Trump Weighs Iran Strikes Before Midterms; Hurricane Isaias Forms in the Gulf

0:02 Bloomberg Audio Studios.

0:04 Podcasts.

0:05 Radio.

0:06 News.

0:10 Good morning, I'm Nathan Hager.

0:11 And I'm Karen Moscow. Here are the stories we're following today.

0:15 And crude oil is on the rise.

0:17 On a report, the White House is considering strikes against Iran before next month's midterm election. We get the very latest from Bloomberg Middle East correspondent, Abir Abu Omar.

0:27 The White House has an Atlantic report suggesting that it has asked the Pentagon to develop strike options against Iran. Iranian targets. This could be exercised ahead of the midterm. So I guess this is the main takeaway out of this report, because it's been widely reported that some kind of attacks are being considered.

0:45 But we all were under.

0:46 The assumption that this would happen after the midterm elections take place next month.

0:51 Bloomberg's Zabir Abu Omar reports the size and targets of potential strikes are still being debated. The Atlantic article also says a limited operation against Iran could still be followed up by more substantial action after the midterms.

1:02 Nathan, there's been substantial action this morning in Saudi Arabia. Iran-backed Houthi militants struck two airports in the kingdom, including the main international airport in the capital, Riyadh. At least three people were killed, dozens more hurt. And we get more from Bloomberg's head of Middle East coverage, Stuart Livingston-Wallace.

1:20 I think it.

1:21 Speaks to sort of the escalation we've seen over the last couple of weeks in particular. With that intense fighting now going on, particularly in the sort of that coastal area around the Bab al-Mandeb, as the internationally backed coalition tries to push back the Houthis, they seem to be making some headway. But again, we know from history it's going to be a difficult thing to achieve.

1:41 And Bloomberg's Stuart Livingston-Wallace reports the Saudi-led coalition in Yemen has retaliated for the airport attacks, claiming strikes on 82 Houthi targets across Yemen.

1:50 Turning to domestic politics now, Karen, the midterm election is now just 26 days away. And President Trump went down to San Antonio, Texas last night to boost Republican Ken Paxton's struggling Senate campaign. He gave a forceful defense of his immigration policies. Less than two years ago, we inherited the worst border in American history.

2:10 And today we have the safest border, the best border in the history of our country.

2:15 We've never had anything even close.

2:17 President Trump repeated attacks against Paxton's Democratic opponent, James Talarico, who he derided as Talafrico.

2:24 A vote for Talafrico is a vote to turn Texas into.

2:29 A dirty, failing, crime-ridden, third-world dumping ground.

2:32 This was President Trump's latest trip to a red state in the midterm campaign. Though San Antonio is a Democrat-leaning city, protesters interrupted his remarks several times.

2:44 Any more paid protesters, please raise your hand and get the hell out of here.

2:49 A recent poll showed James Tallarico with a narrow edge over Ken Paxton in a state that has not elected a Democrat to the Senate since 1988.

2:56 Nathan, the Democratic National Committee filed a lawsuit accusing the Trump administration of unlawfully using government money to pay for video advertisements. The ads feature positive images and messages about Trump and his presidency and include a disclosure that they were paid for by the United States government. The president announced this week that he would use personal funds and money from his Super Political Action Committee for future ads, but the DNC alleged that more ads already have been produced by a government contractor.

3:27 Well, another important situation we're following is a hurricane that has formed off the U.S. Gulf Coast, and Bloomberg meteorologist Craig Allen is tracking the storm.

3:37 Isaias is now the first hurricane of the 2026 tropical season.

3:42 That's a record to form this late.

3:44 And the hurricane is still over hot water in the Gulf, so intensification is likely. So far, ISA-ES has been moving east-northeast, but will start bending left or northbound over the next 24 hours. And that will take the center towards the U.S. Gulf Coast during Friday. So tropical storm, hurricane, and storm surge warnings are now in effect from about New Orleans to Tallahassee. And for the mid-Atlantic and northeast states, the hurricane will weaken over land, so the only threat we expect here is for tropical rains later in the weekend from D.C.

4:17 To New York to Boston.

4:18 That's Bloomberg meteorologist Craig Allen, and the Federal Marine Minerals Administration says the hurricane has forced offshore producers to shut roughly 25 percent of crude output and 16 percent of natural gas production throughout the region.

4:32 Now to a story that's caught the world's attention, Nathan. A suspected case of deadly plague in remote Russia. The World Health Organization is pressing for more information on the death of a worker at a plague lab in Siberia. Russia says there have been no cases of plague in the region and the 200 contacts who had been quarantined have been cleared. But WHO Director General Tedros Adhanom Ghebreyesus says his agency needs to know more.

4:59 WHO has requested further information on the lab tests conducted on the individual who died and the contacts, more detail on what prompted the public health measures, and details about the health status of the contacts.

5:15 Dr.

5:15 Tedros Ghebreyesus with the WHO. President Trump says Russia is not saying much about the case, but says it has it under control. He says he does not think the plague lab was dealing with a bioweapon.

5:27 Now a Bloomberg exclusive, Karen.

