WSJ What’s News - Saudi-Backed Forces Launch Major Counteroffensive

Episode Date: October 6, 2026

A.M. Edition for Oct. 6. With France on the precipice of a dangerous financial spiral, student protestors are demanding President Emmanuel Macron raise spending, the one thing WSJ Paris bureau chief Stacy Meichtry says the country can’t afford to do. Plus, Saudi and Yemeni forces launch an operation to take back a strategic port Iran-backed Houthi rebels have been using to disrupt oil-tanker traffic through the Bab al-Mandeb Strait. And the Treasury Department enables auto-enrollment and stock donations for Trump Accounts, turning the program into a universal child investment vehicle. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Saudi Arabia takes on Yemen's Houthis in a counteroffensive aimed at protecting the kingdom's energy exports. We'll look at the challenging fight to come. This is land that really is in favor of guerrilla fighting that the Houthis employ in their command of the areas that they control. And that makes it more difficult for airstrikes alone to be able to do the job. Plus, Germany and France dial up their campaign to stem the flood of chiefs. cheap Chinese goods. And if you had opted out of a Trump account for your child, you might want to check again after the administration auto enrolls more than 60 million kids. It's Tuesday, October 6th. I'm Luke Farke. It's 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. Saudi Arabia is dialing up its fight against the Houthis in a bid to dislodge the fighters from a strategic port and ease pressure on energy exports. With me to discuss this long-awaited offensive is the journal's Deputy Middle East Bureau Chief John Gambrel. John, we are reporting that the Saudis are using 100 jet fighters here to provide air cover to Yemeni ground troops in this counteroffensive. This sounds like a major push to see that much hardware being brought to the fight.

What does that tell us about the stakes of this mission for Saudi Arabia? For Saudi Arabia, this has become increasingly dire over. recent weeks as Yemen's Houthi rebels who have held Yemen's capital back since 2014 have really moved down south along the coastline of the Red Sea. They've taken a crucial island there known as Param Island, and they're also threatening a city called Taez. And more importantly, likely for the world economy, is the Houthis were able to put more pressure on the Red Sea. And the Babel Mandab is basically the Red Sea's version of the Strait of Hormuz. Without the Babel Mandab being open, ships that go through the Suez

Canal cannot then pass onto the Gulf of Aden and then onto Asia, and ships then going north to try to get to Europe can't reach there if the Houthis are able to shut that off. Now, traffic has been going through. It's still been really reduced there since the Houthi attacks during the Israel-Hmas war. But that being said, the Houthis have launched attacks on Saudi ships there, especially those carrying crude oil. They have also targeted Saudi oil infrastructure that came also when we saw this drone attack that was launched from Iraq that targeted the East-West pipeline. which has been crucial for the kingdom and getting oil out since the Strait of Hormuz has been basically contested water since the Iran War. So if the Houthis are able to put more pressure

on Babel Mandib, that really could have a knock-on effect on the seasawing global energy market. John, the Saudis bringing a lot of firepower to bear here, also calling in various groups in Yemen, to try to dislodge the Houthis. But we should note, without getting too deep into the story of the Yemeni civil war, the Saudis have trained a lot of firepower at the Houthis before, and yet we're still in this situation. The Houthis have been dug in in Sana'a in the capital of Yemen since 2014, and effort after effort to try to get them out of the capital so far hasn't met with stiff resistance. The Houthis control basically the northern part, the northwestern part of the country, and any sort of push further up towards Sana'a is likely to be heavily contested.

They are a major power and efforts to try to reach some sort of power-sharing structure in Yemen so far hasn't reached any success. But analysts say that that's going to be really be the only way forward to end this war that just continues to choke at the Arab world's poorest country. I mean, not to oversimplify it, but it's sort of surprising, right, how resilient they've been. I mean, we often, in our stories about the Houthis show men in the back of pickup trucks with light weaponry here going up against a hundred jets, and yet they've been able to hold on. Yemen is big desert. It's high mountain peaks. It's really tough terrain. This is land that really is in favor of guerrilla fighting that the Houthis employ in their command of the areas that they

control. And that makes it more difficult for sort of air strikes alone to be able to do the job in dislodging the Houthis. That's why they've been able to hold on for so long. And as long as the forces that are allied against them in Yemen remain scattered and not really unified, it's going to be really challenging to try to push on the ground to loosen their grip on the country. I've been speaking to the journal's Deputy Middle East Spirit Chief John Gambril. John, super helpful there. Thanks so much for being with us. My pleasure. Students in France are staging another major day of protests after organizers called for a nationwide day of action.

Hundreds have been injured and around 400 schools have had to shut since protests first erupted in mid-September. According to France's interior minister, officers made more than 5,000 arrests last week, 85% of them minors. teachers, students, and now parents are mobilizing against a lack of staff in high schools, perceived inequalities in the school system, as well as the state of school buildings nationwide. The journal's Paris Bureau chief, Stacey Mitri, says the protests are mounting pressure on President Emmanuel Macron's government, which last week earmarked roughly $74 billion for schools more than it's setting aside for defense. What protesters are demanding students and teachers, as well as political parties that have served of join the protests is an expansion in government spending, particularly on the education system.

