Episode summary
US Retaliates Against Iran Strikes; Investors Spooked by Warsh Hold | Bloomberg Daybreak: US Edition
Bloomberg Daybreak: US Edition
· · 16 min
Summary
The U.S. escalated the confrontation with Iran by striking dozens of Iranian military targets in a two-hour operation after Iran’s missile attack on a U.S. base in Jordan. The report said the strikes stopped short of bridges and other civilian infrastructure, while fresh concern spread after two liquefied natural gas tankers were hit by drones off Egypt’s Mediterranean coast. The defense buildup also fed into a major Pentagon contracting push, with roughly $135 billion in new agreements for missile and submarine production.
Markets were rattled by the Federal Reserve’s decision to keep rates unchanged and by the tone of the press conference that followed. The long bond sold off sharply, with investors questioning the Fed’s commitment to tackling inflation and pushing Treasury yields to multi-decade highs. The guests said the market read the chair’s comments as a credibility test, while stocks and the dollar moved lower.
Big tech earnings produced a stark split. Microsoft rallied after Azure revenue rose 43% and management said capacity is expanding quickly while spending came in below expectations. Meta fell after a weaker revenue outlook and the lowest free cash flow in years, reinforcing worries that its AI spending is outpacing near-term returns. The show also previewed Apple and Amazon earnings and covered developments in Washington, including the stalled Todd Blanch nomination and Anthony Fauci’s refusal to testify.
Key takeaways
- The U.S. struck dozens of Iranian targets after Iran’s missile attack on a U.S. base in Jordan, and the guest said the confrontation now looks more escalatory than temporary.
- Two LNG tankers were hit by drones off Egypt’s Mediterranean coast around the same time, adding to fears that the conflict is spreading beyond direct U.S.-Iran exchanges.
- The guest said bond investors are questioning the Fed’s credibility after the chair left inflation concerns unresolved and three committee members dissented.
- Microsoft rose because Azure revenue grew 43% and the company said it is adding capacity faster while reducing expected capital spending.
- Meta fell after its revenue outlook disappointed and free cash flow hit its lowest level in years as AI spending continues to rise.
- The Pentagon announced about $135 billion in new contracts for Patriot interceptors and nuclear submarine production as the war strains weapons stockpiles.
Notable quotes
“The US military did strike military targets. It stopped short of targeting bridges, civilian infrastructure”
“we're still seeing measured attacks on both fronts by Iran and by the United States, but definitely not a positive sign because we're seeing an escalation”
“The markets questioning Worsh's credibility. Investors sent the long bond yield to a 19-year high”
“the company is quickly increasing its data center capacity. We're also bringing capacity online faster than ever”
“Our investments in AI are accelerating every major part of our core business”
How the episode opens
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, we begin with retaliation in the Middle East. The US has hit dozens of Iranian targets in a 2-hour operation following Iran's surprise ballistic missile attack on a US base in Jordan this week. President Trump had warned the US would be hitting Iran, quote, very hard. Israeli Prime Minister Benjamin Netanyahu says he stands behind the president.
We're partners. We're allies. He's the senior partner. It's the United States of America. Let's not forget. And I'm a junior partner, but I'm the prime minister of Israel. And when I have to stand up for the interests of my country and the security of my country, I do so.
Israeli Prime Minister Benjamin Netanyahu spoke in an interview with ABC News. We get the very latest from Bloomberg Middle East correspondent Air Abu Omar in Dubai.
The US military did strike military targets. It stopped short of targeting bridges, civilian infrastructure. So for the time being, we're still seeing measured attacks on both fronts by Iran and by the United States, but definitely not a positive sign because we're seeing an escalation.
That ceasefire that was signed or that temporary ceasefire that was signed in Switzerland seems to be a thing of the past now. And Bloomberg Zabir Abu Omar reports two liqufied natural gas tankers were hit with drones off Egypt's Mediterranean coast around the same time as the US attacks. There has been no claim of responsibility.
Well, Nathan, as the war takes a toll on the US weapons stockpile, the Defense Department announced two massive contracts worth about $135 billion to major US defense companies. The Army reported a $ 59 billion agreement with Loheed Martin to bolster production of Patriot Interceptors.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- iran retaliation
- treasury selloff
- fed rates
- meta ai spending
- microsoft azure growth
Companies and tickers mentioned
- META
- MSFT
- Meta
- Microsoft
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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