeline constraints. The Strategic Petroleum Reserve might be able to provide 1.4 million to 2.1 million barrels a day. You can only take out so much oil in a given day. There is some thought that if China slows down some of its oil purchases, that could provide a bit of a cushion. But there's also the risk that an escalating conflict in the Middle east could cause China to hoard even more oil, which would not help bring prices down. It will all be about how the conflict lasts and how much damage the US Israel and Iran are willing to do on oil. Trump wants to avoid high gas prices before the midterms, and Iran obviously does not want to lose its oil revenue. So we'll have to see.
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Alex Osola
That was WSJ heard on the street columnist Jinju Lee. Thanks, Jinju.
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Jinju Lee
Thank you.
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Alex Osola
Coming up, we've got news from elsewhere in the world, including a heated primary in Texas and the start of a high profile antitrust trial in New York City. That's after the break.
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CLA Representative
cla. We're in your corner and on it. We coach tax strategies and little league first base. We help you adopt AI data tools and we adopt Rescue's named Buddy. We walk your factory floor and jog the local 5k, though sometimes we walk that too. Wherever you're coming from, we're right there with you. Wherever you're going, we'll get you there. CLA CPAs consultants and advisors. Learn more@claconnect.com port with you.
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Alex Osola
Tomorrow is the Senate primary election In Texas. The Republican race has turned personal and hostile. It's become an expensive challenge to sitting Senator John Cornyn, a fixture of Texas politics who's running for his fifth term. Party leaders worry that the fight will give Democrats an opening in the red state. President Trump hasn't endorsed a candidate. Running Against Cornyn are U.S. representative Wesley Hunt and the state Attorney General, Ken Paxton. Former Cornyn has repeatedly criticized Paxton character
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Jeffrey Safe
is on the ballot. I believe voters still care about their elected officials and they want people who will tell them the truth. And unfortunately, the attorney general has a record of doing the opposite.
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Alex Osola
Meanwhile, Paxton took aim at Cornyn in a speech last month in Tyler, Texas. Over four decades of service and what
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Sabrina Rodriguez
has he accomplished for Texas?
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Aaron Zitner
And no one can answer that question, even his supporters.
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Alex Osola
Journal Politics reporter Sabrina Rodriguez joins from San Antonio, Texas. Sabrina, is there a front runner in this race?
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Sabrina Rodriguez
Right now the Republican Senate primary is most likely going to head to a runoff. We don't see a candidate necessarily that's polling at 50% or plus. But in the polls we do see that State Attorney General Ken Paxton, who is really beloved by the MAGA base, is leading over incumbent Senator John Cornyn.
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Alex Osola
The Democrats have their own contested primary that's drawn a lot of attention. The main contenders are Representative Jasmine Crockett of Dallas and State Representative James Talarico, who's making a faith based progressive pitch. What does the outcome of the GOP race mean for the Democratic candidate?
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Sabrina Rodriguez
Yeah, the Democratic primary, it's interesting because it's being increasingly viewed as a toss up. It's certainly gotten a lot tighter in these final days. You know, Republicans would prefer to be running against Crockett. They think that they have a better shot at winning regardless of if it's Cornyn or Paxton. James Tallarico, he's really trying to appeal to swing voters, really thinks he can get moderates and even peel off some Republicans with his message.
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Alex Osola
And who would Democrats rather face in the general?
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Sabrina Rodriguez
Democrats think that they have a better shot with Paxton being at the top of the ticket. Paxton has a long history of controversies. He was impeachment impeached in the Texas House of Representatives, though the Senate acquitted him from it. It's been a very messy and hostile Republican primary, bringing up everything from things that have come up in Paxton's divorce to again, that long line of controversies and issues he's had while in office. For Democrats, a win in Texas would be huge. To be clear, given how much Texas has long proven to be elusive to them. Democrats have not won a statewide race in Texas since 1994. National Democrats themselves acknowledge this is quite the long shot. But with a candidate like Paxton and with the sort of momentum we see Democrats having, they're feeling some level of hope.
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Alex Osola
What are the national implications of this primary?
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Sabrina Rodriguez
On the Republican side, we see the traditional Republican longtime legislator running against a more MAGA focused candidate, someone who's been very focused on stoking culture wars. And on the Democratic side, while the party's trying to figure out their future, you have a candidate who's saying, I really want to appeal to the middle, I really want to appeal to people on both sides versus a candidate saying, I want to fire up the base. I want to be the fighter that, you know, the Democratic base wants.
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Alex Osola
So I think a lot of people
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Sabrina Rodriguez
are going to be looking to the results of this race to just get a sense of what direction both parties are headed in.
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Alex Osola
That was WSJ politics reporter Sabrina Rodriguez. Thanks, Sabrina.
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Jinju Lee
Thank you.
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Alex Osola
In other political news, we're exclusively reporting that the Trump administration plans to give up a legal fight against several big law firms. Last year, President Trump issued executive orders punishing the firms, including stripping security clearances and restricting their access to federal buildings. Several firms then sued and won in court. The Trump administration appealed, but is now dropping those appeals. In Manhattan, an antitrust trial kicked off today against Live Nation, which owns Ticketmaster. The Justice Department says Live Nation illegally dominates the market for major concerts and that hurts artists and fans as well as venues. Live Nation says prices are set by artists and that the market is more competitive than the Justice Department claims. If the government wins, it could ask a judge to split up Live Nation and Ticketmaster. Whether that would lower ticket fees isn't yet clear. And France will increase its stockpile of nuclear warheads and may deploy them across Europe to strengthen ties with its allies on the continent. French President Emmanuel Macron said today that France is working with eight European countries as part of a quote for forward deterrence strategy. The countries would join France's nuclear exercises. Many European countries are reassessing their reliance on the US Nuclear umbrella for their security, given President Trump's antagonism towards Europe. And that's what's news for this Monday afternoon. Additional sound courtesy of Reuters. Today's show is produced by Pierre Biennime with supervising producer Tali Arbel. I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.
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Jeffrey Safe
Model portfolios have evolved from a one size fits all solution. In a recent roundtable conversation, Jeffrey Safe of Blackrock and Alessio DeLongis of Invesco break down what's driving the next model moment, discussing how a deeper level of customization is producing a better alignment with investor goals and and creating a practice differentiator for financial advisors.