WSJ What’s News - What Comes Next for the Middle East

Episode Date: October 13, 2025

P.M. Edition for Oct. 13. After a momentous day in the Middle East, world leaders are looking ahead to the next phase of the cease-fire deal for Israel and Hamas. WSJ national security reporter Robbie Gramer discusses what’s to come from peace negotiations. Plus, three economists win the Nobel Prize for their work explaining how innovation drives economic growth. And all that investment in artificial intelligence is juicing the economy—is it also making workers more productive? We hear from WSJ reporter Justin Lahart on what the evidence shows. Alex Ossola 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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We'd love to talk, business. What's in store for the Middle East after Israel and Hamas swap prisoners and hostages? Plus, three economists win the Nobel Prize for work on how innovation drives economic growth. And is all that investment in artificial intelligence paying off? What AI is really doing is through this massive amount of investment, that investment itself is boosting gross domestic product. But that's not the promise. Ultimately, you want to see AI boosts growth by boosting productivity, by making workers get more done. It's Monday, October 13th.

I'm Alex O'Silliv 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. It was a momentous day in the Middle East as the first stage of the PC. plan between Israel and Hamas went into effect. The 20 remaining living hostages from Gaza had emotional reunions with their loved ones in Israel. And Israel released the nearly 2,000 Palestinians it had agreed to free under the terms of the deal. Large crowds greeted them as their buses arrived in the West Bank and the Gaza Strait. In an address to Israel's legislature, President Trump vowed to extend his

his peacemaking to the wider Middle East. This is the historic dawn of a new Middle East. Trump then flew to Charm El-Shake, Egypt, to meet with leaders from the Middle East and Europe involved in efforts to end the war and plans to rebuild the Gaza Strip. There, President Trump and the leaders of Egypt, Turkey, and Qatar, signed a document recognizing the ceasefire and hostage-release deal between Israel and Hamas. Israel and Hamas are expected to begin negotiating a peace deal that would see the U.S. designated terrorist group disarm and give up power in Gaza. For more on what comes next, I'm joined now by

WSJ National Security Reporter, Robbie Grammer. Robbie, today was phase one. The hostages have been returned. The prisoners have been returned. How did all that go? Well, fortunately, for everyone, there were no surprises. So all 20 living hostages have been released and returned to Israel. They were freed in two groups. And as part of the agreement, Hamas agreed to release the 28 bodies of hostages. So far, they've released only four. There's some open questions on whether they know where all the remains are. The group warned during negotiations, it might be unable to find all the bodies by the 72-hour deadline that Israel set. Israel has said it's a red line. But based on the officials I've talked to, everyone sees this as not a major hurdle toward moving toward the next

phase of the peace plan. Right. President Trump said in Egypt today that that second stage has already begun, where do negotiations now stand? We're not quite clear on all the aspects of phase two. Trump and other world leader signed a document that connected this initial ceasefire deal to the next phase of the peace agreement. But what's left unsaid and what's yet unclear is the future governance of Gaza. Hamas hasn't agreed to Israel's demand that it gives up any role in governance in the future of Gaza. What about rebuilding? Who's going to pay for the rebuilding of Gaza? How is that going to be structured? And how will the phase withdrawal of Israeli forces from Gaza be implemented in the future, especially if it looks like both sides on the peace agreement might

falter or sort of renege on some aspects of this? It's still very fragile. You were mentioning President Trump and his visits to Egypt and Israel today. This has been quite a victory lap for him for the peace field that he helped to broker. And he spoke today to the Israeli legislature. to big applause. What does this show us about his reputation as a statesman? I mean, it really proves all of his naysayers wrong. Trump obviously has this very unorthodox approach to diplomacy, shall we say. You know, he's very finicky. He can be very unpredictable. But at the same time, he's really bucked the traditions of American statesmanship that past presidents has had. And all of his advocates, all of his supporters in Washington and

elsewhere, say, you know, the proof is in the pudding. He's proven here that his approach has paid off. That was WSJ reporter, Robbie Grammer. Thanks, Robbie. Thanks so much for having me. Today, Joel Mulcure, Philippe Agion, and Peter Howitt were awarded this year's Nobel Prize in Economics for their work explaining how innovation and what economists call creative destruction drive economic growth. The Nobel organization said the three three economists have deepened the understanding of what propelled economic growth over the past two centuries to levels that are high and relatively stable by historical standards. Mokures studied the process of innovation that drove the industrial revolution and paved

the way for the new era of steady growth. Agion and how it constructed mathematical models that help explain how technological change can benefit the economy, even as it harms some existing businesses. Their work is particularly relevant today when enthusiasm over artificial intelligence is running high, and economists are trying to assess how the technology might shape the economy and society in years to come. U.S. stocks bounced back today after Friday's sell-off. Among major indexes, the NASDAQ led the gains, adding about 2.2%. The S&P 500 rose about 1.6%, and the Dow was up roughly 1.3%. Gold futures notched a new high today, passing $4,100 per Troy ounce.