5:29 Bloomberg News has learned China managed to get a hold of parts from an F-35 stealth fighter jet after a UPS employee missed an email warning not to route the shipment through Hong Kong.

5:39 We get more from Bloomberg's Nicole Tsai.

5:42 A cockpit canopy and weapons bay door from an Australian F-35 were being shipped to the US for inspection, repair, or disposal. But instead, the UPS shipment stopped in South Korea and then was diverted to Hong Kong. The Chinese government later took possession of the parts and so far hasn't returned them. It's still unclear why the shipment was diverted or whether it was an accident. A Lockheed Martin spokesperson said the parts are unserviceable and deemed low risk for exploitation.

6:08 But the components.

6:09 Contain radar-absorbing material that helps give the F-35 its stealth capabilities. And Beijing's physical access to those parts could potentially help it understand how some of that stealth technology works.

6:20 Bloomberg's Nicole Tsai notes the shipment of warplane parts was originally meant to travel to San Francisco through South Korea and Taiwan, both U.S. defense partners, but the shipment was late leaving Australia and was mistakenly routed through Hong Kong in an effort to speed delivery.

6:34 Well, Nathan, in sports, make it 17 years now that the Yankees have failed to win a World Series. They got swept at home by Tampa Bay last night, and Bloomberg's John Stashower joins us with the recap. John, good morning.

6:47 Good morning, Karen.

6:47 It was a game where the Yankees twice tied the score and thought they had done it again in the sixth inning when a home run was taken away due to fan interference.

6:56 In the end, it was the Rays who celebrated. He struck him out swinging. The Tampa Bay Rays, for the third.

7:02 Time in franchise history, are headed to the American League Championship Series. Win number 101 eliminates the New York Yankees here in the Bronx.

7:13 And Rays Radio had the call. 4-3, Tampa Bay victory in a series sweep. So another October disappointment for the Yanks. They're 17 years, one year shy of a tie for the longest drought since the first of their 27 championships over a century ago.

7:26 Coming up in sports, more on that home run that wasn't. John Stasch, Bloomberg Radio. Now do we have to?

7:31 All right, thank you, John. Well, let's turn to the markets now. Futures are lower this morning after... yesterday's losses on Wall Street. Higher oil prices have helped send stocks down. The 30-year Treasury yields back to its highest level in almost 25 years. Treasury Secretary Scott Besson talked about borrowing costs in the Oval Office.

7:49 First of all, it's a global phenomenon.

7:51 And since President Trump came in, the U.S. has been the best performing bond market in the 10-year space. And we can see that for the U.S., unlike the other countries, it's a.

8:02 Real rate issue. So it's because of growth. Growth here is strong.

8:07 That's Treasury Secretary Scott Besson checking the 10-year right now. It's up four basis points at 5.32 percent. The two years at 4.8. The 30-year, the long bond at 5.7 percent.

8:20 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 John Tucker. John, good morning.

8:27 Good morning, Karen. New York City Mayor Mamdani igniting protests when he issued a statement marking the third anniversary of the deadly October 7th attacks on Israel. His post on social media focusing largely on the suffering of Palestinians in Gaza. At a remembrance ceremony in Union Square last night, the mayor is met by both Jewish and pro-Palestinian protesters. TikTok being accused of running a secret experiment on teen users.

8:57 New York Attorney General Letitia James adding new allegations to a child safety lawsuit. The claims are attributed to a Bloomberg Businessweek report based on a confidential TikTok document. New details about the convicted killer who was supposed to be put to death last week in Tennessee but survived. An update from Bloomberg's Matt Piper.

9:16 The attorney for Krista Pike says she was angry and confused after regaining consciousness following the failed execution attempt. Randy Spivey says the 50-year-old has suffered enough and wants the governor to commute her sentence. Pike, who was sentenced to death for the 1995 beating and stabbing death of classmate Colleen Slemmer, is aware of what happened to her at least up to a point, Spivey says. A judge told the state to save evidence from the execution attempt. Matt Piper, Bloomberg Radio.

9:41 Officials in the upstate New York town that's home to Cornell University placed a moratorium on permits for some student parties. Local leaders there scrutinizing how the Ivy League school handled 2024 allegations from a former student who says she was gang raped at a fraternity. Global News 24 hours a day and whenever you want. it with Bloomberg News Now.

10:01 I'm John Tucker. This is Bloomberg.

10:03 Karen. All right, John. Thank you. Time now for the Bloomberg Sports Update. We welcome back in John Stashower. John, good morning again.

10:14 Good morning, Karen.

10:14 Never at any point of the ALDS with Tampa Bay did the Yankees have a lead. In Game 3 at the stadium, they tied the Rays on a Ben Rice RBI single and then again on a Spencer Jones RBI double. Sixth inning, it appeared Anthony Volpe had hit a game-tying two-run homer, but the umpires called for a review.

10:31 After review, we have spectator interference.

10:46 And reached over. The ball rolled up his arms.

10:48 Volpe went back to second and the Yanks lost 4-3. The Rays swept the series and then it was time for the annual Aaron Boone post-mortem.

