Key global financial headlines from last night and this morning include:
1. US Plans to Resume Naval Escort Operations This Week as Saudi Arabia and Kuwait Lift Restrictions on Military Bases and Airspace According to US and Saudi officials, Saudi Arabia and Kuwait have lifted restrictions on US military use of their bases and airspace. These restrictions were initially imposed after the US launched an operation aimed at securing the Strait of Hormuz. This move removes a major obstacle for the Trump administration's plan to send naval vessels through this critical waterway. US officials stated that the Trump administration now plans to restart escort operations—using naval and air assets to protect commercial ships. The operation was previously paused after only 36 hours this week. A specific restart time has not been set, but Pentagon officials indicated it could happen as early as this week. The US operation to secure the strait relies on a large fleet to protect merchant vessels from Iranian missile and drone attacks, making access to Saudi and Kuwaiti bases and airspace crucial for its execution.
2. Trump Gives EU Until July 4 to Approve Trade Deal, Threatens Tariff Hike Otherwise US President Donald Trump stated he will give the European Union until July 4 to complete approval of a trade agreement with the US. He had previously threatened to raise tariffs on EU cars as early as this week if a deal was not finalized. Trump said on Thursday that he set this new deadline following a call with European Commission President Ursula von der Leyen. He warned that if the EU fails to finalize the agreement by then, tariffs on EU goods would be increased. Trump posted on social media: "I agreed to give her time until our country's 250th birthday, otherwise, sadly, their tariffs will immediately jump to much higher levels."
3. OpenAI and Broadcom's $180 Billion Chip Gambit Cools: Initial Phase Costs $18 Billion, Microsoft Purchase Commitment Still Pending When OpenAI and chip design company Broadcom announced last fall that they would jointly manufacture custom AI chips, they presented it as a done deal. The companies said the deal would bring enough chips online by 2030 to consume 10 gigawatts of power—equivalent to the output of five Hoover Dams—aiming to reduce OpenAI's costly reliance on Nvidia hardware. What they did not disclose was that they had not yet figured out how OpenAI would pay for the project. Months later, according to an internal memo and two people involved in the negotiations, the companies are discussing an agreement where Broadcom would fund the first phase of chip production. This phase would consume 1.3 gigawatts of data center capacity at a cost of approximately $18 billion. At this rate, the full 10-gigawatt project, codenamed Nexus, could cost $180 billion for chip production alone, excluding data center construction and other expenses.
4. Musk Bets Again: SpaceX IPO Countdown, Plans $119 Billion Investment for Terafab Chip Plant SpaceX's capital investment bill is growing by tens of billions of dollars as the Elon Musk-led company prepares for a major initial public offering (IPO). According to a local government notice about the Texas project, the Terafab chip complex, which SpaceX plans to co-develop with Tesla Motors, is estimated to require at least $55 billion in capital expenditure. The integrated rocket, satellite, and AI company is investing in space-related infrastructure, including launch pads in Florida and a new solar cell factory in Texas. The company also plans to invest significantly more in the coming years, potentially launching up to one million AI satellites into low Earth orbit. These planned expenditures reflect Musk's ambition to pursue projects on a massive scale. Documents related to the company's planned IPO are expected to give investors a clearer picture of how SpaceX anticipates allocating this spending.
5. Apollo CEO Warns of Major Geopolitical Realignment, Says World is Unprepared Apollo Global Management CEO Marc Rowan stated that the world is not prepared for the shocks coming from artificial intelligence, price pressures, and rising government debt. Speaking at a National Association of Insurance Commissioners forum in Washington D.C. on Thursday, Rowan said a "massive geopolitical realignment" is underway, characterized by rising tariffs and the reshoring of manufacturing. He added that some of these measures, such as restricting the free flow of goods and labor, could be inflationary. However, he noted, "But we haven't really seen the inflation yet."
6. NY Fed's Williams: Fed Will Ensure Inflation Declines New York Federal Reserve Bank President John Williams stated that policymakers will "ensure" that inflation comes down. Williams, speaking at an event in Newburgh, New York, on Thursday, said the US economy is showing "remarkable" resilience and is expected to grow at about 2% this year. Williams stated, "Businesses and consumers continue to spend and invest."
