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President Trump calls off the ceasefire with Iran after a night of retaliatory strikes.
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To me, I think it's over. I don't want to deal with them anymore. They're scum.
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We have the response from NATO leaders who are gathered for a second day in Ankara and failure to launch for SpaceX on its first day on the NASDAQ 100. It's Wednesday, July 8th. I'm Daniel Bok for the Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of what's news, the top headlines and business stories moving your world today. Oil prices have jumped after President Trump said the ceasefire with Iran is over. It comes after the US And Iran exchanged fire following Iranian attacks on ships near the Strait of Hormuz late yesterday, Washington also revoked a waiver allowing Tehran to sell oil, something NATO Secretary General Mark Rutte said was absolutely necessary. Iran is basically violating the ceasefire.
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We see what happened yesterday with ships being intact. I think it is totally crucial that
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the US Forcefully reacts. Rota they are speaking at the NATO summit in Ankara. Journal National Security reporter Robbie Gramer is there for us. Robbie Trump grabbing headlines this morning saying that the ceasefire in the Middle east is over, yet we understand negotiations are still ongoing. Bring us up to speed.
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Yeah, I mean there was a series of US strikes and Iranian counterstrikes overnight in response to Iran targeting more vessels in the Strai Hormuza strategic waterway. So Trump lashed out at Iran's leadership after weeks of negotiations here. It's the starkest sign yet. The diplomacy with Iran has has stalled under this preliminary ceasefire agreement. But importantly, there is that caveat. As you pointed out, Trump was saying, I'll let our wonderful negotiators keep talking if they want it, but I don't see it now. There's negotiators Steve Witkoff and Jared Kushner have shepherded these negotiations ever since the ceasefire was finalized back in mid June. But we don't really know where stand as usual with Trump, he can escalate the rhetoric but also leave a little bit of room for negotiation. So there is a possibility that this is just dialing up the pressure on Iran, trying to shake them out of this, this rut of continuing these low level attacks on the strait, trying to get them back to the negotiating table in a serious way. Or it could be a sign that the US Is ready to undertake serious military operations in the region.
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Again, Robbie, this is all taking place amidst a high stakes NATO summit where Trump seems to be in a pretty punchy mood. Last night repeating threats to annex Greenland and remove more troops from Europe.
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It was Greenland that, and it continues to be, that should be controlled by the United States, not by Denmark. And when they wouldn't go along with it and with all the money we spent to help them with Russia, we don't have to spend any money. We could remove all of our soldiers out of Europe.
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How are allies responding to those threats?
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Well, it depends who you ask here. I mean that this is a really high stakes summit for the NATO alliance. We've got the war in Ukraine, we've got a Trump administration that, that's really angry at NATO allies for in their mind not stepping up to help his war in Iran. And so all of these European NATO allies and Ukraine are trying to project this show of, of unity, of alliance solidarity. But you have Trump the ultimate wild card here when he has the bully pulpit, European leaders just have to sit there and white knuckle, whatever is going to happen. So when, when he says these provocative comments on, on Greenland, which has been one of the most extraordinary crises in, in US European relations, you get a combination of NATO diplomats, NATO leaders who are rolling their eyes, who are becoming increasingly anxious, who are or who are sort of inured to this and saying, look, Trump's going to say what he's going to say, but we just have to keep our head down, keep doing work and keep this alliance functioning no matter what rhetorical bombshells Trump drops this week.
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Robby Yesterday we told listeners how NATO allies were presenting a bunch of military deals to show that they are in fact spending more on defense. Canadian Prime Minister Mark Carney this morning pointing out that the demand on NATO allies to spend more predates Trump actually goes back to the Obama administration. But how is Trump receiving news of these new deals?
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Look, I mean, this president, like past American presidents, Democrat and Republican alike, has said that NATO allies need to get serious on defense spending. What's changed is, of course this president has really, really escalated the Rhetoric, the threats to pare back US Commitments to NATO against the backdrop of this Russian war in Ukraine. And allies are still very nervous that, that Russia has ambitions to, to set their sights on NATO territory after Ukraine. However, that war ends. So, so it's incredibly high stakes for them. The European allies have announced of new weapons production, of new investments here. There's plans for all allies to spend up to 5% of GDP on defense and defense related investments in the next five to 10 years. That is a big win for the Trump administration. European allies say that's a big one for themselves. They do agree with Trump that they need to get more serious. Britain, France, Germany and other European nations said they will also spend more than $50 billion over the next decade to develop long range precision weapons. That's something that the US has the biggest stock of. And that stockpile is dwindling fast, especially after the Iran war. So they see that as a really critical gap in any sort of military contingency that they could face, particularly when it comes to Russia in, in the next decade.
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You mentioned Ukraine and on that, a highly anticipated meeting with President Zelensky today. We know the history between Trump and Zelensky. What is on the agenda there?
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You know, I think Zelenskyy is, is looking for any sort of signal that the United States might come down on the side of Ukraine in ongoing negotiations. Right now, Ukraine, almost against all odds that one might have expected a year ago, has the upper hand in the war against Russia. The front lines have basically stalled. Russia is pouring blood and treasure into this conflict in a way where it's just got no end in sight. And Ukraine has expanded long range strikes into Russia to try to damage Russia's military infrastructure and energy infrastructure. Ukraine looks like it has the upper hand here. And the pro Ukraine Europeans, pro Ukraine Americans who are trying to pitch Trump on taking a much more pro Ukraine stance here, you know, their pitch to Trump would be Ukraine has the upper hand. Ukraine also has the most battle hardened, experienced, innovative military in Europe. Now we need them on our side. Trump so far, you know, he famously, before he came into office again, said he could solve the Russia, Ukraine war on quote, unquote, day one. That obviously hasn't happened on all of his peace talks have, have run aground. He said he's talked to Putin recently. He's about to meet with Zelensky. So far he's tried to, for better or worse, depending on who you ask, try to strike a balance and be a little more neutral and try to broker a negotiation between the two of them. But European allies, members of Congress who are here, both Democrats and Republicans, are going to push Trump to come out swinging hard against Russia and push for more support for Ukraine. How Trump taxed this remains to be seen.
