WSJ What’s News - U.S. Stocks Fall as Trump Renews Trade Tensions

Episode Date: July 7, 2025

P.M. Edition for July 7. President Trump extended the deadline on so-called reciprocal tariffs to Aug. 1 while announcing 25% tariffs on goods from Japan and South Korea. Several more nations received similar notifications. Plus, heavy rain continues in Texas, where the death toll from the flash floods has risen to 90. And President Trump is meeting Israeli Prime Minister Benjamin Netanyahu at the White House. WSJ national security correspondent Michael Gordon discusses how a changed Middle East could be ripe for Trump’s dealmaking diplomacy. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Texas braces for more flash floods as rescuers search for survivors. Plus, President Trump renews trade tensions while extending the reciprocal tariff deadline. And Trump and Netanyahu meet to discuss the recent shifts in the Middle East. The big prize that they're seeking is Israeli-Saudi normalization. And there are a number of preconditions for that. And the question is, are we going to get some little steps in isolation or building blocks in service of a larger vision for the region?

It's Monday, July 7. I'm Alex Osila for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. the top headlines and business stories that move the world today. We begin this evening with the latest on the flash floods in Texas, which have so far killed at least 90 people. Camp Mystic, a summer camp on the banks of the Guadalupe River

in the state's Hill Country, said today that it was grieving the loss of 27 girls and counselors. Its longtime director was also feared dead. Search and rescue operations have continued across the region today, with an unknown number of people still missing. But bad weather has impeded some of those efforts over the past few days, and today residents are bracing for even more heavy rains. Forecasters have extended flood warnings through this evening, and the National Weather Service said that some areas could expect as much as 10 inches of rain today. White House Press Secretary Caroline Levitt said President Trump will visit Texas later

this week, likely on Friday, to review the damage. At the White House briefing today, Levitt disputed suggestions that deep Trump administration cuts to federal services may have affected authorities' response to the flooding. Blaming President Trump for these floods is a depraved lie and it serves no purpose during this time of national mourning. Here are the facts. In the lead up to this tragic natural disaster, the National Weather Service did its job. Despite unprecedented rainfall, the National Weather Service executed timely and precise

forecasts and warnings. Levitt wouldn't say whether Trump will be rethinking phasing out the Federal Emergency Management Agency, or FEMA, after the deadly flooding in Texas. Also at today's White House briefing, Press Secretary Caroline Levitt said that President Trump plans to issue an executive order to extend the pause on his steep, so-called reciprocal tariffs to August 1. The pause had been set to expire Wednesday. Earlier on his Truth Social platform, the president had published letters to a number of countries, including Japan and South Korea, threatening them with the re-imposition of tariffs ranging anywhere from 25 to 40 percent. Levitt said about 12 more nations would receive similar notifications,

which would also be posted on Truth Social. U.S. stocks fell today after President Trump's tariff announcements reignited trade tensions. The S&P 500 was down about 0.8 percent, while the Dow and the Nasdaq both dropped about 0.9 percent. We're exclusively reporting that Saudi Arabia's government fund is taking a two-thirds stake in a site for a planned Manhattan skyscraper. According to people familiar with the matter, the overall cost for the site, which is one

block from Central Park, along with the building's development, is expected to be more than $1 billion. The Saudi Fund's final contribution is still being determined, but these people said that the kingdom's public investment fund has already invested about $200 million. WSJ reporter Peter Grant joins me now. Peter, what do we know about this building and what it could potentially be used for? The developer involved, the developer name related, the mega developer that redeveloped the Hudson Yard site on Manhattan's west side, but Related is a global developer. They have projects all over the world and they also have a close relationship with the Saudis. Related purchased this site a couple of years ago, and at the time, they thought the site would be used for hotel, residential, retail.

But since related purchases of site, the office market has come back strong in Manhattan. So now related hasn't made up its mind. It's trying to determine whether to stick with the original plan or to turn it into an office building. What's in this for the Saudis? Why are they interested in doing this in New York in particular? Well, Saudis in recent years have been trying to diversify as much as possible in their types of investments. And real estate has been one of the big areas of diversification. This is globally.

New York is one of the most attractive markets in the U.S., so naturally the Saudis will be interested in New York. What does this show us about the state of the most attractive markets in the US. So naturally, the Saudis will be interested in New York. What does this show us about the state of the real estate market in New York, especially after it was hit so hard during the pandemic? New York is sort of the envy of cities throughout the country. It's coming back on numerous different levels. Tourism is strong.

Apartment rents are strong. And now we're seeing the New York office market recover more so than most other cities. The office market in New York is very responsive to the financial services industry, and the financial services industry is leading the way when it comes to requiring workers to come back to offices. In the sense of residential, it's once again become a preferred place for young people as well as empty nesters to live. So in all senses, the city is bouncing back strong from the pandemic.

