NATO on edge for Trump visit

The president is in The Hague today for a top-level NATO meeting at which the military alliance is expected to confirm big increases in defense spending. On the way to the Netherlands, Trump cast doubt on the U.S.’s commitment to Article 5, the part of the NATO treaty that says if one member is attacked, all members must respond. “Depends on your definition. There are numerous definitions of Article 5. You know that, right? But I’m committed to being their friends,” he told reporters on Air Force One.

Trump shares DM from NATO chief

The president also posted on social media an obsequious personal message from NATO chief Mark Rutte welcoming him to the meeting. It calls Trump “truly extraordinary” and says “You will achieve something NO American president in decades could get done.” Read it here.

Leaked Pentagon report downplays Iran bombing

The U.S. air strike on Iran’s nuclear facilities did less damage than the president claimed and probably only set back their development by months, according to a leaked report from the Defense Intelligence Agency. The report suggests that although the entrances to the underground bunkers were caved in the facilities inside remain intact. Trump used social media to insist that the sites were “obliterated.” Meanwhile, the ceasefire between Iran and Israel, briefly broken yesterday, seems to be holding.

Judge rules against Jony Ive and Sam Altman

A federal judge has issued a temporary restraining order against Ive and Altman’s io AI device venture, according to the FT. OpenAI was forced to take down a blog post announcing their deal because it may infringe upon a trademark established by iyO, a startup founded by Jason Rugolo, who is also pursuing a wearable AI device.

Landmark AI copyright decision

A U.S. District Judge has ruled that it was “fair use” for AI company Anthropic to train its models on copyrighted books. That is, as long as Anthropic purchased those books and didn’t pirate them.

Powell talks to Congress

Federal Reserve chair Jerome Powell told Congress on Tuesday that interest rates haven’t been lowered yet because the Fed predicts a “meaningful increase in inflation over the course of this year.” Powell notably declined to comment on President Trump’s policies during the Congressional hearing.

Mamdani beats Cuomo in NYC mayoral primary

Zohran Mamdani is a democratic socialist who wants to raise $10 billion by taxing businesses and the rich.

CEO sentenced to prison for abuse of Rule 10b5-1 plan

Former Ontrak CEO Terren Scott Peizer was given 42 months after a court found that his “safe harbor” stock sale plan had been set up to hide what amounted to insider sales.

• S&P futures were flat this morning, premarket. The S&P 500 was up 1.11% yesterday and is now back above 6,000. Brent Crude was $68 per barrel this morning, remaining below its peak from a few days ago when the U.S. bombed Iran. Stoxx Europe 600 was up 0.15% in early trading. China’s CSI 300 was up 1.44%. Japan’s Nikkei 225 was up 0.39% The VIX “fear index” was down 12% this morning. The Nasdaq Composite regained 1.43% yesterday as tech stocks drove the action. Coinbase was up 12%. Reddit was up 5%.

• Wedbush on Jony Ive and OpenAI’s io: “We believe io (and a number of other vendors like Meta) are looking to create a central device that will govern users' interaction with AI peripherals (one ring to rule them all if you will) with a goal of cannibalizing/displacing the current Android/iOS centered market,” per Matt Bryson and Antoine Legault.
• Apollo on stagflation: “Higher oil prices, higher tariffs, and restrictions on immigration are putting downward pressure on GDP growth and upward pressure on inflation. Lower GDP growth and higher inflation is the definition of stagflation. The upward pressure on inflation is limiting how much the Fed can cut interest rates later this year. As a result, all-in yields will stay higher for longer, which will continue to support fixed income assets, including private credit,” per Torsten Sløk.
• Oxford Economics on the Strait of Hormuz: “In our downside scenario, we assume ceasefire negotiations break down and Iran attempts to disrupt trade with mines and attacks on shipping. … The combination of reduced oil supply, higher shipping costs, plus a surge in the geopolitical risk premium could trigger a spike in oil prices. We estimate prices would average $115 per barrel in Q3, before falling back to $75 by mid next year. This, along with higher gas prices and supply chain disruption, would lift inflation in the US to 5.5% and in the Eurozone to 3.5%. The shock would cause US GDP to flatline in H2, while the real income squeeze would likely result in Eurozone and Japan GDP contracting over the same period,” per Ben May.