Live from Washington, D.C., this is "Balance of Power" with Joe Mathieu and Kailey Leinz. Joe: President Trump takes the red state tour to Maryland. The president is paying a visit to spend time with defense contractor Anduril, all on the road to the midterms. I am Joe Mathieu alongside Kailey Leinz. The president leaving the bubble.
But not by much. Is this a drive -- Joe: Maybe helicopter. Kailey: Quick helicopter ride. He will be highlighting defense manufacturing in particular. And the role is known for its submarines. Tomorrow he will be back on the road in Texas, and this is fresh off of his visit to Nebraska.
He was confessing he did not know what red dye diesel was. That was one of the big announcements, lifting restrictions on its use. People seem to be feeling good about prices at the moment. Wall Street, all-time highs on the S&P 500 and Nasdaq. Interest rates give us breathing room. For consumers, it remains a different story.
Polling suggests that consumers are struggling with affordability, and higher buying costs are not helping with that narrative. Let's get a check on that and everything else as we turn to the markets. Charlie Pellett is back in New York. Charlie:
Thank you very much, Kailey and Joe. Let's get to the S&P 500 index. You mentioned the record there. 7798 will be the record to be closer, and again for Nasdaq -- another gain for Nasdaq. The Dow industrials up 0.5%, 51539 where we stand. The old high was a setback in August. The two-year, 4.79%. 30-year, 5.64%. Gold up $18, 0.4%. West Texas Intermediate crude higher by 0.1%.
Barrel of Brent, $1.52. Wasn't Nvidia nearing a $6 trillion market cap as return to the AI chipmaker after a disappointing start to the... Stocks pushing higher and potentially could see a record for the S&P 500 index, up 0.7%. For on-demand news 24 hours a day, subscribe to "Bloomberg News Now" wherever you get your podcast. That is a Bloomberg Business Flash.
Charlie Pellett keeping tabs on the market from New York. Thank you so much. Looking to "Balance of Power" on this Tuesday -- welcome to "Balance of Power" on this Tuesday. You probably heard a lot about red dye diesel, something you probably haven't heard about prior to yesterday, and the announcement from President Trump, at least intention now fulfilled with an executive order, this tax-exempt diesel reserve for the agricultural sector and now extending to on-road vehicles to provide a little bit of relief in terms of the price, coming down from record levels. If you have not heard of red dye diesel, you are in good company. The president hasn't either. Tyler Kendall asked about this, and he seemed slightly confused about what she was asking, and made it clear that this was a new concept to him when he spoke at that rally in Nebraska yesterday.
For many years, farm vehicles, construction equipment, and other off-road vehicles have used what is known as red dye diesel. Do you know what that is? I don't know what the hell it is! Whatever it is, it's supposed to be very good. Red dye diesel, everybody. Tonight I'm going to sign an historic executive order to officially waive the off-road requirement and allow anyone to purchase tax-free red dye diesel for any reason.
Does anyone know what the hell it is? JD Vance does. Fascinating reporting in "The Washington Post" about where this idea was born. It was two weeks ago JD Vance was in Iowa talking with a Republican nominee for governor, and they got together backstage. He asked him what the administration could do to help farmers, knowing that high fuel prices and poor market conditions have weighted down Republicans' chances in the Midwest. He had an answer ready: allow farmers to take advantage of tax-exempt diesel intended for off-road use on farms and construction sites. He started making phone calls from the motorcade, and two weeks later, last night, the president signed that document with Natalie on stage. We go to the White House to talk to Tyler Kendall. Our Washington correspondent brought this up as the president was leaving. The president did not seem too sure what you were asking him about, Tyler. Can we tell the audience that this plan will work?