Silver prices also hit an all-time high today, eclipsing a 45-year-old record from 1980. Comments from President Trump and senior administration officials eased investors' fears of a revived trade war with China. As we mentioned in this morning show, President Trump posted on social media yesterday, quote, don't worry about China, it will all be fine. And then in an interview this morning on Fox business, Treasury Secretary Scott Bessent said that new tariffs on China don't have to happen. We have substantially de-escalated. President Trump said that the tariffs would not go into effect until November 1st. He will be meeting with party chair she in Korea.

I believe that meeting will still be on. WSJ Markets reporter Hannah Aaron Lang says this situation may have reminded investors of another from earlier this year. Basically, this was a very similar scenario that we saw in April, where the president originally was quite bombastic in his tariff threat. investors got quite frightened that there might be another trade war on with really significant ramifications for both economies and companies across the globe. And then the administration subsequently walked that back and basically assured investors that they were talking a big game, but that this might not necessarily happen.

And it seems like investors are ready to believe that this is not going to be another big trade war between the world's two largest economies. Coming up, is AI actually making workers more productive? More on that after the break. 20th Century Studios presents a legendary movie of that. Springsteen, deliver me from nowhere. Stop, no, God! James like Gus, baby we were born.

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Springsteen, deliver me from nowhere. Only in theaters, October 24th. Get tickets now. In corporate news, J.P. Morgan Chase said today that it would invest $10 billion in companies it deems critical to U.S. national security, part of a push to protect the U.S. economy amid trade tensions with China and other countries. The bank said it would invest in mostly U.S.-based companies, and options include producers of rare earths, the minerals needed to make computer chips, electric vehicles, and other technologies. J.P. Morgan has already been involved in the Trump administration's recent investments in companies considered important to U.S. national security. In July, the bank and Goldman Sachs agreed to lend $1 billion to MP materials, the biggest rare earth producer in the U.S.

OpenAIs deals with chip and cloud companies in recent months have helped propel stocks. Today, the company announced its latest agreement with AI chip designer Broadcom to deploy 10 gigawatts of custom AI chips and computing systems over the next four years. The companies didn't disclose financial terms, but people familiar with the matter, say that the new agreement will be worth multiple billions of dollars. With this deal, the company behind ChatGPT has recently made agreements to buy computing capacity totaling 26 gigawatts, enough to meet the summer electricity needs of New York City more than two times over. OpenAI is just one of the companies investing heavily in artificial intelligence, and it's helping the U.S. economy grow.

But is AI also helping workers be more productive? For more, I'm joined now by WS.J. economics reporter, Justin Layhart. Justin, how would AI boost worker productivity? It can do it in two main ways. The first way would be to just automate jobs away. So AI takes over the work that somebody was doing. Then the other way to think about it is it can maybe give workers superpowers in a way. Just like computers have made us more productive.

AI could simply make it easier for a worker to get more done. And do we have a sense yet of whether AI is actually doing that? It is, but at this point, it's just on the margins. What AI is really doing is through this massive amount of investment, that investment itself is boosting gross domestic product, but that's not the promise. Ultimately, you want to see AI boosts growth by boosting productivity, by making workers get more done. If workers are more productive, then the economy can grow more quickly, and there's more pie to go around for everybody to share. Now, we don't know what AI is going to do, what kind of technology it's going to be, if it is going to wholesale replace a lot of workers, or if it's going to be more what economists would consider augmentative. It's going to help people do more and get more done and just create a better standard of living.

So stepping back then for a second, I mean, we talked about all of this investment in AI and how it's really sort of boosting the U.S. economy right now. What does this mean about whether all this investment is really going to pay off? The question is pay off how? Who is it going to pay off for? Are the companies that are doing all the investing? Are they the ones that are going to benefit ultimately in the 1990s during the dot com and telecom days? There was tons and tons of fiber optic cable being laid out. And a lot of those telecom companies and dot com companies or their investors didn't really benefit from all of that investment.

but the economy ultimately did. We as Americans ultimately benefited from it. That was WSJ reporter, Justin Layhart. Thank you, Justin. Thank you. And that's what's news for this Monday afternoon. Today's show is produced by Pierre Biennameh and Zoe Colkin with supervising producers Jana Heron and Holly Arbell.

I'm Alex O'Sullough for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Thank you.