Where the Middle East Conflict Leaves Trump’s Foreign Policy

Summary

WSJ What’s News: Where the Middle East Conflict Leaves Trump’s Foreign Policy
Release Date: June 13, 2025

The latest episode of WSJ What’s News delves deep into the escalating Middle East conflict, examining its ramifications on President Donald Trump's foreign policy, global markets, and emerging corporate trends in cryptocurrency. Hosted by Alex Osola and featuring insights from key Wall Street Journal reporters and columnists, the episode provides a comprehensive overview of the day's most pressing issues.

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1. Escalation in the Middle East: Iran and Israel at Odds

Alex Osola opens the discussion by highlighting the severe tensions arising from Iran's retaliation against Israel's airstrikes. The conflict has intensified with Iran firing ballistic missiles into central Tel Aviv and northern Israel, marking a significant escalation never before witnessed by the Israeli Defense Forces.

• Dov Lieber, WSJ reporter on the ground in Israel, describes the harrowing situation:
  “Over the past hour, we've seen a major escalation. Iran has sent three different salvos, each dozens of ballistic missiles at Israel... The savos keep coming, the third in just one hour.” (01:23)

As a result, the nation is on high alert, with citizens seeking refuge in bomb shelters amid continuous missile attacks. Israeli Defense Minister Israel Katz condemned Iran’s actions, stating, “Iran had crossed a red line by firing missiles at populated civilian areas in the country.” (00:26)

2. President Trump’s Foreign Policy Under Scrutiny

The conflict places President Trump in a delicate position, challenging his long-standing campaign promise of being the "peace president."

Alex Leary, another WSJ reporter, elaborates on the implications for Trump's administration:
“This puts President Trump and his administration in a very tough position. They had tried for months to negotiate a deal with Iran and it didn't materialize.” (04:30)

Trump has urged Iran to reach a nuclear agreement, issuing a “60-day ultimatum” that coincided with the recent attacks:
“I told the other side, you have 60 days to make a deal. On the 61st day they attacked today.” (03:20)

This situation has exposed divisions within Trump's political base, particularly between those advocating for reduced international engagement and traditional Republican conservatives who favor a robust US presence in global affairs.

3. Market Turmoil: Stocks Down, Oil Prices Soar

The geopolitical tensions have had immediate repercussions on global markets. Alex Osola details the market's reaction:

• Stocks: Major US indices closed lower, with the S&P 500 down 1.1%, Nasdaq dipping 1.3%, and the Dow dropping approximately 1.8%.
• Safe Havens: Investors flocked to gold, which rose by 1.5% to a new record high, and the US dollar strengthened.
• Oil Prices: Brent crude futures surged by 7%, reflecting fears of a potential oil crisis reminiscent of the 1970s.

To provide deeper analysis, WSJ investing columnist Spencer Jacob comments:
“Whenever you have scary headlines coming, particularly out of the Middle East... Iran is a major crude producer. So any involving Iran, involving military conflict, obviously is going to get the market excited.” (07:04)
He further reassures that while oil prices have spiked, it's unlikely to mirror the drastic increases of past crises:
“A spike of a few days or a few weeks really has a pretty fleeting effect on inflation.” (07:42)

4. Corporate Ventures into Cryptocurrency: Walmart and Amazon’s Stablecoin Plans

Shifting focus from geopolitical tensions to financial innovations, the episode explores major corporations' interest in launching their own stablecoins.

Anamaria Andriotis, WSJ reporter, explains the motivations behind this trend:
“These large companies are looking at stablecoin... because of a bill, the Genius Act, which is widely looked at as a law that would create the sort of foundational groundwork for stablecoin to actually take off in the US.” (08:52)

The potential introduction of corporate stablecoins by giants like Walmart and Amazon aims to reduce dependency on traditional financial systems, thereby saving on transaction fees. However, this poses a significant threat to banks, which could lose a portion of their revenue from payment processing.