Just on the extent -- to some extent, Joe, the administration thinks so. This red dye diesel is tax-exempt, just about $0.24 a gallon. But much to your point and this story in the "Washington Post" about how the scheme together with the vice president JD Vance is that farmers use this product. That is why it is tax-exempt. It goes into their equipment, not into their cars. This is about curbing the cost for driving a pickup truck rather than broader costs. It does not address the structural issue of supply of diesel, with some economists pointing out that this constrained supply. It does appear that the administration is trying to get ahead of that argument in particular. We heard from the president saying they are working to ensure that there is enough stockpile that everybody can tap it. I did want to bring up recent data that we got this morning from research that shows total flows through the Strait of Hormuz, only 11% of that is refined product like diesel. That was 20% before the war. We are still seeing critical supply disruptions. As I'm sure you can hear behind me, diesel likely in use now at the White House because it appears lawnmowers are constantly going every time I join you guys on this program.
The landscaping work on the North Lawn does never seem to end. The president will be departing the White House today, making tracks to Maryland, a rare blue state on these red state visits he has been making in the final stretch to the midterms. The announcement that Anduril is making outside Baltimore on shipbuilding.
Of the $7 billion investment from Anduril on this massive facility. The president will be at the Sparrows Point shipyard with remarks at 4:00 p.m. Eastern from opening to the official schedule. The Navy has been trying to upgrade its class of nuclear submarines, and the idea has been that many of the traditional defense contractors and the current industrial base have been missing goals and benchmarks toward that revitalization effort. Now you have the Pentagon trying to work with some of these newer defense-tech companies to ramp up production and make technological leaps, and in comes Anduril. What this means for President Trump and the White House is the president wants to tap his economic policies that have remained popular, like onshoring manufacturing and boosting manufacturing jobs. We did hear from Wes Moore's office. Our understanding is he is not going to be at the event, but this is expected to employ 3,100 people and be operational by 2030. I expect the White House continues to play defense on the economy. This is something they are looking to tout.
Tyler Kendall at the White House, our Washington correspondent. Thank you so much. As Anduril makes this announcement pushing into subs and shipbuilding, they are better known for their drone technology, which has come into focus in recent years because of the changing warfare and drone warfare in this conflict in the Middle East. Iranian drones have posed a real threat to U.S. interests, not just in the Middle East but potentially in the U.K. as well. We have reporting in "The Washington Post" about the evacuation of a fleet of B-1 bombers from the U.K. airbase due to what the Post says were spiked fears of a financial Iranian drone attack against planes and personnel at the facility. We spoke to Senator Mark Warner about this Saturday and asked whether or not he had been briefed on this evacuation.
We have not been briefed. But again, if you're going to start a war, wouldn't you prefer -- brief your closest allies? It appears to me that there are parts of the U.S. government did not know these planes were leaving. Let me be clear: we have to protect our personnel first and foremost. But this kind of hurried exit at least gives Iran a propaganda win that they can claim, 'Hey, we have chased Americans out of the closest allies, the British, airbase.' This ad hoc approach to this war from day one. As we've gone through on your show before, on every metric, the regime is worse. They still have drones. We are not getting the enriched uranium. I see no scenario where the Iranians, whenever the president decides to declare victory, won't be extracting a toll on a permanent basis on both oil, diesel, aluminum, other things that come out, and fertilizer. Frankly, some of the components on fertilizer come out of that region as well. This is not good for America.
There is more reporting on the removal of the B-1 bombers. Kailey mentioned "The Washington Post." "The New York Times" reporting that the rush to withdraw the bombers was highly unusual, made so quickly from an allied airbase in a peacetime country thousands of miles from a combat zone. The need to remove the bombers was so urgent, Kailey, some of the planes and flight crews left while aerial refueling craft were still being deployed. It is part of the conversation we want to have with the Republican congressman from North Carolina's 13th district, member of the House Judiciary, Transportation and Infrastructure, Homeland Security, and Ethics committees. We checked a lot of boxes. Good to see you, and welcome to Bloomberg TV and radio. With your homeland security hat on, I wonder if there's anything you can add to this remarkable story on the B-1 bombers. And if the U.K. is under this type of threat, is the U.S. homeland as well?
