Evening Briefing: Americas

President Joe Biden announced Tuesday that Israel and Hezbollah had agreed to a US-mediated cease-fire that would “end the devastating conflict” in Lebanon. More broadly, Biden said the US “remains prepared to conclude a set of historic deals with Saudi Arabia to include a security pact and economic assurance” for the region. Israel agreed to a deal for a 60-day cease-fire after weeks of talks, a first step toward ending a conflict in which Israel has killed at least 3,100 Lebanese, often in bombing raids striking densely packed residential neighborhoods. In the hours before Biden spoke, the Israeli air force conducted some of its heaviest strikes yet on Beirut and its suburbs. The war in Gaza, where at least 44,000 Palestinians have been killed in the war between Israel and Hamas, continues. Cease-fire talks there between Israel, which invaded shortly after Hamas attacked it on Oct. 7, 2023, killing 1,200 Israelis, have repeatedly failed to yield an agreement. —David E. Rovella

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Russia’s Defense Ministry threatened a response to Ukraine’s recent attacks using US-supplied ATACMS missiles on air defense units in the Kursk border region. Ukraine fired five of the US-made long-range missiles on Saturday, targeting an S-400 battalion near Lotarevka, northwest of Kursk, Russia said. Two of projectiles hit their targets, damaging a radar and resulting in casualties, according to the Kremlin. With Kyiv’s forces on the back foot in Vladimir Putin’s 33-month long war, one in which Russians have killed tens of thousands of Ukrainians, the outgoing Biden administration authorized the use of the missiles. Putin, who recently called in North Korean forces to fight for him, has resumed threats to use of nuclear weapons.

President Claudia Sheinbaum suggested Mexico could respond to Donald Trump’s threatened tariffs with levies of its own, warning the economic consequences would be dire. Sheinbaum, reading aloud Tuesday from a letter she intends to send to the US president-elect after he vowed to slap 25% tariffs on all goods from Mexico and Canada, said cooperation would be a better way to curb the flow of migrants and illegal drugs. “One tariff will be followed by another in response, and so on until we put common companies at risk,” Sheinbaum said at her daily press conference in Mexico City. “The main exporters from Mexico to the US are General Motors, Stellantis, and Ford Motor Co., which arrived 80 years ago. Why put in place a tariff that puts them at risk?”

Governor Gavin Newsom is positioning California as a foil to Trump’s plan for a far-right policy shift, laying the groundwork for resistance on everything from deportations to regulation rollbacks. On Monday, the Democratic governor delivered a plan that squarely touches on Elon Musk’s Tesla: a rebate for electric-vehicle buyers if Trump repeals a federal subsidy. Notably, the proposal includes market-share limitations that would leave out popular Tesla models. The exclusion marks another turn in the fraught relationship between Newsom and Elon Musk, Trump’s wealthiest donor.

Gavin Newsom Photographer: David Swanson/Bloomberg

Millennium Management is backing two new investment teams with about $1.8 billion as the multistrategy hedge fund giant deploys more cash both inside and outside the firm. New York-based Scopia Capital Management is said to be getting about $1 billion to manage externally for Millennium. A growing number of standalone hedge funds are landing cash from “multistrats,” which are flush with capital and seeking to parcel out some of their money to outside talent. Millennium is one of the most aggressive in doing so, with external managers representing about a tenth of its more than 330 investment teams. Many of the outside traders run capital exclusively for the $70.2 billion firm.

A group of former Google and Stripe executives who helped build the Android platform have raised $56 million for a new company focused on developing an operating system for artificial intelligence agents. The San Francisco-based firm is set to come out of stealth mode on Tuesday and announce that it’s raised a large seed round led by Index Ventures and co-led by Alphabet’s growth investment fund, CapitalG. Dozens of angel investors also participated in the round. A growing number of tech companies are building so-called AI agents that can perform tasks such as booking a flight or writing code with minimal human input.

Stocks closed at all-time highs Tuesday as investors appeared to set aside deep concern over what Trump’s tariff plan will do to American companies and instead cheered Israel’s decision to accept a cease-fire in Lebanon. Equities extended gains into a seventh straight session, with the S&P 500 notching its 52nd record this year. In the afternoon, Dell Technologies reported worse-than-expected sales while HP and CrowdStrike Holdings gave lackluster outlooks. Here’s your markets wrap.

Wall Street prognosticators tend to huddle around the consensus, afraid to stand out for fear of being wrong. Then there’s Tom Lee. The chief investment officer at Fundstrat Capital has made his name with bold calls (the S&P 500 at 15,000; Bitcoin to $10 million). His bullish takes have drawn legions of followers. Now, the former JPMorgan strategist is looking to cash in with a new exchange-traded fund that’s raked in more than $400 million in less than a month.