Anamaria adds:
“The biggest risk to banks should stablecoins become a reality in consumer to merchant payments is that banks would lose out on a portion of the revenue they're already receiving.” (09:48)

5. Additional News Highlights

The episode also covers:

• Air India Boeing 787 Dreamliner Crash: Investigators have recovered the flight recorders, a crucial step in determining the cause behind the tragic incident that resulted in over 260 fatalities.
• President Trump’s Military Parade: Scheduled for the following day, the event has sparked nationwide protests organized by progressive groups under the banner of "No Kings Day." These protests aim to counteract what organizers view as Trump's overreach, with far-right factions threatening potential violent responses.

6. Looking Ahead: Upcoming Content

Listeners are teased with upcoming segments, including:

• Weekly Markets Wrap-Up: Analyzing the ongoing impact of current events on global markets.
• What’s News Sunday: A deep dive into the integration of artificial intelligence into the physical world and its economic implications.

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Conclusion

In this episode, WSJ What’s News effectively captures the multifaceted impact of the Middle East conflict on global politics, US foreign policy under President Trump, and economic stability. Coupled with emerging trends in the corporate adoption of cryptocurrency, the podcast offers listeners a thorough analysis of the current geopolitical and financial landscape.

Produced by Pierre Bienname, with contributions from Michael Kosmides, Michael Lavalle, Aisha El Moussleem, Scott Salloway, Chris Inslee, and Falana Patterson.

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Note: Timestamps are included to reference specific parts of the transcript for clarity.

Transcript

[Alex Osola]

As Iran retaliates to Israel's airstrikes, is the Middle east conflict leading to a new oil crisis. Plus, how the attacks push President Trump into something he has long avoided.

[Alex Leary]

President Trump campaigned on saying he was going to be the peace president. Now for the first time, he's got a real conflict that happened on his watch. So a lot of people will be watching to see how he proceeds and how he handles it.

[Alex Osola]

And companies like Walmart and Amazon are exploring launching their own stableco. Friday, June 13 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 today. We start this evening with developments in the Middle east, the ongoing strikes in Israel and Iran, where this leaves the US and the impact on markets. First, we go to the situation in Israel where central Tel Aviv was impacted by ballistic missiles from Iran. Israeli paramedics say they were treating five injured people. A US Official said the US Provided some air defense to Israel. Israeli Defense Minister Israel Katz said Iran had crossed a red line by firing missiles at populated civilian areas in the country a few hours ago. As those missile attacks were in progress, we spoke to WSJ reporter Dov Lieber on the ground in Israel.

[Dov Lieber]

Over the past hour, we've seen a major escalation. Iran has sent three different salvos, each dozens of ballistic missiles at Israel. That's at central Israel and northern Israel. I'm not so sure Israel has really ever experienced an attack like this. We saw already that the first salvo that hit central Israel. Some of those missiles penetrated Israel's air defenses and landed directly in the center of Tel Aviv. I'm sitting somewhere in northern Israel. I don't want to say exactly where, but I could also hear explosions over my head just a few minutes ago, maybe a dozen or 10 explosions right now. The Savos keep coming, the third in just, in just one hour. And the whole country is basically camped out in bomb shelters like myself right now. We are indefinitely camped out in our bomb shelters at this point in time.

[Alex Osola]

The Supreme Leader of Iran, Ayatollah Ali Khamenei had said earlier that Israel should expect severe punishment for its wide ranging strikes on the country's nuclear program and military leadership. In waves of strikes that continued throughout the day, Israel killed the head of the Islamic Revolutionary Guard Corps and struck dozens of targets. Israeli Prime Minister Benjamin Netanyahu said the military operation would last as many days as it takes. A senior Israeli official said Israel planned 14 days of operations in the U.S. republican senators said they strongly supported Israel's decision, while some Democrats were more critical and said that the US should have upheld its nuclear deal with Iran. Senate Minority Leader Chuck Schumer, who has been an outspoken critic of Netanyahu, said in a statement that the US Commitment to Israel's security and defense, quote, must be ironclad. Meanwhile, President Trump urged Iran's leadership to make a deal, quote, before there is nothing left, saying Israel had access to lethal military equipment manufactured by the US and that they know how to use it. WSJ reporter Meredith McGraw covers the White House, and she spoke this morning to President Trump about the attacks.

