WSJ What’s News - Inside Islamic State’s Attempted Resurgence

Episode Date: August 13, 2024

A.M. Edition for Aug. 13. WSJ correspondent Michael Phillips details how Islamic State is trying to take advantage of chaos in the Middle East to prepare to resurrect its dream of ruling an Islamic caliphate. Plus, the FBI admits it has been investigating suspected Iranian attempts to hack people linked to both the Trump and Biden-Harris campaigns. And Donald Trump marks his return to X in a freewheeling conversation with Elon Musk. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Summer's here, and you can now get almost anything you need delivered with Uber Eats. What do we mean by almost? You can't get a well-groomed lawn delivered, but you can get chicken parmesan delivered. Sunshine? No. Some wine? Yes. Get almost, almost anything delivered with Uber Eats. Order now. Alcohol in select markets. See after details. The FBI probes suspected Iranian hacking attempts against the Trump and Biden Harris campaigns, plus a potential

roadblock for RFK Jr.'s bid for ballot access. And a half decade after the destruction of its caliphate, Islamic State is back on the move. We're seeing them intensifying their attacks. They're trying to reestablish themselves in the area that they used to control. It's Tuesday, August 13th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.

The FBI says it has been investigating suspected Iranian attempts to hack people linked to both the Trump and Biden-Harris campaigns, admitting the investigation dates back to June. According to our reporting, at least three staffers on the Biden-Harris campaign were targeted with so-called spearfishing emails before Biden stepped aside, with a person familiar with the matter saying the hacking attempts were apparently unsuccessful. At the same time, the FBI said it's investigating what appears to be a successful cyberattack that stole internal documents from the Trump campaign, an incident that the campaign disclosed to reporters on Saturday while blaming Iran. Previously, the FBI only said it was aware of media reporting about the alleged hack.

The White House still hasn't made a formal determination of responsibility. Meanwhile, Donald Trump spent the waning hours of Monday holding a live discussion with Elon Musk hosted on X's live streaming service, Spaces. Hyped by Trump to his almost 90 million followers on X as the interview of the century, the event was initially delayed by technical problems, which Musk said without evidence were caused by a cyber attack, even as other parts of the platform seemed to continue working. National politics reporter Vivian Salama was listening for revelations about Trump's second term agenda, but said that details were few and far between, and that at

times Musk struggled to get a word in. What we heard from the former president was pretty similar to what we hear on the campaign trail. And oftentimes you had Elon Musk agreeing with him. That is something that Trump obviously responds to. He constantly is talking about how much he appreciates Musk's support and even at his rallies has occasionally commented about the fact that some of his policies, including his views on electric vehicle tax credits, may have to somewhat evolve because now Elon Musk is backing him. But we haven't really gotten any details on how he would revise his views. In one exchange, Musk appeared to raise the idea of a potential position on what he called

a government efficiency panel looking at how taxpayer money is spent, a prospect that Trump backed. The Journal previously reported in May that Trump and Musk had discussed a possible advisory role for the entrepreneur should Trump win a second term. A New York judge has dealt a blow to Robert F. Kennedy Jr.'s already struggling campaign by ruling that the long-shot presidential hopeful doesn't have a valid residence in the state. That ruling invalidates his nomination petitions in New York and could spur additional challenges around the country. According to Political Action Committee Clear Choice Action, which backed the challenge, Kennedy used the New York address in 17 other states to get on the ballot.

The legal challenge said Kennedy actually lives in California and that his listed New York address is a place he's only visited. Kennedy's campaign has vowed to appeal. After fears of a potential recession roiled markets last week, things got off to a comparatively calm start yesterday, with major indexes moving between gains and losses throughout the trading day and Wall Street closing on a mixed note. But after a once-in-a-generation route in Japanese stocks and half-trillion-dollar daily valuation swings for the largest tech companies, is it premature to suppose last

week's turbulence has been fully resolved? Here to help us take a pulse of markets is Journal Finance Editor Alex Frankos. Alex, what should we be watching for to determine which way things are headed? It's almost by definition the things that we don't expect. So we don't know what they're going to be. But you look on the calendar and you see this week that we have inflation numbers today and tomorrow out of the US, retail sales, which will give a pulse on the health of the American consumer.

So those will all help build out a picture of are we heading into a recession? Is the economy slowing or is everything fine? And the data that scared everybody was just no a blip watch for things We don't expect you say but I have to ask about Geopolitical tensions, especially amidst a potential Iranian retaliation against Israel. I guess we saw crude prices Last week lodging their first weekly gains since early July, and yet even those moves have been modest. Yeah, the oil market seems to have been not really rattled by the Iran-Israel tensions.

