News when you want it with Bloomberg News now.

I'm Nathan Hager and I'm Karen Moscow. Karen, the cease fire between the US and

Iran once again looks fragile this morning.

Overnight, the U.S. struck Iranian vessels in the Strait of

Hormuz and other targets. And Iran's semi-official Tasnim news

agency says the Islamic Revolutionary Guard Corps shot down a U.S.

drone and fired at an American fighter jet in Iranian airspace.

All this hours after President Trump suggested on social media that talks to

extend the truce and reopen the strait were, in his words, proceeding nicely.

Secretary of State Marco Rubio addressed the situation during his trip to India.

The president is not going to make a bad deal.

He's just not this. This issue.

No one has done more, and no one has been more serious about the threat of a

nuclear Iran than President Trump has been a secretary of state.

Marco Rubio, speaking to reporters in New Delhi.

We get more from Bloomberg's Paul Wallace in Dubai.

We've had Marco Rubio this morning since those strikes.

Again, talking of progress. He's saying that the US and Iran are

still inching towards a deal. He says it's going to take a few more

days in all likelihood, but there's no guarantee they can get over the line.

There's still a lot of details they have to work out.

And Bloomberg's Paul Walsh reports Iran's supreme leader is raising the

pressure as well. In a written statement, Mojtaba Khamenei

warns that the Middle East will no longer be a shield for American bases.

Well, Nathan Israel is carrying out new attacks as well.

Lebanon's state run news agency reports an Israeli airstrike killed 12 people in

a village in the Baca Valley of eastern Lebanon.

Israeli Prime Minister Benjamin Netanyahu has authorized more intensive

strikes targeting the Iran backed Hezbollah militant group.

The Israeli military is not commenting on this specific attack, but says it is

targeting Hezbollah infrastructure in eastern Lebanon.

And there are new developments this morning.

And in the Russia-Ukraine war, Russian Foreign Minister Sergei Lavrov has

called Secretary of State Marco Rubio advising him to evacuate U.S.

citizens and diplomats from Kiev. Tony Halpin leads Bloomberg's Russian

economy and government team. Russia is signaling eight stepping up

attacks because the war isn't going very well for Vladimir Putin.

The front line is not really moving in Russia's favor, despite the spring

arrival of better weather that would signal an intensification of Russia's

offensive. Ukraine has managed to blunt that, and

in some areas it's even managed to push Russia back a little bit.

Ukraine is embarrassing President Putin by continuing a very wide level of

strikes in Russia, using drones, attacking refineries and factories.

And last weekend there was a very large scale attack in Moscow itself, which

brought a lot of criticism from Muscovites that their government wasn't

really defending them. And this war is going very badly from

their point of view. And why is it still going on?

Bloomberg's Tony Halperin says more than 16 months of diplomacy from the Trump

administration have failed to reach a breakthrough between the two sides.

Well, turning to domestic politics. Nathan, this is a big day in the race

for control of the Senate in November. Republicans in Texas are headed to the

polls to end a bitter and drawn out a runoff election between four term

incumbent John Cornyn and state Attorney General Ken Paxton, who picked up

President Trump's endorsement just last week.

Cornyn says he still has what it takes to win.

Well, I think I can help, um, maintain this Senate seat in Republican hands.

I won in 2020 by ten points. Ken Paxton, as you know, is a flawed

candidate. He's got scandal that follows him

everywhere. And Republican Senator John Cornyn

appeared on Fox News. Paxton settled state securities fraud

charges in 2015 and was impeached and acquitted in 2023, and his wife filed

for divorce during his Senate campaign. Cornyn beat Paxton by about one

percentage point in the March primary, but neither reached the 50% to win the

nomination. Whoever wins tonight will face Democrat

James Talarico in November. Uh, Karen, let's turn now to the world

of sports. New York Knicks fans are partying like

it's 1999 this morning. For more, let's bring in Bloomberg

sports reporter John Stache. Good morning.

Good morning Nathan. Since that year, those fans have endured

some very bad. And teams will.

Now they've got a very good one. A team that keeps winning by a lopsided

scores. When game four in Cleveland ended the

Knicks one by 37 after a second straight series sweep, Knicks will bring an 11

game winning streak to the finals, which will begin a week from tomorrow.

John Station, Bloomberg radio. All right, John, thank you.

We turn to the markets now where futures are higher as they begin the holiday

shortened trading week, the Dow Jones Industrial Average at a record high.

The S&P 500 coming off eight straight weekly gains.

And Karen Kevin Warsh is beginning his first full week as chairman of the

Federal Reserve. Bloomberg's John Tucker joins us with

more on the new Warsh era John. And he's got his work cut out for him.

Nathan. With President Trump dead set on lower

rates, bond investors are betting Warsh will focus on fighting inflation.

And that pretty much rules out a rate cut.

Naveen Segal is with Blackrock. The market's expecting a hike.

Um, I think, you know, some of the tailwinds in the US economy certainly

suggest a strong economy. There's a high CapEx.

A Warsh assumes leadership is a growing number of other fed officials abandon

their easing bias with a grand war, unleashing the biggest inflation surge

since 2023. Traders are pricing in the fed is

virtually certain to start raising rates by December.

A two year Treasury yields, the most sensitive to fed policy expectations,

climbed to as much as 4.14% Friday. That's the highest in more than a year,

although this morning treasuries are catching a bit.

In New York, I'm John Tucker Bloomberg Radio.

Thanks, John. And that's news when you want it with

Bloomberg News now. I'm Karen Moscow, I'm Nathan Hager and

this is Bloomberg.