[Meredith McGraw]

When I spoke with the President, he wanted to make clear that he felt that Israel's attack on Iran was, quote, very successful. And then he immediately went into talking about the fact that he had put a 60 day ultimatum for Iran to reach some sort of nuclear agreement. And he said, quote, I told the other side, I said, you have 60 days to make a deal. On the 61st day they attacked today is 61. And he also, I want to say, sounded optimistic that they could potentially still make a deal. Although there were some ominous undertones. The President had made clear both publicly and privately, that he did not support Israel making an attack. But I wanted to know if he had been given any sort of heads up from the Israelis. And he said, quote, it wasn't a heads up, it was, we know what's going on. He wanted to make clear that, of course, the US Was aware of the situation.

[Alex Osola]

So where did the latest developments leave President Trump and American foreign policy? White House reporter Alex Leary is here to discuss.

[Alex Leary]

This puts President Trump and his administration in a very tough position. They had tried for months to negotiate a deal with Iran and it didn't materialize, to the frustration of a lot of people, including a lot of Republicans on the Hill, who wanted to see the President take a more aggressive posture, align more with Israel.

[Alex Osola]

President Trump has long said that the US should pull back from global entanglements. And yet with this conflict, it seems very possible that he could get pulled in. Right?

[Alex Leary]

Right. That's the one big worry, that the US Gets drawn into this conflict and it becomes something more like a war in the Middle East. President Trump campaigned on saying he was going to be the peace president. He said that the war in Ukraine would have never happened if he were in office, that Hamas wouldn't have done its attacks on Israel. So he made a lot of major promises on the and said that he was going to be the peace president and use peace through strength to achieve that. Now, for the first time, he's got a real conflict that happened on his watch. So a lot of people will be watching to see how he proceeds and how he handles it. I'll also mention that this has created a real division among his political base, the MAGA base. A lot of his supporters really bought into the notion that the US shouldn't be engaged internationally as much as it had been in the past. So there's a division between those folks and those who are more traditional Republican conservatives on foreign policy and want to see a robust feeling the US Take the lead on and fighting back.

[Alex Osola]

That was WSJ reporter Alex Leary. Thank you, Alex.

[Alex Leary]

My pleasure.

[Alex Osola]

You can follow the latest in this developing story on the live blog on WSJ.com, we'll leave a link in the show.

[Alex Leary]

Notes.

[Alex Osola]

Stocks retreated today after Israel and Iran traded attacks. Investors rushed to safe havens that they perceive to be less risky. Gold rose 1 1/2% to a new record, and the dollar strengthened. Oil prices jumped with brent crude futures rising 7%. The CBO volatility index, known as the VIX or Wall Street's fear gauge, jumped, signaling rising investor caution. Major U.S. indexes closed lower. The S&P 500 fell about 1.1%, the Nasdaq dipped 1.3%, and the Dow dropped roughly 1.8%. To discuss the impact that the attacks have had on the markets, I'm joined by WSJ investing columnist Spencer Jacob. So, Spencer, as expected, markets are down, safe havens are up, oil is up. Where do things go from here? Could we expect another oil crisis like it's the 1970s again?

[Spencer Jacob]

Whenever you have scary headlines coming, particularly out of the Middle east, occasionally Venezuela and Russia, oil tends to spike. And Iran is a major crude producer, more than 3 million barrels a day. It exports more than one and a half million barrels a day. So any involving Iran, involving military conflict, obviously is going to get the market excited. But it's doubtful that this will turn into an oil crisis anything like the ones that we've seen in the past. And nothing at all like the 1973 Arab oil embargo that saw oil prices quickly quadruple.

