How Starbucks Is Dodging Dismal Consumer Sentiment

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Brian Niccol (0:02)

At Vanguard, investors are also owners, and their voices are heard. And now with Investor Choice, they have an even greater voice when investing. It's just another reason millions of investors have turned to Vanguard for 50 years.

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50 million investors, 50 million voices.

Brian Niccol (0:18)

Vanguard. Vanguard is owned by its funds, which are owned by Vanguard's fund shareholder clients. To learn more, visit vanguard.com.

Margarita Stankati (0:24)

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Luke Vargas (0:32)

President Trump hints at an extended Iran blockade as its economy reels from the heavy cost of war. Plus, AI jitters return to Wall Street as four tech giants prepare to face investors. And against a backdrop of consumer anxiety, why Starbucks is targeting service over deals?

Brian Niccol (0:51)

It's not going to be a game of discounting or one-off promotions. I think people actually really do appreciate knowing, hey, if this is a $3 cup of coffee or a $5 latte, I know I'm going to get a great experience for that $5 experience. I'm in.

Luke Vargas (1:07)

It's Wednesday, April 29th. I'm Luke Vargas 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.

President Trump has instructed aides to prepare for an extended blockade of Iran, aiming to compel the regime to give up its nuclear ambitions. That's after a Monday meeting in which officials say that Trump rejected Iran's proposal for peace talks and assessed that his other options, to resume bombing or walk away from the conflict, carried more risk than blocking Iranian ports. Here's Journal Foreign Correspondent Margarita Stankati.

Margarita Stankati (1:43)

Iran's deal essentially offered to stop its attack in the Strait of Hormuz in exchange for a full end to the war and the lifting of the US blockade of Iranian ports. And as part of the deal, also Tehran wanted to postpone any discussions about Iran's nuclear program. And the US sees that as evidence that the blockade as an instrument of economic coercion is working.

Luke Vargas (2:09)

Trump's decision comes even though the blockade has driven up gas prices and hurt his polling ahead of the midterms. Margarita says now the calculus for Iran and the US looks increasingly like a zero-sum game.

Margarita Stankati (2:22)

The US and Iran have both weaponized this trade of horror moves with the goal of forcing the other to rethink its political calculations. But this comes at a cost. So Iran closed this trade early on in the conflict and effectively using this critical waterway to hold the world economy hostage. The US responded with a naval blockade of its own dealing a devastating blow to Iran's economy. So the situation at the moment is that US officials are betting that Iran will soon crack because of this deepening economic crisis. Iran, however, is betting that the US will crack first because of the repercussions the closure of the strait is having on global markets and also to bring down gasoline prices at home. But the question is how much pain is both sides willing to endure to have a stronger hand in negotiations?

Luke Vargas (3:16)

The White House is warning lawmakers about more disruptions at airports with funding for DHS workers set to run out by May. To avoid that, its Office of Management and Budget is calling on House lawmakers to pass a DHS funding bill that was approved by the Senate last week, though that may not be so easy. Republican House Majority Leader Mike Johnson has pointed to problematic language within the DHS bill and has thus far declined to put it up for a vote. Meanwhile, other divisions have broken out among his caucus over reauthorizing a controversial overseas spying program and the latest five-year farm bill effectively paralyzing the chamber.

Jimmy Kimmel is doubling down on his criticism of President Trump after the president called for his firing over a joke last week in which the late night host said that Melania Trump appeared like an expectant widow. And in yesterday's monologue, Kimmel played a clip of Trump apologizing to the First Lady for likely not being able to match his parents' 63-year marriage.

Jimmy Kimmel (4:15)

Only Donald Trump would demand I be fired for making a joke about his old age and then a day later, go out and make a joke about his old age.

Luke Vargas (4:24)

The clash coincides with FCC Chairman Brendan Carr's early review of Disney's broadcast licenses, which include Jimmy Kimmel Live Broadcaster, ABC.

The Fed is set to announce its next rate decision later today, its last meeting before Chair Jerome Powell's term ends next month. With it all but certain to hold rates steady, investors will be focused on whether it sticks with language dating back to late last year, implying that its next move was most likely to be a rate cut. A few hours later, earnings season will reach a fever pitch with a quadruple header of big tech results this afternoon from Alphabet, Amazon, Microsoft, and Meta. They're reporting as AI jitters return to Wall Street, raising investor eyebrows about the wisdom of massive investments.