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National Security reporter Robbie Grammer in Ankara. Robbie, thank you for this.
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Thanks for having me.
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SpaceX shares stumbled on the company's first day on the tech heavy NASDAQ 100, falling by almost 7%. The Rocket Maker shares closed just below the $150 price point they hit on the day of the company's IPO last month. Journal markets reporter Caitlin McCabe says many investors had hoped that inclusion in major indexes would provide a boost to SpaceX shares.
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So a lot of analys that SpaceX might get a bump in its shares due to its inclusion in the NASDAQ 100 and that's because a lot of mutual funds and ETFs that track it would have had to buy SpaceX. But there are also a lot of investors out there that sometimes try to front run these inclusions in indexes by buying even further in advance. You know, hedge funds do this a lot. Other short term traders, maybe even some savvy retail investors. So they might have been buying SpaceX for example, last week and we did see SpaceX shares rise almost 6% last week and they might have actually sold yesterday when the NASDAQ 100 debut actually happened.
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US stock futures, European markets and major tech heavy indexes in Asia are also down today after tech stocks took a beating yesterday. Caitlin says it all points to signs of nervousness among investors.
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I think it's all part of this broader moment in markets right now where investors are just feeling uncertain. So obviously, obviously SpaceX shares took some pain yesterday, but also certainly a lot of the pain has been in chip stocks recently. People are wondering if the big rally that we've seen in memory makers and other stocks tied to the AI boom has gone too far. You know, yesterday as a great example, Samsung gave a rosy picture in its earnings and yet its stock fell. So I think people are setting a higher bar in terms of what they want to see from chip stocks and beyond that, other tech shares.
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And on the AI buildout, second quarter earning reports coming later this month will likely show another period of blowout AI investments. According to consensus estimates from Visible Alpha, Wall street analysts estimate combined spending from Google, Microsoft, Amazon and Meta surged 74% year over year to hit $168 billion in the quarter ending last month. Coming up, why Florida's new push to slash property taxes for homeowners is sparking a debate over who will ultimately pay the bill. Those stories and more after the break.
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Subscribe to WSJ's take on the Week wherever you listen to podcast.
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A U.S. immigration and Customs Enforcement officer fatally shot a Mexican immigrant who the Department of Homeland Security says was trying to evade arrest at a traffic stop in Texas yesterday morning. DHS said Lorenzo Salgado Araujo was in the country illegally and that the ICE officer was acting in self defense after Araujo attempted to ram his vehicle in Houston. DHS and the FBI are both investigating, while a Latino civil rights organization, the League of United Latin American Citizens, has called for an independent investigation into the shooting. We're exclusively reporting that the White House recently pressed top grocers including Walmart and Kroger, to lower beef prices ahead of the Fourth of July holiday. Ground beef prices in May ran 12% higher than last year. The push for lower prices comes alongside broader administration moves to curb consumer prices, including a pledge of $500 million to meatpackers. The cost of medical insurance is expected to rise by double digits next year, adding to a 35% hike this year. Rising health care costs and falling enrollment is driving Affordable Care act insurers to hike premiums. Reductions in federal subsidies have prompted millions of policyholders to drop coverage, leaving insurers with a smaller group of enrollees who are generally less healthy and more expensive to insure. The surging premiums are expected to make healthcare affordability a key focus in upcoming midterm elections. And in Florida, a new measure to slash property taxes in the state has local governments weighing service cuts or increases to other fees and taxes to offset a potential massive drop in revenue. Florida residents will vote on the proposed constitutional amendment in November after the state's Republican led legislature approved the measure last month. Here's Journal Economics reporter Arian Campo Flores.
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It's aimed at homeowners with primary residences in Florida, and it would reduce their taxes by expanding what's called the homestead exemption, which is effectively a reduction in the taxable value of a homeowner's private residence. So that would result in lower tax payments for many homeowners and save them potentially thousands of dollars. But on the other hand, it would also result in much lower property tax revenue for local governments. For the cities and counties that depend on it, property taxes are their main source of revenue and are used to fund everything from police to fire to parks, libraries, road repairs. One state office ran the numbers and calculated that the projected reduction in property tax revenue in the first year that this measure would take effect would be $5 billion statewide.
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Lawmakers revised the original version to protect funding for schools. One county administrator told the Journal that the historic change would not be a haircut, but an amputation. Aryan says local governments are already cutting
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back Even though the measure hasn't been approved by voters, it could be so significant that they're already taking some measures to prepare for it. This includes implementing hiring freezes, freezes on capital projects, on travel. There are many local governments that are currently in their budgeting process, and what they're doing is preparing two different budgets for next year, one if the measure passes, one if it fails.
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GOP Governor Ron DeSantis has argued that rising property tax collections have led to irresponsible spending by local governments. 60% of voters will need to back the amendment for it to pass. A recent poll pegged support among Florida voters at 64%. And that's it for what's news for this Wednesday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sandra Kilhoff, and I'm Daniel Bock for the Wall Street Journal. We'll be back tonight with a new show.
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Until then, thanks for listening.
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How do you prepare for the week ahead?
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On WSJ's take on the Week, we break down the top headlines.
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If the AI narrative hits a wall,
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there's no question in my mind that
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close to recession and we go behind the biggest stories in markets, the economy and finance.
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And I'm Miriam Gottfried.
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I'm very focused on making sure that
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