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    Global Markets Dip as Traders Gauge Fallout From U.S. Strikes on Iran

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    Any disruption to traffic in the Strait of Hormuz would have significant economic effects, especially for Asian nations dependent on oil from the Middle East.Stocks edged lower and oil prices climbed in Monday trading in Asia, reflecting investor concern over potential economic fallout from the U.S. strikes on three Iranian nuclear facilities over the weekend.Futures contracts for the S&P 500, indicating how the index might perform when markets open in New York, slipped by about 0.3 percent. The price of West Texas Intermediate, the benchmark for U.S. crude, gained roughly 3 percent. Gold, a traditional safe-haven asset, also rose.Markets in Asia, the first to open after the strikes in Iran, were down. Stocks in Taipei, Taiwan, fell more than 1 percent. Benchmark indexes in Japan, Hong Kong and South Korea also dipped.Traders were waiting for clearer indications of whether there would be an escalation in conflicts in the Middle East — particularly any moves by Iran to disrupt shipping through the Strait of Hormuz.The Strait of Hormuz is a critical transit point for global oil supplies. Last year, about 20 million barrels of oil were shipped through the waterway each day, representing about 20 percent of the world’s total supply. Most of that oil was bound for Asia.Places like Japan and Taiwan rely on the Middle East for almost all of their crude oil imports, meaning that any disruption to traffic through the strait could inflict a large economic blow. China is the largest purchaser of Iranian oil.Oil prices, hovering around $76 a barrel, are expected to enter the $80 range, but if the risk of Iran blocking the Strait of Hormuz is seen as increasing, they will rise even further, said Takahide Kiuchi, executive economist at Nomura Research Institute. In that case, “the Japanese economy could be exposed to downside risks that exceed those of the Trump tariffs,” he said.Other analysts expect fallout from the U.S. strikes to be relatively short-lived.The oil market is better equipped to respond to shocks than it has been in the past because of spare capacity held by exporters, according to Daniel Hynes, a senior commodity strategist at ANZ Research. Geopolitical events involving producers can have a big impact on oil markets, but in recent years, prices have tended to quickly retreat as risks ease, Mr. Hynes said.Daniel Ives, an analyst at Wedbush Securities, said there could be more volatility in stock movements this week. But, he said, the market may view the Iran threat as “now gone.” In that case, he said, “the worst is now in the rearview mirror.”Joe Rennison More

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      The Markets Are Balancing on a Knife’s Edge

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      The world has been anything but peaceful, but you wouldn’t know that from looking at the markets.The calm in the markets has been unnerving.You might think the world has been enjoying a season so tranquil that the stock, bond and currency markets have fallen asleep.Yet the world has been anything but peaceful lately, whether in the United States, Ukraine or the Persian Gulf. And the Federal Reserve gave the markets another reason for concern on Wednesday when it held interest rates steady. Jerome H. Powell, the Fed chair, said that the economy faced the risks of both higher inflation and stagnating economic growth, but that the central bank needed more evidence before it could decide where the greatest dangers lay.“Right now, it’s a forecast in a foggy time,” he said. Even more than usual, the path ahead isn’t clear. Still, there was barely any reaction in market prices. Nor has anything else seriously disrupted major markets.That’s noteworthy, when you consider the crises that are looming: the highest tariffs in decades; a contentious crackdown on immigration and a swelling budget deficit in the United States; and, in the Middle East, an escalating war between Israel and Iran that could sharply reduce global oil supplies.This isn’t to say all markets have been entirely placid. The price of oil has oscillated since Israel launched a barrage of air attacks on Iran last Friday, setting off a new, heightened stage of conflict between the two longtime adversaries. President Trump has warned Iran’s supreme leader, Ayatollah Ali Khamenei, that the United States might intervene directly, saying, “Our patience is wearing thin.” The start of a much bigger war, with the United States joining the Israeli effort to eliminate Iran as a potential nuclear threat, would undoubtedly wake the markets from their apparent slumber.High StakesThe economic risks in the Persian Gulf are enormous. If Iran were desperate enough, in addition to targeting U.S. forces in the region it could throttle the oil supplies that pass through the Strait of Hormuz. Shipping through the strait encompasses one quarter of “total global seaborne oil trade,” according to the U.S. Energy Information Administration, and protecting that oil route has been a preoccupation of U.S. military planners since the days of the shah of Iran, who was deposed in 1979.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Business Lobbyists Scramble to Kill $100 Billion ‘Revenge Tax’

