Good morning. Big banks are trying to get out of the crosshairs of Republican states that are cracking down on companies for “woke” policies that conservative policymakers say are illegal and discriminatory.

• What’s happening: Representatives from JPMorgan Chase, Citigroup, Wells Fargo and other big banks met in recent weeks with officials in states including Texas and Oklahoma to defend against allegations that they refuse to do business with industries such as gun manufacturing and fossil-fuel extraction, people familiar with the discussions said.
   
• Their concerns: Banks are also worried about a bigger threat: that President Trump could turn the power of the federal government against banks, as he has with universities and big law firms. The Trump administration is considering an executive order on “debanking,” according to people familiar with the matter.
   
• So-called “debanking”: Leaders in a growing number of conservative states have accused banks of boycotting industries for political reasons, rather than based on traditional factors such as the ability to repay debts. States including Texas and Oklahoma have blacklisted some banks from state contracts as a result. Banks say they weigh risks when deciding who to do business with and limit ties with companies for financial, legal and reputational reasons.

Anthropic lands partial victory in AI case set to shape future rulings.

A federal judge found that the startup Anthropic’s use of books to train its artificial-intelligence models was legal in some circumstances, a ruling that could have broad implications for AI and intellectual property.

Judge William Alsup of the Northern District of California ruled Monday that Anthropic’s use of copyrighted books for AI model training was legal under U.S. copyright law if it had purchased those books. The ruling is set to help shape future litigation against AI companies, legal experts said.

U.S. Treasury sanctions fugitive Tren de Aragua boss.

The U.S. Treasury Department has sanctioned an alleged fugitive leader of Tren de Aragua, a Venezuelan gang the U.S. considers a terrorist organization.

Giovanni Vicente Mosquera Serrano is allegedly involved in Tren de Aragua’s drug trafficking and financial operations, the Treasury said Tuesday.

• A coalition of attorneys general from 21 states is suing the Trump administration for slashing billions of dollars in federal funding and justifying the cuts by citing shifting agency priorities.
   
• The Spanish government said it would clear Banco Bilbao Vizcaya Argentaria’s hostile bid for smaller peer Banco de Sabadell on the condition that the banks don’t legally merge for up to five years.
   
• Federal investigators said Boeing’s failure to provide adequate training, guidance and oversight for its manufacturing operations was to blame for the door plug that flew off a Boeing 737 MAX plane last year.

Trump’s Iran attack spurs concerns of retaliation in the U.S.

Federal law-enforcement officials are on high alert for domestic retaliation in response to the U.S. bombing in Iran, warning of potential Tehran-backed plots and cyberattacks.

Federal Bureau of Investigation officials in cities including New York, Los Angeles, San Francisco, Chicago and Philadelphia were told Monday that they should shift resources toward Iran and domestic threats, after manpower in recent months had been focused on the Trump administration’s priority of immigration enforcement, people familiar with the matter said.

Meanwhile, the U.S. bombing of Iran and direct involvement in Israel’s conflict has added a fresh dose of uncertainty to a U.S. economic picture that was already looking pretty muddled.

“If you were to ask me, give me a description of the United States economy, it’s ‘pervasive uncertainty,’” said Joe Brusuelas, chief economist at RSM, an audit, tax and consulting firm. “There is too much risk on the table right now. We just don’t know in which direction we are truly headed.”

• U.S. Strikes Set Back Iran Nuclear Program by a Few Months, Initial Report Says
• How Trump Cajoled Iran and Israel Into a Cease-Fire and Forced Them to Comply
• U.S. Strikes Set Back Iran Nuclear Program by a Few Months, Initial Report Says

• Federal Reserve Chair Jerome Powell told lawmakers on Tuesday that recent economic data would have likely justified continuing to lower interest rates if not for concerns that higher tariffs might derail the central bank’s yearslong fight to defeat inflation.
   
• U.S. consumer confidence slipped in June, reversing an improvement in May, according to the Conference Board, a research organization that does a monthly survey.
   
• Business confidence in Germany improved this month as firms shrugged off much of the impact of tariffs on Europe’s economy.

• President Trump dared political foes to try to remove him from office again, taking aim at comments by Rep. Alexandria Ocasio-Cortez (D., N.Y.) that his strikes on Iran rose to an impeachable offense, as Democrats grappled with how to respond to the weekend attack.
   
• President Trump is urging Republicans to get their “one big, beautiful bill” to his desk by July 4. That’s just a week from Friday, and lawmakers still face a series of hurdles and headaches on issues ranging from artificial intelligence to deficit spending to rural hospitals.
   
• Zohran Mamdani was poised to deliver a stunning upset in New York City’s mayoral primary that pitted youthful enthusiasm against Andrew Cuomo’s billionaire backers, union endorsements and old-guard Democratic support.

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