Oil Nears $100 as Trump Considers Expanding Iran Conflict

SPEAKER_1 (0:00)

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Luke Vargas (0:33)

Oil climbs back towards $100 a barrel as Huthy militants expand the conflict in the Middle East and the US surges troops to the region.

Marco Rubio (0:42)

One of the great things about our country is that it is a large, powerful country. It has the ability to be present in the Western Hemisphere, in the Indo-Pacific, in Europe, in Africa, in the Middle East and anywhere else where our interests are vital.

Luke Vargas (0:53)

Plus, shares of Alphabet and Tesla tumble as the big-spending tech giants turn cash flow negative and investors look on warily as Nike tries to reboot its troubled operations in China. It's Thursday, July 23rd. 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.

Oil futures are rising again today after Iran-backed Houthi militants claimed a tax on a pair of Saudi tankers in the Red Sea. That's as analysts had begun to warn of the risk to energy markets of simultaneous supply disruptions in the Bab el-Mandeb Strait near Yemen and the Strait of Hormuz. Meanwhile, the US is surging special operations forces to the Middle East, putting bombers on both sides of the Atlantic on high alert and sending over 150 medics to a military hospital in Germany. The preparations give President Trump more options as he considers expanding the conflict against Iran and potentially targeting the Houthis, something Secretary of State Marco Rubio heard here courtesy of Sky News addressed today as peace negotiations with Iran continue to stall.

Marco Rubio (2:04)

The problem with Iran is every time they make a deal, the people that are in charge there, they either break it or they want to change it. So it looks like they're not ready to make a deal. So they're going to continue to pay a price and every night the price gets higher and higher and higher.

Luke Vargas (2:17)

The FDA is investigating a new outbreak of cyclospora that sickened at least 72 people, adding to three other active flare-ups, the largest of which involves more than 1,600 cases. That outbreak has been linked to shredded Mexican iceberg lettuce supplied by Taylor Farms to Taco Bell across five states, though the companies say the product has since been pulled from the market. The source of the other outbreaks remains unknown. Shares in several publicly traded restaurant companies, including Taco Bell parent Yum Brands fell Wednesday following the announcement. A proposed mega-merger between two of America's biggest railroads has received a major boost. That's after Union Pacific reached a deal with Canadian National Railway, or CN, to end its opposition to the deal in exchange for train operating rights in the Midwest.

CN had opposed the more than $70 billion tie-up between Union Pacific and Norfolk Southern over competition concerns, a sentiment shared by customers and rival companies who fear the merger will drive up freight prices.

In Markets, shares of Alphabet are pulling back in off-hours trading, despite the company beating analyst estimates for the second quarter. Tech reporter Meghan Brobowsky says that the sell-off can be traced back to new disclosures about Google's capital spending on AI this year.

Meghan Brobowsky (3:42)

It's now saying it will be in the range of $195 billion to $205 billion, so crossing $200 billion for the first time. At the same time, in addition to increasing capex, Google's free cash flow also turned negative. The company's CFO said its free cash flow would likely remain under pressure in future quarters as the company continues its AI infrastructure build out.

Luke Vargas (4:08)

That spending push comes as Google has been playing catch up in the AI race with its Gemini 3 model released in November, losing ground to offerings from OpenAI and Anthropic. CEO Sundar Pichai conceded to investors yesterday that staying at the forefront of AI isn't easy.

Sundar Pichai (4:25)

At any given moment when you take a snapshot, it feels dynamic.

We've had clearly frontier models. There are many attributes on which we are still at the frontier. There are areas where we have acknowledged we need to improve. Coding and agent decoding is an example of that. And I think the teams are very, very focused on it.