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      Critics contend that the measure will scare off the foreign investment that President Trump wants to attract.Business lobbyists are working to kill a measure in the Republican tax policy legislation that would punish companies based in countries that try to collect new taxes from American firms.The push comes as Senate Republicans are preparing to unveil their domestic policy bill on Monday, which will ultimately need to be passed and merged with the legislation that the House passed last month. That bill imposes a so-called revenge tax on foreign companies that try to enforce the terms of a 2021 global minimum tax agreement or impose digital services taxes on American technology companies.The legislation would substantially increase the tax bills for many foreign companies that operate in the United States, raising more than $100 billion over a decade. Critics argue that the provision would chill foreign investment at a time when the Trump administration is trying to attract international money.“I think the president has been pretty unequivocal on where he stands on wanting more investment into the U.S. from international companies,” said Jonathan Samford, chief executive of the Global Business Alliance, which lobbies on behalf of international businesses in the U.S.Mr. Samford added that the measure “directly contradicts the president’s investment vision.”The legislation is poised to reignite international tax and trade wars that have been on hiatus as policymakers around the world grapple with how to overhaul the global tax system. It has also stoked anxiety among Wall Street investors and is expected to be a topic of discussion as leaders of the Group of 7 countries gather in Canada this week for a summit.Since taking office, President Trump has made clear that he wants nothing to do with a 2021 deal brokered by the Biden administration that aimed to rewrite the rules of how the world’s largest companies would be taxed around the globe. That deal, which was agreed to by the G7, created a new global minimum tax rate of at least 15 percent that companies would have to pay, regardless of their headquarter location. The aim was to prevent countries from lowering their tax rates as a way to attract multinational corporations, creating a “race to the bottom” in taxation that left nations with fiscal shortfalls.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Oil Prices Surge and Stock Markets Stumble After Israel Strikes Iran

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      The military strikes jolted investors, raising concerns that a broader Mideast conflict would disrupt the world’s energy supplies.Israel’s military strikes against Iran shook global markets, as oil prices surged and stocks tumbled on worries that the attacks could set off a broader Mideast conflict that would disrupt the world’s energy supplies.Prices of Brent crude oil, the international benchmark, jumped nearly 9 percent to almost $78 a barrel in the hour following the Israeli strikes. As investors worried that rising oil prices might lead to more inflation and hurt the economies of oil-importing nations, stock markets fell broadly.The Nikkei 225 Index in Japan fell 1.3 percent in early trading Friday, while the Hang Seng Index dipped 0.7 percent in Hong Kong. Wall Street was closed at the time of the attack, but overnight futures market trading indicated that they could also fall as much as the Tokyo market.Iran is among the world’s largest producers of oil, and it sells almost all of what it produces to China, which consumes 15 percent of the global supply. Sales by Iran’s state oil company to China represent about 6 percent of Iran’s entire economy, and are equal to about half of its entire government’s spending.Iran’s exports have lagged in recent years as international sanctions have limited its ability to modernize its oil extraction and transportation technology.But Iran’s shipments have begun to recover in the past year on strong demand from China, which would be forced buy oil elsewhere if a broader conflict were to interrupt Iranian supplies. Beijing does have a large strategic oil reserve, accumulated through more than a decade of purchases and dispersed among numerous sites across the country. That could allow it to withstand weeks of an interruption in imports without difficulty.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Tesla Protesters Claim a Victory as Elon Musk Leaves Trump’s Side

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      The activists behind the Tesla Takedown campaign say they intend to expand beyond protests at the company’s showrooms.Elon Musk left the Trump administration with a White House send-off on Friday. That was a victory of sorts for a group of activists who have spent much of the last four months organizing protests against Mr. Musk’s right-wing politics by targeting his electric car company, Tesla.A day later, on Saturday, hundreds of people showed up at more than 50 Tesla showrooms and other company locations to continue their protests.The campaign at Tesla sites began in February after Joan Donovan, a sociology professor at Boston University, gathered friends to hold a demonstration at a Tesla showroom in Boston, and posted a notice about her plan on Bluesky using the hashtag #TeslaTakedown. She said she had been inspired by a small protest at Tesla’s electric vehicle chargers in Maine soon after President Trump’s inauguration.“That first one on Feb. 15 was me and like 50 people,” Ms. Donovan said. “And then the next week it was a hundred more people, and then a hundred more after that, and it’s just grown.”Tesla Takedown has since expanded into an international movement, staging demonstrations at Tesla factories, showrooms and other locations in countries including Australia, Britain, France and Germany as well as across the United States. The campaign’s U.S. growth has been fueled in large part by anger over Mr. Musk’s leadership of the Department of Government Efficiency, which has slashed government spending and dismissed tens of thousands of federal workers while gaining access to sensitive personal data.Mr. Musk departed the administration after his involvement in politics hurt his companies, especially Tesla. Sales of the company’s cars have tumbled since Mr. Trump took office and the start of protests against the company.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Markets Drop on Trump’s Latest Tariff Threats