Now, protesters argue that the schools have, you know, become dilapidated over the years, that, you know, there's too many students in each classroom, that teachers aren't properly compensated. So they're demanding that the French government do the one thing that it absolutely cannot do, which is to increase spending. And Stacey says that France's already ballooning budget hasn't been well received by markets. France is, you know, on the verge of a sovereign debt crisis. We've seen the spread on French bonds, you know, really blow out in comparison to those of Germany over the past couple weeks. What's going on there? Investors are worried that the French government doesn't have the political will to really rein in public spending and restore some fiscal discipline. France has been running significant deficits for years now above 5%. And Parliament, in particular, particular, which is badly fractured, just isn't willing to accept the idea that, you know, France needs to restrain its spending. In fact, the past two prime ministers that have tried to introduce

cuts have been promptly ousted from office. And France and Germany are proposing a new weapon for Europe to fight back against a flood of cheap Chinese goods. The countries are suggesting that the EU lower its bar for blocking Chinese products and allow the block to do so within days. Our reporter in Brussels, Kim McCrail, says the move comes just ahead of a meeting between EU and Chinese trade officials. This comes from a place of several years' worth of concern from European businesses and leaders about the flow of low-cost products from China to Europe. So they're essentially proposing two different ways of trying to deal with this issue.

one, a really credible response to acts of coercion. So the ability for the EU to easily and quickly put up tariffs in response or other sorts of trade restrictions to retaliate or respond to something concerning that they see from another country. And the second is they propose and they talk about this idea of a diversification instrument. But we know from talking to officials there's a lot of concern about European companies becoming or already being very dependent on, China for particular products. Rarers and permanent magnets are a really great example of that, and it's already been a problem where China has curtailed exports of those. So the diversification instrument idea is to try to find a way to push European companies to find alternatives and to expand their supply chains beyond being too reliant on one country. Kim added that the new proposal would give the EU a tariff toolkit akin to the U.S. and enable it to impose tariffs on any trading partner, including major economies like China and the U.S. Coming up, Finance Editor Alex Frankos will join us to break down a pair of major changes to Trump accounts for kids,

which may matter to you even if you didn't sign up. That and more after the break. U.S. stock futures are rising this morning, putting a record for the S&P 500 in play today. The index ended Monday, just shy. of its all-time closing high. The NASDAQ set its own new record yesterday, and futures are pointing to fresh gains for the tech-heavy index as well. Stocks are riding another wave of AI enthusiasm, and treasury yields are finally taking a breather after having risen in tandem with stocks in recent weeks. Meanwhile, Brent Crude is trading around $100 a barrel, and those

surging energy costs are starting to pinch major economies. New data shows that German factory orders plummeted more than 10% in August, far worse than expected. That sharp drop was driven largely by an around 60% plunge in big-ticket orders for items like aircraft, ships, and military vehicles as elevated production costs weighed on industrial output. Meanwhile, Australian consumer confidence tanked over the past month as households responded to the twin shocks of rising interest rates and ongoing cost-of-living strains. That extremely weak sentiment is the worst reading since the disastrous recession hit Australia in the early 1990s. Disney is set to face off against the Federal Communications Commission in a D.C. court today. It's the latest turn in a major First Amendment clash after Disney's

ABC sued the FCC, alleging that its efforts to challenge its broadcast licenses were illegal and amounted to an effort to quash speech that the Trump administration finds unacceptable. For its part, the FCC said the license review isn't about free speech, but rather They're probing whether Disney's DEI initiatives violated the agency's prohibition on unlawful discrimination. Legal experts say that an eventual ruling could help to determine how the government can wield its regulatory authority over broadcasters. And finally, blink, and you might have missed some major changes to Trump accounts. We're talking here about the universal child investment vehicles that can be converted into Roth IRAs when kids turn 18. until recently 7 million kids had been signed up with the government tossing in a free thousand bucks for children born between 2025 and 28.

But as finance editor Alex Frangos explains, the formerly opt-in program has undergone some major changes that make it substantially different than first envisioned, including creating accounts automatically. So the Trump administration basically did a massive auto enrollment last week, adding 60 million, under 18s getting these accounts, which doesn't give the opportunity for people to opt out or not be involved. So, you know, people are scrambling to figure out what it all means, what suddenly do under 18s have in these accounts and, you know, what can they do with them? The driver around this is the Trump administration wants to create these accounts so that young people's wealth is growing and they're part of the economy. But the enrollment procedure, you know, you had to be savvy. You had to know to go do it. Maybe you had to read the Wall Street Journal to know that these

things even existed. And so some of the donors were pushing the administration and say, you know, don't make that an obstacle, just auto enroll everybody. And the other big change is that charities controlled by wealthy people with the Treasury Department's approval will be able to put individual stocks into children's accounts and be able to target those donations by age, location, or both. So you have a SpaceX president who's donated a bunch of shares to certain kids in certain income areas. So there's this real targeted thing. The advantage for these rich folks is they get to donate these shares to a foundation and there's a tax right off there and then the foundation puts the shares into the accounts. The other thing is the rules stipulate that the account holders have to

hold the shares for at least five years. So if you're donating shares in your company, you know, well, I'm donating them. I'm getting this tax relief and I know no one's going to sell the shares for five years. So that's kind of a benefit for them as well. And they're also able to target, you know, and it's raised some ethical questions around, well, what if a company wants to build a data center in a particular town? And they say, well, you know, we're going to give all the kids in the town shares. And other questions, like, what if someone doesn't want to own shares of a company? Let's say you don't believe in Tesla or SpaceX or Oracle or whoever it is is donating money. You don't really have a choice. You have to be in there. And then there might be

some employees who aren't allowed to own individual shares. The Treasury Department is currently field in comments on whether it should allow people to opt out of Trump accounts. To read more about the recent changes to the program, check out the link we've left in our show notes. And that's it for What's News for this Tuesday morning. Today's show was produced by Hattie Moyer and Daniel Bach. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.