10:57 You know, it's a broken clubhouse.

11:01 You just, what you go through as a team, as a family over the last eight, nine months getting ready for this.

11:08 And, you know, there's just... It's the worst.

11:14 Since the Yanks won the World Series in 09, they've lost five times in the ALCS and five in the ALDS, twice in the wildcard, of course, two years ago in the World Series.

11:22 Cleveland stayed alive.

11:24 Seven pitchers combined for 19 strikeouts and a 9-3 win over the White Sox, who still have not clinched a postseason series at home since 1906. Another chance tonight up 2-1. Like last year, it'll be the Dodgers and Brewers in the NLCS. LA's eighth straight series win.

11:39 Beat Atlanta 4-1.

11:40 Milwaukee won 3-1 at San Diego. Looked like Manny Machado had a game-tying two-run homer eighth inning. It was caught at the wall. Overtime in the WNBA playoffs, the Liberty lost in Atlanta.

11:50 Trailed a series 2-0.

11:51 Odell Beckham released by the Giants, signed with Minnesota. The big college game Saturday is Georgia at Alabama. As of now, still on despite the expected storm. John Stasch, Bloomberg Sports.

12:03 All right, John, thank you.

12:06 Stay with us. More from Bloomberg Daybreak coming up after this. Coast to coast on Bloomberg Radio. Nationwide on Sirius XM.

12:19 And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak.

12:25 Good morning.

12:25 I'm Nathan Hager on a morning where the oil market is under more pressure on a report the U.S. may be discussing new strikes on Iran before the midterm election, now less than four weeks away. That's as Iran-backed Houthi militants step up attacks on civilian sites now in Saudi Arabia. Joining us from London is Bloomberg's head of Iran coverage, Golnar Motavali.

12:44 Thanks for joining us this morning, Golnar.

12:46 What to make of this report in The Atlantic magazine that President Trump is considering strikes sooner rather than later? I think we've seen him sort of go back and forth on where he is in his decision mode on Iran.

12:58 Good morning.

12:59 Good morning, yeah, and I think that's one of the issues here because of that back and forth and the fact that, you know, literally every day we get a different type of statement. We have to kind of be slightly cautious. At the same time, obviously, it does feel like a response to escalation of violence and strikes by the Iranians, specifically in the Strait of Hormuz, and obviously these attacks on Iran airports in Saudi Arabia, which is quite a significant escalation given the fact that we've had a lull in direct military engagement in the past couple of months or so. And I think what might be going on here is that because the Iranians have pretty much been expecting a resumption of US military strikes on

13:50 Iran at some point. I think this is their effort to preempt that escalation, to almost control or decide when it's going to happen and how it's going to happen. And what we're seeing from Trump is possibly a response to this. So it's almost, I think, possibly the Iranians calling his bluff. And this is possibly his comments are a way of signaling to the Iranians that, you know, I just might just start striking earlier than you expect me to. And in that case, we may be looking at a wider escalation, a resumption of the war proper before we may have expected to.

14:33 Well, do we have a sense at this point that Iran is calling the U.S.

14:37 Bluff?

14:38 We've seen reports that a third carrier strike group is headed to the region now, and these reports as well of Iran. stepping up strikes around the Strait of Hormuz. How significant are these strikes? Are they having a real impact on the ground?

14:54 I mean, they are significant. They're definitely having an impact on the market. I mean, certainly in terms of the cost of, you know, freight rates. We've seen oil tick up again.

15:05 Today.

15:06 Even if the level of oil shipments coming through the straits, as we've reported recently, are getting closer gradually to pre-war levels, it's the fact that Iran is driving so much of the uncertainty that's still kind of keeping a chill in the market. So, there's definitely significance there on the ground.

15:31 And of course, it matters. We're looking at a wider war have got involved. And since they have also kind of brought that level of uncertainty and military risk in a much more elevated way to the Bab al-Mandab Strait, that's affected Saudi directly. Saudi is now directly involved in this broader front and engagement. So, it's definitely having an impact on the ground. I think a lot will depend on whether escalation of rhetoric and strikes and threats between the Iranians and the Trump administration that will kind of almost push them to some sort of the same pattern we've had before in the past year to announce that they're going to have talks or At the last minute, there's going to be so much intervention behind the scenes

16:26 diplomatically from GCC straights who are frankly desperate for this conflict to end that we will see another kind of round of talks. But that doesn't mean that there's going to be an end to the conflict. It just means that we may have this kind of holding pattern of escalation in the straights, talks that don't go anywhere, escalation, talks...

16:46 that don't go anywhere, kind of continue for the foreseeable future. Iran's economy can probably take more. I think what Iran's economy won't be able to take is a devastating strike on some critical infrastructure that was not targeted in the first few months of the war. So there's still space there to cause a debilitating impact. on the Iranian economy.

17:12 But I think there's a sense within the Iranian leadership that they will take it because we have to remember they have not transitioned and switched to a wartime economy. They're not on a war footing economically speaking yet.

17:29 This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond.

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18:16 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.