Hormuz, hungry shoppers, and an AI loyalty test

World & Security

The diplomatic clock Donald Trump started on 17 June runs out on Monday. Washington and Tehran were supposed to turn a ceasefire framework into a broader settlement covering Iran’s nuclear programme and a path to reopen the Strait of Hormuz. Instead, as Gulf News laid out, there have been no publicly reported U.S. strikes on Iranian targets since late July, but the strait is still badly disrupted, oil sanctions are back, and so is the naval blockade. Iranian Foreign Minister Abbas Araghchi said over the weekend that Tehran no longer treats the deadline as relevant: they did not have a ceasefire that needed extending, they had “an end to the war, which has now taken on a new status.” Trump, never one to leave a waterway unclaimed, told a Long Island rally that after “defeating Iran” he would soon be “declaring the Hormuz Strait a territory of the United States.” Iran’s deputy foreign minister replied that the strait “cannot be seized by tweet, nor by aircraft carrier.” Araghchi separately stressed that talks with Oman are about a temporary shipping lane, not a political reopening, which still depends on U.S. conditions.

The Navy is paying in sailors. The USS George Washington is leaving the western Pacific to relieve the USS Abraham Lincoln in the Middle East, a shuffle that temporarily leaves the Pacific without a U.S. carrier even as China drills near Scarborough Shoal and off Japan’s Okinotori. The Lincoln has been at sea more than 260 days, more than 200 without a port call; families report food, water and laundry problems and psychological strain among the roughly 5,000 aboard. Trump told reporters the stretch was “not nearly long enough.” In a related act of bandwidth management, he ordered Pete Hegseth to “substantially reduce” this week’s Ulchi Freedom Shield exercises with South Korea — 11 days, 18,000 South Korean soldiers — after Seoul declined to help denuclearise Iran and because Kim Jong Un has been, in the president’s telling, “unthreatening and respectful.” North Korea had just resumed UN-banned ballistic missile tests. Senator Mark Kelly called hollowing out the drills “shortsighted and a mistake.”

The rest of the map did not wait. Jared Kushner held a rare meeting in Egypt with Hamas chief Khalil al-Hayya to salvage a 15-point Gaza roadmap that Benjamin Netanyahu publicly rejected last week; Saudi Arabia, the UAE and other regional powers accused Israel of obstructing peace. Israeli airstrikes in southern Lebanon killed at least 11 people, including children, the deadliest attacks since a 20 June truce. Ukraine said Flamingo cruise missiles hit a rocket centre in Samara that supports Russia’s Rassvet satellite network, while a Russian missile attack on Kyiv sparked fires. And U.S. C-17s began ferrying water, shelter kits and Starlink terminals to Colombia after a 7.4-magnitude earthquake killed at least 285.

Markets & Economy

Friday’s tape had the energy of a shopper putting items back on the shelf. July retail sales fell 0.6%, the steepest monthly drop since May 2025 and a miss against expectations of a 0.1% gain. Online sales sank 2.2%, car dealers 2%, petrol stations 0.9%; restaurants, ever the last to blink, rose 0.5%. Some of that is calendar noise — Prime Day and World Cup spending padded June — but the University of Michigan’s preliminary August sentiment index tumbled 4.2 points to 51.0, far below the 55.0 that Wall Street had pencilled in. The 10-year yield still climbed to 4.682%, and Thursday’s 30-year auction printed 5.216%, the highest since 2001. The S&P 500, Dow and Nasdaq 100 all closed slightly lower. A Financial Times poll found 53% of registered voters feel worse off financially than on 19 January 2025. Gasoline averaging over $4 a gallon, and a war that only 35% of Americans approve of in a Reuters/Ipsos figure cited in Hormuz reporting, are not helping the mood.

Beef, that most American of midterm inflation mascots, is finally meeting resistance. Sales volumes in the 13 weeks through mid-July, covering Memorial Day and the Fourth, fell 0.3% from a year earlier after two summers of roughly 5% growth. Ground beef averaged $7.116 a pound in July, still near a record, though the 9.4% year-on-year rise was the mildest in 17 months. The cattle herd remains near a five-decade low; Tyson announced more plant closures on Thursday. Meanwhile German firms slashed first-half direct investment in the United States to €4.3 billion ($5 billion), a three-year low and nearly two-thirds below a year earlier. Companies already in America are still ploughing profits back in; they are simply not writing many new cheques. Moody’s Mark Zandi, surveying the immigration squeeze, tariffs and the Iran war together, called them “three massive, policy-induced supply-side shocks” — with AI the only thing keeping the economy from “complete shambles.”

The tariff architecture is designed to last. After the Supreme Court struck down emergency levies in February, the White House in July reached for Sections 301, 232 and 338 — the last a Smoot-Hawley antique — to rebuild a stack that trade economist Kent Jones argues U.S. consumers will increasingly pay. The Dallas Fed estimated that without tariffs the Fed’s preferred inflation gauge would have risen at a 2.3% annual rate in March instead of 3.2%. Twenty-five states have sued over the new 301 duties. In a quieter scoreboard, about $600 billion in Biden-era clean-energy spending has survived 18 months of rollback attempts, even as more than $540 billion in tax breaks were eliminated and the EPA tried to kill $29 billion in grants, some later reinstated by courts.