You know, it's a great question. I take issue with what Senator Warner just described as somehow malfeasance from the United States. The new world we are operating in is one where low-cost weaponry can inflict tremendous cost in terms of the damage it procures. We have seen this as an example. Ukraine sent $10,000 drones and bombed a fleet of Russian bombers to the tune of billions of dollars. That is the first problem. The second problem is there are people in Europe, just like there are people in the United States, from abroad who have exploited the open border policy -- that control. They are willing to do harm. They work for pariah states. You combine those realities, and the United States obviously has intel that is real-time that merited the swift action that it took to get those bombers off the base.
But to return to Joe's question about threats that could be posed to the homeland domestically, is there a real risk you have been briefed on about a threat happening here? The president yesterday was talking about having to go to war with Iran in the first place to make sure they could... naming specifically Los Angeles and San Diego that you could 'let them take'?
Of course, this is one of those things that has been an obvious consequence of deliberate action from the previous administration. When you have open borders, people will exploit that who want to harm the country. We have arrested thousands of terrorists. We have people who are international actors that are working on behalf of foreign governments inside the country right now. There are absolutely terror cells in the United States, and we are doing the lion's share of the work to prevent them from operating here. But it is very real from Europe, and it is something we have to be on guard against at all times. Are there specific threats here? Absolutely.
Do we know about specific terror cells in this country? Do we know who they are?
Well, I certainly hope so. This administration has done a good job identifying, rooting out, deporting, arresting, and fighting that threat. We do -- there are specific -- if not thousands of terrorists who have been apprehended who crossed into the country illegally. The threat that I see are the cells that we don't know about. We would be foolish to assume that we have gotten every single one of them. That is why it is imperative that local, state, federal law enforcement work together to ensure that these operators are stopped before they can carry out an attack on this country.
As we consider local and state issues, we are having a little bit of a difficulty with your connection, so I hope you can hear me. In North Carolina, in the statewide race for Senate, we are seeing Republican National Party and associated PACs like the Senate Leadership Fund pulling money out of Michael Whatley's coffers, or not committing as much money to him, as it looks like Roy Cooper is leading the polls by a decent margin in the state of North Carolina. What is going on interstate that makes this a difficult environment for a Republican like you, or a Republican like Whatley?
Well, I'll say this just to be sure that the message is clear -- there are still tens of millions of dollars that are being spent on behalf of Michael Whatley. Some of that has been pulled to go to other states where it is a very competitive environment. We will stipulate that, of course, midterm elections are very tough. Many of the problems we are trying to fix started before we took power. Whether we are talking about excessive regulations, the overhang of inflation, all of these things started years ago. If the complaint is we are not fixing it fast enough, I agree with that. We need to work faster, and we are working hard to fix it. Michael Whatley is running a good race. He is closing the gap. I expect it to close further as election day approaches. He is running against a two-term governor, two-term attorney general. Roy Cooper was elected before I was even born. He has a lot of name ID and is a tough candidate. But I think we are going to close this gap in a meaningful way as election day approaches.
Congressman, thanks for joining us on Bloomberg. Republican congressman representing North Carolina's 13th congressional district, Brad Knott, joining us on "Balance of Power." His district has been added to the target list for the Democratic Congressional Campaign Committee. Democrats who are looking to retake the House majority, people widening the map at which they think they have chances. His district is included.
Trump +21 in the eyes of DCCC. Here we are. The money you referred to being pulled out of North Carolina, it may be landing in South Carolina with fascinating -- the Senate Leadership Fund putting $5 million into this race, what they are calling an insurance policy to back Darline Graham, the late Senator Lindsey Graham's sister, who appears to be in a statistical tie with one month to go.
The Crystal Ball at the University of Virginia Center for Politics shifting this race from likely to lean Republican. Pretty remarkable. President Trump taking to Truth Social to defend Darline Graham, or perhaps more accurately, assail her opponent. We will get into that with our political panel.