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      President Trump said he would impose steep tariffs on goods from the European Union and targeted Apple with a tax on foreign-made iPhones.Stock markets dropped on Friday after President Trump threatened the European Union and Apple with steep tariffs.The S&P 500 fell about 1 percent in early trading in New York. The pan-European Stoxx 600 index lost a similar amount, with shares of carmakers, banks and tech companies among the hardest hit.Apple’s stock fell nearly 3 percent, a move erasing tens of billions of dollars in market value from the tech giant.On Friday morning, President Trump wrote on social media that trade negotiations with the European Union were “going nowhere” and called for a 50 percent tariff on all goods imported from the bloc starting June 1.“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with,” Mr. Trump wrote on Truth Social.In a separate post, he said that he wanted iPhones sold in the United States to also be made in the country. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S.,” he said.The S&P 500, the benchmark stock index in the United States, was already on track for its worst week since the beginning of April, when Mr. Trump announced so-called reciprocal tariffs on dozens of countries. After he paused those tariffs for 90 days to give time for negotiations, the market turmoil eased somewhat, but traders have remained jittery.This week, the Trump administration’s bill to cut taxes raised concerns about U.S. debt levels, keeping markets on edge.U.S. government bond yields, which had been rising in recent weeks on worries over debt and deficits, reversed course, a sign that fears about the economic effects of an escalating trade war were driving trading on Friday. The yield on 10-year Treasury notes fell to 4.52 percent.Treasury Secretary Bessent said on Fox News Friday morning that the president was frustrated with trade talks with the European Union and that he hoped the new threat would “light a fire under the E.U.”Several analysts said they didn’t expect the 50 percent tariffs to be put in place for long, if at all, because they would also harm the U.S. economy. Instead, they argued that these threats would lead to an agreement, after a similar pattern of U.S. talks with other countries, such as China.“Experience in recent months suggests that an agreement will ultimately be reached,” economists at Commerzbank wrote, adding that they expected the existing 10 percent “base line” tariff to remain on most products.The United States imported goods worth more than $600 billion from the European Union last year.“This latest pronouncement is likely just another step in the volatile trade negotiations,” Salomon Fiedler, an economist at Berenberg, said of Mr. Trump’s tariff comments. “Given the damage the U.S. would do to itself with this tariff, he will probably not follow through.” More

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      Novo Nordisk to Replace C.E.O. After Losing Edge in Weight-Loss Drugs

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      The Danish drugmaker, which makes Ozempic and Wegovy, has seen its stock tumble as competition in the weight-loss drug market has grown fiercer.Novo Nordisk will replace its chief executive, Lars Fruergaard Jorgensen, the company announced Friday, citing a sharp decline in its stock price that stemmed from increased competition for its popular weight-loss drug.The Danish drugmaker said it was searching for a new chief executive to soon replace Mr. Jorgensen, who has led Novo Nordisk for eight years.The move reflects a remarkable fall in fortune for the maker of one of the most well-known drugs in the world, which is sold as Ozempic for diabetes and Wegovy for obesity. The company’s stock has fallen by 50 percent in the past year.

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      Novo Nordisk’s share price
      Source: FactSetBy The New York TimesSales of that drug created boom times for Novo Nordisk. In 2023, the company’s extraordinary success prompted the Danish central bank to keep interest rates lower than it otherwise would. For more than a year, Novo Nordisk’s market value surpassed Denmark’s entire gross domestic product.But investors have soured on the company as it has faced increasingly fierce competition. Lower-cost copycat versions of the weight-loss drugs made through a process known as compounding have cut into Novo Nordisk’s sales. Even more damaging has been competition from Eli Lilly, the maker of the drug sold as Mounjaro and Zepbound.Novo Nordisk had a head start, winning approval to market its drug for obesity more than two years before Eli Lilly. But Novo Nordisk has been rapidly losing market share to its competitor: American patients have filled more prescriptions this year for Zepbound than for Wegovy, and the gap has been widening, according to the industry data provider IQVIA.Eli Lilly is also developing new weight-loss drugs, including a daily pill, that are expected to set up years of blockbuster sales for the company. Novo Nordisk has a hazier path forward. More

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      Asia Stocks Rise on Hope for Lower Tariffs After U.S.-China Talks