Technology & Industry

Washington is preparing to tell partners they cannot sit in both AI clubs. A leaked State Department draft, reviewed by Reuters and reported by TheStreet, would warn the 35 signatories of June’s AI Opportunity Statement that joining Beijing’s World Artificial Intelligence Cooperation Organization means exclusion from the U.S.-led coalition. “To be part of everything is to be part of nothing,” the letter says. Pax Silica, launched in December 2025, now has 25 members; WAICO launched in Shanghai on 16 July with 29 founders and no major Western democracy. Kazakhstan is the known overlap, which matters because of its critical minerals. Nvidia’s first-quarter fiscal 2027 revenue hit $81.6 billion, $75.2 billion of it data centre, split between hyperscalers and a newer sovereign-and-enterprise bucket. The addressable market, in other words, is becoming a guest list.

Anthropic is showing the kind of numbers that make bankers misty. Preliminary second-quarter revenue topped $11.5 billion, up from $787 million a year earlier and above $4.73 billion in the first quarter, with positive adjusted operating income. Run-rate revenue had crossed $47 billion in May, against OpenAI’s annualised figure of more than $40 billion, with the usual caveat that the two firms may not count alike. Investors talking to the Financial Times have floated a valuation of at least $2 trillion in an October IPO that would be the largest debut on record, which is either visionary or the sort of number you write down after too much espresso. Goldman Sachs, playing the adult in the room, found that only 2% of S&P 500 companies even quantified AI’s effect on second-quarter earnings; hyperscalers and other infrastructure winners saw earnings jump 54% and accounted for about half of index growth. Median monthly AI spending per worker rose to $12 in July from $5 at the start of the year, per the Ramp index Goldman cited. An Epoch AI survey found one in five employed Americans now hands at least one former human task to a model, often with little editing.

Space, at least, still launches on time. On Saturday evening SpaceX flew two Falcon 9s 38 minutes and 31 seconds apart from opposite coasts — Globalstar replenishment from Florida, a classified USSF-366 payload from California — the company’s shortest interval between orbital missions. Both boosters landed; the dual recovery pushed SpaceX’s landing count to 650. The firm is at 96 Falcon 9 flights in 2026, about three-quarters of them Starlink. If the AI race is a loyalty test, the launch pad remains a production line.

Politics & Policy

Todd Blanche, sworn in last week after months as acting attorney general, went on Meet the Press and declined the one pledge every attorney general is expected to recite. Asked whether the Justice Department would always act independently of the White House, he said, “No, I’m not going to pledge that. And no attorney general ever should.” Pressed on an unethical or illegal order, he answered that Trump “would never do that. He never has. He never will.” Forty-nine senators, including two Republicans, had voted against confirming Trump’s former personal lawyer. Blanche offered “integrity” instead of independence, and an example: a blanket pledge would stop him complying if the president asked DOJ to “go after every violent criminal.” Critics noted that this is not, historically, what the question meant. House Minority Leader Hakeem Jeffries, on the same programme, called the department “a wholly owned subsidiary of the Trump cartel.”

Blanche also said there is an “absolute” possibility the department will take its voter-roll fight to the Supreme Court. DOJ has lost 22 cases so far after suing 30 states and Washington, D.C., for refusing to hand over rolls that include dates of birth, addresses, driver’s licences and the last four Social Security digits. Some of the holdouts are Republican-led. The Kennedy Center board, in a more aesthetic dispute, voted to put Trump’s name back on the facade more than two months after a judge ordered it removed. A federal judge in Washington separately refused to halt 62 miles of border wall along the Tohono O’odham Nation’s Arizona reservation, citing a 1907 Theodore Roosevelt proclamation that reserved 60 feet along the boundary — a proclamation that predates the 1917 reservation itself. Homeland Security said Friday that Temporary Protected Status had ended for nationals of Cameroon, Ethiopia, Somalia and South Sudan, among 13 countries in the latest wave.

Human Stories / Social Trends

Lake Powell, the country’s second-largest reservoir, fell to 3,519.91 feet on Saturday, a hair below the April 2023 record, and sits less than 30 feet above the point at which Glen Canyon Dam can no longer make hydropower. Lake Mead, nine days earlier, hit its lowest level since it first filled. Together they hold just under 60% of the Colorado basin’s stored water, serving about 40 million people and more than 5 million acres of farmland. The river has shrunk roughly 20% since 2000. Jack Schmidt of Utah State called it “uncharted territory.” Federal authorities are expected to publish cuts through 2028 after states failed to agree. The Midwest, meanwhile, was underwater in a more literal sense. Indiana reported at least five deaths after more than 28 centimetres of rain in two days sent the White River above seven metres, breaking marks dating to 1913. Indianapolis saw its worst flooding in more than 30 years; crews rescued at least 95 people and 45 pets. At the storm’s peak more than 600,000 customers lost power. Illinois has already logged more than 200 tornadoes this year, beating its previous annual record.

In Massachusetts, anti-hunger advocate Liz Wills-O’Gilvie, 63, said she has not eaten for 15 days to press the state over SNAP: more than 5.3 million people nationwide have lost benefits since 2025 changes, and Massachusetts enrolment is down nearly 182,000, including almost 65,000 children. On Friday night at Manhattan’s Central Synagogue, Larry Montes, 46, of the Bronx, allegedly stormed the bimah, knocked over Shabbat candles and assaulted a congregant and a guard. He faces 14 charges, including six hate crimes. The congregation relit the candles and kept singing. NYPD Commissioner Jessica Tisch, who grew up in the synagogue, said a place of worship “should never be a crime scene.” Across the country, three-time Trump voter Brent Jindra watched ICE detain his wife, Galina Bobreneva, after they landed at Burbank Airport — a new front, the Times reported, of arrests of people with active cases and no criminal history. “A U.S. citizen just watched his wife get dragged away,” Jindra said. The policy he voted for arrived, as policies do, without a family exemption.