That was WSJ Reporter Peter Grant. Thanks Peter. My pleasure. Coming up, the big prize that President Trump is seeking from his meeting with Israel's Prime Minister. That's after the break. The Middle East, which was recently awash in conflict, may now be ripe for diplomacy. And that could be an opportunity for President Trump's brand of dealmaking. He's meeting today with Israeli Prime Minister Benjamin Netanyahu at the White House, the And that could be an opportunity for President Trump's brand of dealmaking. He's meeting today with Israeli Prime Minister Benjamin Netanyahu at the White House. The Journal's national security correspondent Michael Gordon joins me now with more.

Michael, what are some of the things that Trump and Netanyahu are going to be talking about at their meeting this evening? It's an important time for a stocktaking because it follows the Israeli and US military strikes in Iran. And the weakened status of Iran as a military power certainly has affected the entire region and opened up some opportunities for diplomacy. The big prize that both Israel and the US are seeking is normalization of relations between Israel and Saudi Arabia during President Trump's first term, there were the Abraham Accords, which led to normalization between the UAE and Israel Bahrain and Israel,

but the Saudi kingdom is really the big prize that everyone is seeking, and that's not going to come easy. But the first order of business is going to be Gaza and trying to seal a temporary ceasefire there that could potentially become a permanent one. Trump and Netanyahu have really traded a lot of words, both positive and somewhat critical of each other. Where does their relationship stand going into this meeting? They probably have a pretty good constructive relationship, but there are some points of

difference. Trump wants what he calls a settlement really with Iran. The Israelis are suspicious of diplomacy toward Iran. The big prize that they're seeking at the end of the day is Israeli-Saudi normalization. And there are a number of preconditions for that. One is a resolution of the fighting in Gaza. It's hard to imagine the Saudis agreeing to such a step while that's going on. And another is some sort of gesture or pathway for the Palestinians to pursue their political

aspirations, potentially with a state of their own. And that's an enormous lift and very difficult for the Israelis to agree to. So the big question here is, are we just going to have another temporary ceasefire in Gaza that will be followed by more fighting, some talks with Iran that are not likely to be productive, or is there going to be a more sweeping architecture put into place that would transform the region with a permanent settlement in Gaza, some sort of understanding with Iran, a movement toward Israeli-Saudi normalization, and something for the Palestinians. And the question is, are we going to get some little steps in isolation, or are these going

to be building blocks in service of a larger vision for the region? That was WSJ National Security Correspondent Michael Gordon. Thank you, Michael. Thank you. In other news, a crew in the Red Sea was forced to abandon ship after it was hit by Yemen's Houthi rebels yesterday. It's the first such attack since President Trump announced a truce in May after he said the group promised to stop attacking Middle Eastern waterways. The Houthis say their attacks are in support

of Palestinians in Gaza because the carrier belonged to a company that, quote, violated the entry ban to the ports of occupied Palestine. Earlier today, Israel's military said it carried out airstrikes on Yemen following several ballistic missile attacks by the Houthis in recent days. An Israeli military official said the attack was planned days in advance. And Russia's former transport minister was found dead in what authorities called a suspected

suicide. Russia's investigative committee said Roman Staravoyt was found in his car in a suburb west of Moscow with a gunshot wound, hours after he was dismissed from his post by President Vladimir Putin. While the precise circumstances of his death remain under investigation, the incident underscores the intensely volatile and often perilous nature of high-level Russian politics. The Cold Beer And finally, even if you cracked open a cold beer to have with your burger over the weekend,

overall the beer industry is having a bad year. But there's one bright spot. Even as sales tumble for other big beer brands, Michelob Ultra is growing. According to an analysis of NIQ data by Goldman Sachs, U.S. store sales of Michelob Ultra grew by about 3% in the 12 weeks ended June 14th, compared with the same period a year earlier. Over the same time frame, sales fell for Modelo Especial, Bud Light, Coors Light, and Miller Light. So what's Michelob doing differently? WSJ reporter Hailey Zimmerman says the brand is

meeting the moment for drinkers. The funny thing about Michelob Ultra is that it's been the same beer more or less since it was launched in 2002. They've always advertised themselves to health conscious consumers. The ads have always been about sports and fitness. Younger adults are moving to canned cocktails or non-alcoholic beer. And so Michelin Ultra, which is this low calorie, low carb, low alcohol by volume light beer, is suddenly meeting the moment. The other big factor in its rise is that its two biggest competitors at the top of the

beer sales leaderboard, if you will, are Bud Light and Modela Especial. Those both have sort of unique challenges in the past couple of years. Michelin-Boltra and Bud Light are actually both owned by Anne Azar Bush. Bud Light sales were really dented by a boycott two years ago, and it's never really recovered. And then Modelo has been hurt in recent months by the pullback in Hispanic consumer spending. And that's what's new for this Monday afternoon.

Today's show is produced by Pierre Bianame with supervising producer Michael Kosmides. I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.