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      Investors were optimistic after American officials touted progress in trade negotiations over the weekend, though details had yet to be released.Stocks in Asia gained on Monday after weekend talks signaled that progress had been made in easing trade tensions between the United States and China.Benchmark indexes in Japan and South Korea edged higher in early trading on Monday morning. Stocks in Hong Kong and Shenzhen in China climbed about 1 percent, while futures pointed to similar gains for the S&P 500 when trading begins in New York.Meetings in Geneva between U.S. and Chinese officials concluded on Sunday with Scott Bessent, the U.S. Treasury secretary, saying that “substantial progress” had been made. China’s vice premier, He Lifeng, called the talks “candid, in-depth and constructive.” Details are expected to be released on Monday, both sides said.The meetings were the first between Washington and Beijing since President Trump ratcheted up tariffs on Chinese imports to 145 percent and China retaliated with its own taxes of 125 percent on U.S. goods. The tariffs are so high as to effectively block much of the trade between the two countries.The escalating trade war has left financial markets uneasy, and the meeting raised investors’ hopes that tariffs could eventually be lowered.Analysts at the financial services firm Wedbush Securities said the talks were a “positive step in the right direction.” They anticipated that an initial agreement, once unveiled during the U.S. day on Monday, would “at a minimum” involve a “much lower level” for tariffs.Economists have warned that the tit-for-tat trade barriers have significantly increased the possibility of an economic downturn. That includes in Asia, where some of the biggest economies, including Japan and South Korea, are heavily reliant on both China and the United States as trade partners.The World Trade Organization has forecast that the continuing division of the global economy into “rival blocs” could cut global gross domestic product by nearly 7 percent over the long run. Earlier this month, Japanese officials slashed their growth forecast for this year by more than half.Last week, China reported that its exports to the United States in April dropped 21 percent from a year earlier. Recession warnings are beginning to emerge in the United States.Heading into the weekend, investors had relatively low expectations for a breakthrough at the talks that would result in a meaningful reduction in tariffs. Many analysts expected the discussions to revolve around determining what each side wanted and how negotiations could move forward.Recently, Mr. Trump has opened the door to lower tariffs. Last week, he suggested that tariffs could come down to 80 percent. Commerce Secretary Howard Lutnick told Fox News that so-called reciprocal tariffs on trade with China may settle near 34 percent. More

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      Bessent Pitches Skittish Investors to Bet on Trump’s Economic Plan

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      The Treasury secretary urged executives and entrepreneurs to look beyond the Trump administration’s trade agenda.Treasury Secretary Scott Bessent urged skittish global business leaders on Monday to ignore President Trump’s economic naysayers and ramp up investment in the United States, defending an economic agenda that economists warn will slow economic growth and exacerbate inflation.Speaking to executives, entrepreneurs and policymakers, Mr. Bessent argued that the Trump administration’s economic plans go beyond trade policy and will pay off in the long run. He urged them to also focus on Mr. Trump’s plans to cut taxes and regulation, which he said would spur job creation and output.“Tariffs are engineered to encourage companies like yours to invest directly in the United States,” Mr. Bessent said in remarks at the Milken Institute Global Conference in Los Angeles. “You’ll be glad you did — not only because we have the most productive work force in the world. But because we will soon have the most favorable tax and regulatory environment as well.”His comments came just hours after Mr. Trump ordered up new tariffs on foreign film producers, a decision that left many in Hollywood puzzled about how such a tax would work.The Treasury Secretary has been working to ease concerns among investors that Mr. Trump’s trade plans will destabilize the global economy. Mr. Trump last month levied tariffs on countries around the world and escalated a trade fight with China, which sent financial markets plunging.Since then, Mr. Bessent has been racing to negotiate trade deals with dozens of countries. He has also signaled that the China tariffs are not sustainable, offering hope that Mr. Trump would soon begin negotiations to lower them.”Our goal with trade policy is to level the playing field for our great American workers and companies,” Mr. Bessent said.The Trump administration is working closely with congressional Republicans ]on tax legislation that would extend the 2017 tax cuts and offer new tax breaks for overtime pay, tips and Social Security benefits. Mr. Bessent made the case on Monday that investors need to consider the broader agenda when thinking about where to park their money.Describing Mr. Trump’s policies as “mutually reinforcing,” Mr. Bessent said, “acting in concert, they push toward the same goal — to solidify our position as the home of global capital.”Investors have grown increasingly wary of Mr. Trump’s policies in recent months, with stocks, bonds and the dollar all showing signs of weakness as fund managers fret over the uncertainty surrounding Mr. Trump’s policymaking approach.The International Monetary Fund projected last month that global output will slow to 2.8 percent this year from 3.3 percent in 2024 and sharply downgraded its outlook for the U.S. economy.On Monday, Mr. Bessent said that Mr. Trump would prove “critics in establishment circles” wrong.“We have the world’s reserve currency, the deepest and most liquid markets, and the strongest property rights,” Mr. Bessent said. “For these reasons, the United States is the premier destination for international capital.” More