WSJ What’s News - NATO Allies Announce Billions in New Spending to Placate Trump

Episode Date: July 7, 2026

A.M. Edition for July 7. As President Trump heads to Turkey for a NATO summit, Brussels Bureau Chief Daniel Michaels says the alliance is rushing to find replacements for the bombers, warships and soldiers that Washington says member nations can no longer rely on in a crisis. Plus, Democratic Party leaders urge Graham Platner to quit the Maine Senate race, a key path to winning a Senate majority in November. And as SpaceX joins the Nasdaq-100, WSJ markets reporter Hannah Erin Lang says investors in index trackers are exposed to Elon Musk’s rocket company whether they like it or not. Daniel Bach hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Top Democrats push for Graham Platner to exit Maine Senate race following sexual assault allegations. Plus what SpaceX joining the NASDAQ 100 means for your ETFs. And NATO announces military deals worth billions of dollars, hoping to placate U.S. demands for allies to step up. Global Air is a transatlantic program delivered by European and Canadian industries, with essential contributions from U.S. industries. It is a real success story. Again, made in NATO. It's Tuesday, July 7th. I'm Daniel Bach for the Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today.

Maine's Graham Platner is widely expected to pull his candidacy for Senate today with top Democrats withdrawing their endorsements overnight. That's after a woman Plattner had been romantically involved with publicly alleged that he sexually assaulted her. He denied the allegation in a video yesterday, saying he would reassess his Senate bid. But now, state and national lawmakers are calling for Platterner to drop out of the race. Here's Maine's House Speaker Ryan Fecto, courtesy of Maine's total coverage. The concerns have been mounting, and I think that's the primary issue here, is the number of revelations about Graham's past have accumulated. and that is what I think is causing the greatest deal of concern for all of us.

The development is set to damage Democrats' hopes in one of the party's most important Senate races this year. Almost any path for Democrats to gain the four seats needed for a Senate majority includes winning in Maine. July 13th is the cutoff for any changes to November's ballot. If Platner withdraws by then, the Democratic Party will have until July 27th to find a new nominee. All eyes are on the NASDAQ 100 today with SpaceX set to join. That follows a decision by the index to fast-track newly public mega-cap companies under new inclusion rules. Elon Musk's rocket company has been on a wild ride since its IPO last month, racking up a $2.1 trillion market cap with more potential big moves ahead.

Journal Markets reporter Caitlin McCabe says that's key for index tracking funds, which have been gearing up for a SpaceX buying spree. So all of the exchange traded funds and mutual funds that track the NASDAQ 100 had to buy SpaceX shares after markets closed yesterday. And that's because these funds are supposed to resemble the NASDAQ 100 and track its performance. So they need to be ready for today with SpaceX in their portfolios. So that will likely add some buying pressure to the stock and benefit it in the short term. But you can't really extrapolate what that will mean for the stock long term. especially as employee lockup periods end over the next year, and they'll be looking to sell their shares.

And Caitlin says because SpaceX sold less than 5% of its total shares in last month's public offering, people invested in market tracking funds will be less exposed to the company than they might think. Despite the fact that SpaceX has a more than $2 trillion valuation, it won't enter the NASDAQ 100, which is a cap-weighted index as one of the top components. It'll be treated more like a $300 billion company, and it'll have an index weight of less than 1%. So if you're an investor and you're worried about SpaceX or not interested in the stock, you're not going to have some sort of outsized exposure to it if you own a fund that tracks the NASDAQ 100. On the other hand, if you want more SpaceX, you might have to consider other ways of getting it, like buying the stock outright. And you can find an explainer on what SpaceX means for the NASDAQ 100 in our show notes. Well, futures for the tech-heavy NASDAQ are down this morning along with shares in Asia,

as the chip-led AI rally takes a little breather. Shares and Samsung are down about 8% despite the company reporting a 19-fold jump in profit for the second quarter. Shares and fellow South Korean chip company S.K. Heinex are also down around 7%, dragging on the country's main index. Analyst did note that this latest correction in Korean stock should be viewed in the context of its recent historic rally, where some investors appear to be cashing in on the Cospi's roughly 100% surge in the first half of the year. U.S. listed shares of S.K. Heinex will start trading on the NASDAQ 100 on Friday. And speaking of market roller coasters this year, the index tracking small companies, the Russell 2000, climbed more than 20% in the first six months of the year.

Markets reporter Hannah Aaron Lang says that's the best first half performance since 1991, and it's also because of AI. Small cap indexes have benefited from this frenetic chip stock rally that we've seen kind of across the market. So semiconductor stocks, AI, hardware and infrastructure plays, that's juicing the gains that we're seeing in the Russell 2000 and, you know, the SMP Small Cap 600, for example. But there are some factors that are in favor of, you know, small caps specifically right now. So one is that we're in this kind of economic sweet spot. inflationary pressures have eased following the U.S.-Iran peace deal. And we have a labor market that is cooling but not screeching to a halt.

We have some hope for maybe holding or cutting interest rates, whereas a lot of investors had started to believe that we were really only going to see an interest rate hike this year, if anything. Another thing I should note, too, is that there's a bit of AI fatigue on Wall Street right now. This chip stock rally brand so hot and was so extreme. that I think there's a sense of folks kind of looking for other opportunities. At the beginning of the year, I talked a lot with investors about kind of market gains broadening beyond the AI race to things like small caps or to industrials, for example.