And what they're more concerned about than geopolitical tensions is a slowing economy, both in the US and in China, which is the world's biggest importer of oil. That was the Journal's Alex Frankos. And in other news moving markets today, speaking of oil demand, the International Energy Agency is forecasting a growth slowdown this year and next, driven by lackluster construction and manufacturing activity in China that's starting to weigh on oil use. Google is set to showcase its latest Pixel phones, as well as new versions of Android with artificial intelligence features at a live event today.

And the release of the Producer Price Index and fresh retail sales data, both of which Alex mentioned, are due at 8.30 a.m. Eastern. Coming up as Islamic State has been using upheaval in the Middle East to claw back territory that it once held, we'll look at how U.S.-led forces are trying to stop the terrorist group's resurgence. We've got that story after the break. Wherever you're going, you better believe American Express will be right there with you. Heading for adventure? We'll help you breeze through security.

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Visit amex.ca slash ymx. Benefits vary by card. Terms apply. American-led forces defeated the militant group Islamic State a half-decade ago. But as journal correspondent Michael Phillips reports, the battle against them is actually far from over as the terror group rebounds amid the chaos of the Middle East. Michael, it was 2019 when we reported that the Islamic State caliphate had fallen apart, but the group is very much alive. And you traveled to Syria recently where it is

trying to regain the caliphate that it lost. How is that playing out? Michael S. We've seen a couple different things. One is high profile terror attacks, the kind of things that get international attention. And among those, obviously, were the attack in March in Moscow at a concert venue that killed about 140 people. There was an attack in Iran that killed about 95 people in January. There was an attempt to attack a Taylor Swift concert in Vienna. That attack was disrupted, so it did not take place. On the other hand, they're also trying to regain those areas of Iraq and particularly

Syria that they had lost in 2019, that caliphate where they were able to rule with their very strict interpretation of Islam. It seems pretty concerning, Michael, that Islamic State is so active in Iraq and Syria while also looking at attacks and executing them well beyond that territory. So a wide geographical reach here, but just also numerically speaking, just a big spike in activity. Michael S. You're absolutely right. So Islamic State is constructed in a series of provinces. So they've got a province in Afghanistan, they've got a province in West Africa. They attack in all sorts of different places with a similar

goal of establishing Islamic rule. For example, this year in Syria and Iraq, we've seen a doubling of the pace of Islamic State attacks, about 153 in the first six months of the year in Iraq and Syria, and all of last year was about 121. So we're seeing them intensifying their attacks. They tend to be strikes at Syrian checkpoints or attacks on US bases. They're trying to reestablish themselves in the area that they used to control. They used to have a massive area, almost the size of Virginia that they controlled. They had something like 12 million people under their authority and they were acting like a government in that area until they were pushed out five

years ago. And finally, Michael, in terms of the road forward here, how difficult is it going to be for the US and its allies to go after this group now compared to, say, five years ago, given how splintered Islamic State is now. David Morgan Islamic State has certainly adapted to its new situation. They used to be a government with tanks and armored vehicles and pickup trucks with machine guns in the back. And they would carry on large scale battles with Iraqi forces or Syrian forces or Kurdish

forces. Now they don't have that anymore. They're not running a government anymore. But what they are doing now is sort of poking from the sides in the aspiration of recreating that entity when it's possible. And there's some really interesting things that are going on in Syria right now. There are about 9,000 Islamic State fighters who are in prisons around northeastern Syria. They're being held by US allies, the Syrian Democratic Forces.

And what Islamic State tries to do is attack those prisons and release those fighters. And it's something that both the US and its allies in the Middle East are very worried about. And then secondly, there are camps in Syria that have about 43,000 internally displaced people, of which many thousands are the wives and the children of the Islamic fighters who are in prison. And inside those camps,

there are cells also of Islamic State. There are teachers trying to indoctrinate the children to be the next generation of fighters. And it's the deep concern of the U.S. and of their local allies in Syria and Iraq that those youngsters will be up and fighting within a few years to the extent that if you go into those camps, you might find coloring books that the kids use that have suicide vests that they color in, that have AK- vests that they color in, that have AK-47s that they color in, that have hand grenades that they color in. So it is a long

struggle and we don't know where it's headed. I've been speaking to Wall Street Journal correspondent Michael Phillips. Michael, thank you so much for bringing us this story. Thanks for having me. And that's it for What's News for Tuesday morning. Today's show was produced by Hattie Moyer and Kate Boulevent. Our supervising producer was Daniel Bach. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show.

Until then, thanks for listening.