Trump weighs Iran options

Good morning. President Trump weighs joining Israel’s attacks on Iran. The Federal Reserve is expected to hold borrowing costs again today. And a non-F1 fan reviews the latest F1 movie. Listen to the day’s top stories.

Iran and Israel exchanged fire for a sixth day, with speculation now centering on whether Donald Trump will resort to one of the game-changing weapons at his disposal. The Massive Ordnance Penetrator, better known as the bunker-buster bomb, could deliver a knockout blow to Iran’s nuclear ambitions. Also on the president’s agenda today: a meeting with Pakistan’s army chief for talks on Iran. Read why the once-mighty Hezbollah has stayed out of the war so far.

Federal Reserve officials are widely expected to leave interest rates unchanged again today as they await more clarity on the economic impact of a wide array of the Trump administration’s policy changes. The president will have something to say about that—his latest spin is to focus on the need to reduce the cost of government debt. Meanwhile, rates traders have amassed a record futures bet that the Fed will take on a more dovish tilt right after Chair Jerome Powell’s term ends in May 2026.

Markets update: Oil prices remained near a five-month high on concerns of escalating tensions in the Middle East, while equity futures suggested a moderately positive day ahead. Iran’s crude-exporting infrastructure seem to have been spared so far. Read our explainer on why the Strait of Hormuz is a potential flashpoint.

Elon Musk’s artificial intelligence startup xAI is burning through $1 billion a month due to the high costs of building advanced AI models. The company is now finalizing $4.3 billion in new equity funding, and has plans to raise another $6.4 billion of capital next year. Meanwhile, OpenAI’s Sam Altman said Meta has offered his employees signing bonuses as high as $100 million as it seeks to build a top AI team.

Taipei’s decision to blacklist Huawei and its chipmaker business may be the first of a series of measures tightening the flow of technology to China, widening the US-China tech fight. Meanwhile, China will allow some local investors to put more of their money into overseas assets, and its central bank governor laid out his vision for a new global currency order.

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Deep Dive: Trouble for US Electric Vehicles

President Donald Trump’s orders to unravel policies supporting electric vehicles threaten to turn the US into a laggard for years to come, according to a new report.

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The Big Take

There is no better barometer of global investors’ repudiation of President Donald Trump’s policies than the dollar. The president’s economic agenda is dragging down the dollar and making it more difficult for the US to finance its deficits.

Opinion

Nvidia's CEO Jensen Huang is promoting "sovereign" artificial intelligence, a concept that involves building data centers within national borders to reduce dependence on dominant tech firms from abroad. But if there were prizes for irony, it’s a concept that might win a few, Lionel Laurent writes.

Before You Go

F1: The Movie roars into the cinemas June 27. Helmed by Top Gun: Maverick director Joseph Kosinski with a score from Hans Zimmer, the movie stars Brad Pitt as an aging driver who joins a struggling F1 team. Our reviewer, who acknowledged she didn’t know much about the sport of driving a car very fast around a circuit, explains she is now a fan.

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