Debate tonight in the state of Maine. Silly season, October surprises? We are ready for it all next on Bloomberg.
It's 1:21 on Wall Street. We check markets all day long on Bloomberg. S&P 500 climbing to a record, up 0.6%. Dow industrials up 0.4%. Nasdaq also trading at a record. Any gain for Nasdaq will be a new high, up 0.5%. Interestingly, as stocks rally, the Russell 2000 index is lower, down 0.5%. Two-year, 4.79%, 10-year, 5.27%, 30-year, 5.64%. Gold, 4160 the answer. West Texas Intermediate crude higher 0.2%. It spent much of the morning lower. Barrel of Brent up $100, 0.2%. Stocks are gaining on growing bets that corporate America will be able to weather the threat from still elevated energy costs and interest rates. Keeping an eye on McDonald's shares, down 0.2%. McDonald's plans to overhaul its restaurants and menu, sparking concerns among franchisees facing upgrades that will cost at least a thousand dollars per location. For on-demand news 24 hours a day, subscribe to "Bloomberg News Now" wherever you get your podcast. I am Charlie Pellett. That is a Bloomberg Business Flash.
Charlie, thank you. Suggesting that people really want to hang out at McDonald's, that is what I don't understand. Don't you go to the drive-through window like the rest of us? We consider the timing today, coming one month out from the midterm elections, it makes an easy headline. It is an opportunity to take out a little insurance, Kailey Leinz. The Senate Leadership Fund sending $5 million to South Carolina, bright red South Carolina, for Darline Graham. This is Axios reporting. The insurance policy is how the SLF put it, in a race that is statistically tied.
Keeping in mind that Darline Graham came to this game pretty late. She is relatively new to politics. It is the death of her brother Lindsey Graham that saw her name to replace him on an interim basis. She decided to run for reelection and survived the runoff in that. She is the candidate supported by President Trump. And yet it does not seem that many think this seat is 100% safely hers. The Crystal Ball has moved this seat in South Carolina, bright red as you say, from safe Republican to lean Republican. The Crystal Ball moving Alaska to lean Democratic, not great for Dan Sullivan. Rick Davis and Jeanne Sheehan Zaino are with us. Jeanne is a Democratic analyst and visiting fellow at Harvard Kennedy School -- Center, and Rick is a Republican strategist and a partner at Stonecourt Capital. You know the Grahams well in the state of South Carolina. Are you surprised to see money flowing in on Darline Graham's behalf and the race changed to not fully safe?
You would expect it to be coming home to the Republican, and seeing the margins go up, not down. This is inverse to what you would typically expect to see. Her brother, Lindsey Graham, used to have tens of millions of dollars spent on his re-elections, and he would win by wide margins even when the polls are closed a little bit, and they would buy now start moving back up. This is counter to what we expect to see in a place like South Carolina. It is a warning sign, and the Senate Leadership has done a smart job of taking out some insurance, $5 million worth, and I suspect it is not the last time they invest in South Carolina.
Jeanne, we always ask about taxes. Would it be different if John Cornyn had been the nominee? Would it be different if Ralph Norman was running against Annie Andrews? How much does the candidate have to do with it?
The candidate has an awful lot to do with it. They plowed in $800,000 just to get Darline Graham through the primary, or the run-up to the primary. She in that process went into a debate and said she doesn't really know about basic questions about foreign policy. She was put in there by most people's expectation to be a seat warmer, when, just like we are seeing in Texas, to your point, Joe, Donald Trump put his thumb on it and said she should be the nominee, and she decided to run. This is what you get -- we talked about putting on was $900,000 in a Republican primary in South Carolina. I'm surprised they are not plowing more than five million at this point. Donald Trump is not doing her any favors when he is going on repeatedly using transphobic slurs to describe her opponent, Dr. Annie Andrews, who is keeping this race in a very red state within the margin of error, to her credit.