And that scenario, which a lot of folks had been hoping for six months ago, got a bit derailed by the war breaking out with Iran and everything that came after. But now investors are looking beyond the AI investing frenzy and wondering where that next opportunity that next outperformance in the market is going to come from. There's some good news for American consumers and workers in the form of two company announcements that came out late yesterday. Walmart is cutting prices on thousands of items to help customers with affordability after years of inflation. The largest U.S. grocer is lowering the price of everything from ground beef to Coca-Cola to toys. The effort drew praise from President Trump

who urged other retailers to follow suit. And Japanese automaker Toyota is spending $3.6 billion to bring production of its top-selling mid-size pickup the Tacoma back to the U.S. by 2030. The company plans to build a second assembly line at its San Antonio plant, adding 2,000 jobs. Making more vehicles in the U.S. will help Toyota mitigate a hefty tariff bill in its largest market. Coming up, we get the latest from the NATO summit in Turkey, plus what cringy collectibles do you bring home from your travels? Those stories and more after the break. Hey y'all, it's Kelly Clarkson with Wayfair. Ever order furniture online and wonder what if? Like, what if it doesn't hold up? That sofa was four days old. You should have ordered from Wayfair. With Wayfair, there's no what if. Just style you love and quality you can trust. Visit Wayfair. Every style, every home.

NATO has announced a series of new military projects worth billions of dollars ahead of President Trump's arrival at the summit in Ankara. Journal editor Daniel Michaels is there, and he told us the showcase is an attempt to convince Trump that allies are stepping up defense spending. NATO is trying to signal with these announcements that it is following up on last year's summit in the Hague in the Netherlands when NATO members committed to spending 5% of their economic output on defense and security for NATO. Now they're showing that they're actually spending it, doing deals, getting money out the door, and that that that, will start turning into weapons and other systems that can be used to defend NATO countries. Some of these deals are to produce systems and equipment that is really vital, like interceptors. We see in Ukraine now with these devastating Russian strikes, turning the contracts today into actual equipment will take months or potentially years in some cases.

but these are vital first steps for producing equipment that some of which could go to help Ukraine or to prepare Europe, other parts of NATO for potential conflicts. President Trump arrives in the Turkish capital later today where he's due to attend a dinner with other NATO leaders and Ukrainian President Volodymyr Zelensky. Iran's Revolutionary Guard fired missiles at two commercial ships near the Strait of Hormuz today, threatening to disrupt recovering traffic and complicate ongoing. following U.S.-Iran peace talks. The escalation follows threats from the group warning vessels away from a transit route cleared by the U.S. near Oman. The journal has reported that the

Revolutionary Guard and those close to it have stood as the biggest obstacle to an agreement. Under a memorandum of understanding, the U.S. and Iran agreed last month to a 60-day period of negotiations to reach a final agreement. Meanwhile, oil prices are drifting higher following today's attacks, with Brent crude futures climbing back towards $73 a barrel and above their pre-war levels. In Gaza, Hamas has announced it would dissolve its governing committee in order to pave the way for a UN-backed technocratic committee overseen by President Trump's Board of Peace. Speaking from Tel Aviv, journal reporter Annat Palad says that while the move is mostly symbolic, it aims to show willingness to stick by Trump's peace plan as much of the negotiations have stalled.

Hamas is in a tricky situation. So it's really been struck hard by Israel and it suffers from a lack of popularity, lack of funds and authority in Gaza. However, it still is resisting fully disarming. And that's a major sticking point. That's something that was not addressed in the statement it made yesterday. Israel responded by basically calling this a spin, a move that was meaningless. So questions remain about the disarmament of Hamas. That was something that was required by the, you know, the ceasefire agreement that was reached in October 2025. It's unclear where that's headed. The talks are pretty stuck right now. And that also means that the rebuilding is stuck in Gaza. The Board of Peace said it was aware of the announcement made by Hamas, but it would judge the situation based on, quote, actions, not promises. And finally, if you're getting ready to jet off or pack up the car for a summer holiday, are you thinking about any collectibles you might pick up along the way. If there is one thing journal readers have in common, no matter their travel budget, it's a love of tacky souvenirs. I first wrote about cheesy souvenirs back in May in the WSJ

travel newsletter. I confess that I collect those Starbucks mugs in my travels around the world. One of my favorites is from New York before I even had this job. It's a subway tile Starbucks Cup. That's journal travel columnist Don Gilbertson. After I wrote the newsletter item, I was absolutely floored by the reader response. I heard from hundreds of Wall Street Journal readers confessing their cheesy souvenirs, the things they collect in their travels, everything from Christmas ornaments to coasters, to key chains, just everything you can think of, even Charlie Chaplin T-shirts. And the trend goes across the newsroom, too.

Every time I go on holiday, I always try and find a Christmas ornament whenever I'm somewhere new. That's our supervising producer, Sandra Kilhoff. And as we travel, we started buying a coffee, everywhere that we would go. And Ryan Knutson, co-host of The Journal Podcast. If I could go back in time, I think I might choose something different, like maybe postcards or even magnets, like something smaller that can fit in a shoebox

and doesn't take up an entire cupboard in my house. So if you're also partial to a cheesy souvenir, Don says there is something deeply satisfying about bringing home a trinket or two to complement the hundreds of photos on your phone. So my hot take on cheesy souvenirs, ignore the haters, just buy what makes you happy, whether that's a fridge magnet, a shot glass, a golf course pencil. If it makes you happy, who cares what anybody else thinks? And as I'll be here in the newsroom and won't be hitting the beach this summer, I'd be grateful if anyone wants to send me a senior frogs t-shirt from Cancun. A postcard will work fine too, or just a note to tell us where you're listening from.

And that's it for what's news for this Tuesday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sondra Kilhoff. And I'm Daniel Bach for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.