[Alex Osola]

What kind of impact might rising oil prices have on inflation, though?

[Spencer Jacob]

Oil is a part of everything we buy. It's part of the cost of transporting things. It's obviously cost at the pump, affects the price of air tickets, plastics, have you. But oil prices have not really jumped that much. If you zoom out even slightly, we're flat for the year, oil prices had been on a downward trend in part because of very high production. A spike of a few days or a few weeks really has a pretty fleeting effect on inflation.

[Alex Osola]

That was WSJ investing columnist Spencer Jacob. Thank you, Spencer.

[Spencer Jacob]

Thank you.

[Alex Osola]

Coming up, why companies like Walmart are interested in launching their own cryptocurrency. That's after the break. Crypto may be going corporate. We're exclusively reporting that Walmart, Amazon, Expedia and other multinational giants are exploring whether to issue their own stablecoins in the US that's according to people familiar with the matter. For more, I'm joined by WSJ reporter Anamaria Andriotis. Anna Maria, why are these companies looking to do this and why now?

[Anamaria Andriotis]

These large companies for many years on and off have been looking at a variety of alternative payment options to what essentially are the normal ways that they get paid. They look for other payment options, saving on the fees that they pay. But right now, the reason why these large merchants are looking at stablecoin is because of a bill, the Genius act, which is widely looked at as a law that would create the sort of foundational groundwork for stablecoin to be able to actually take off in the US As a mainstream currency.

[Alex Osola]

It seems like the big advantage for some of these companies would be that these corporate coins would save them money by taking payment activity away from the traditional financial system. What would that mean for banks then?

[Anamaria Andriotis]

The biggest risk to banks should stablecoins become a reality in consumer to merchant payments is that banks would lose out on a portion of the revenue they're already receiving. But it has to be stressed there have been so many attempts alone in the last decade or so to try to create a payment system that is outside of this very ingrained visa, MasterCard, American Express type of payment system. Pretty much all of them have failed. But the opportunities for cost savings for merchants are big and the risk of losing significant revenue is certainly very much present and one could argue, growing for the biggest banks as crypto, whether it's stablecoin or other forms of crypto, are increasingly being looked at as is this the future of how people and merchants transact?

[Alex Osola]

That was WSJ reporter Anamaria Andreotis. Thank you, Anamaria.

[Anamaria Andriotis]

Thank you.

[Alex Osola]

In other news, investigators probing the deadly crash of an air India Boeing 787 Dreamliner have recovered the aircraft's flight recorders, a key step in determining the cause of the tragedy that killed more than 260 people. Air accident investigations can last months and often point to a number of factors contributing to a crash, like possible crew missteps and maintenance errors. And finally, boasting tanks, cannons, soldiers and fireworks. President Trump's military parade tomorrow is designed to be a spectacle. Opponents to Trump want their nationwide protests that day to be an even bigger one. Progressive groups have organized protests in over 2,000 cities across the US dubbed no Kings Day, the protests aim to reject what organizers say is Trump's overreach. Meanwhile, far right groups are using social media to discuss responses potentially violent to the rallies against President Trump. Some extremist groups appear to be capitalizing on escalating emotions and at times destructive protests in LA as a recruitment opportunity or to promote the mass deportation of immigrants living in the US Illegally. And that's what's news for this week. Tomorrow, you can look out for our weekly Markets wrap up, what's news in Markets. Then on Sunday, we'll be discussing how artificial intelligence is coming to the physical world and who stands to make big money on physical AI. That's in what's New Sunday. And we'll be back with our regular show on Monday morning. Today's show is produced by Pierre Bienname with supervising producer Michael Kosmides. Michael Lavalle wrote our theme music. Aisha El Moussleem is our development producer. Scott Salloway and Chris Inslee are our deputy editors. And Falana Patterson is the Wall Street Journal's head of news audio. I'm Alex Osola. Thanks for listening.