Cooling war talk

Midterms rout has eased the US talk of war in Iran ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

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Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up here. Only days ago, Donald Trump and Israel seemed primed for another all-out attack on Iran. But after the rout the Republican party suffered in the midterms, the president appears to be caving to pressure to cancel any such plans and opt for a diplomatic resolution. Tuesday’s election laid bare just how much Americans are against the war. The fighting was meant to last weeks, with Trump and Israeli Prime Minister Benjamin Netanyahu relishing the prospect of toppling the Islamic Republic’s leadership. But the conflict is now in its ninth month and deadlocked. Energy prices have soared, while US stocks of interceptor missiles are depleted. A poster highlighting high prices in Dallas, Texas, on Nov. 2. Photographer: Ricardo Arduengo/AFP/Getty Images Iran’s leaders are still firmly in power — despite a naval blockade that’s squeezing the economy — and attacking ships in the Strait of Hormuz. They’ve warned of a “nightmare” if Trump orders mass strikes again. The Houthis in Yemen, part of Tehran’s axis of resistance, are firing at Saudi Arabian cities every day. Vice President JD Vance acknowledged the war’s impact on voting, going so far as to say it was “the reason we lost,” suggesting a change in strategy. He also cited the need to change the US relationship with Israel, which together with Washington started the conflict in February. Oil sank soon after Vance’s comments, with Brent crude tumbling to below $100 a barrel. A banner with Iran’s Supreme Leader Mojtaba Khamenei flanked by his predecessors in Tehran on Oct. 21. Photographer: Atta Kenare/AFP/Getty Images It’s still up more than 50% this year. But many traders now believe the election losses will chasten Trump and curb whatever remaining desire he and Netanyahu — for whom the midterms were a serious blow — have for escalation. Iranians and Gulf Arab states are still on edge. Trump might push ahead with strikes regardless. Iran, emboldened, may yet demand a deal the US cannot accept. Yet, right now, the drumbeat of war is softening — and the Middle East is digesting what looks like a new era in US relations. — Paul Wallace Global Must Reads The Republicans’ generational collapse in the midterm elections ushered in a wave of finger-pointing largely aimed at the Oval Office, exposing deep fissures within the party and opening the door for 2028 presidential hopefuls to hone their message. Elon Musk, the crypto industry and AI backers poured hundreds of millions of dollars into key races but came up short in the face of voters’ frustration over the economy. Vance at a campaign rally in Tyler, Texas, on Oct. 13. Photographer: Saul Loeb/Getty Images via Getty Images North America Ukraine and its European allies discussed the country’s economic recovery and funding requirements for its war effort during talks with US officials, ahead of next week’s American-led negotiations with Russia in Abu Dhabi. Moscow’s push to curtail reliance on Western drugmakers is foundering, and with sanctions-exempt foreign medicines still sucking billions from the strained state budget, a strategic vulnerability that President Vladimir Putin is seeking to address. France is bracing for fresh strikes and demonstrations called by labor unions over high living costs, extending more than a month of protests as parliamentary talks over next year’s budget remain deadlocked. With just six months to go before elections, the political backdrop is hardly conducive to compromise, and outgoing President Emmanuel Macron’s critics are seeking to capitalize on the public anger. The United Nations COP31 climate summit starting next week in Turkey might count as a success if there is a commitment from all countries attending to significantly boost the electrification of their economies, according to the event’s head of negotiations. Ireland meanwhile proposed that European Union member states delay by a year methane rules for oil and natural-gas importers to safeguard energy security and allay concerns over rising prices. On this week’s episode of Zero, Akshat Rathi speaks with Chris Bowen, Australia’s minister for climate change and energy and the president of negotiations at the COP summit. A Hong Kong court sentenced prominent pro-democracy activist Joshua Wong to a decade in prison for his second national-security conviction, extending his incarceration just two months before he was due to be freed. The term is among the heaviest meted out under the Beijing-imposed security law, surpassed only by former media tycoon Jimmy Lai’s 20-year sentence. Airlines were forced to divert more flights carrying passengers across Europe today because of bomb threats, following a series of warnings that disrupted several carriers earlier this week. Morocco’s King Mohammed VI ordered authorities to help speed the withdrawal of UN troops from the disputed Western Sahara region after a diplomatic standoff between the US and Russia stalled the renewal of the 35-year-old peacekeeping mission. Wind turbines in Dakhla, Western Sahara, in May. Photographer: Abdel Majid Bziouat/AFP/Getty Images South Africa’s biggest political party, the African National Congress, appears to have hemorrhaged support in yesterday’s municipal elections, making coalitions more likely across cities and towns. Bolivia’s Supreme Court President Romer Saucedo says he fled abroad after receiving threats, while prosecutors contend he faces at least two criminal investigations and are seeking an international alert for his capture. Sign up for the Washington Edition newsletter for news from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day Hong Kong’s jewelry and watch sales have surged to their highest level since 2019 despite China’s broader luxury slowdown, as the rich turn to gold and gemstones to preserve wealth after Beijing tightened its grip over their offshore investments. The shopping spree underscores how Chinese consumers are prioritizing wealth preservation over growth, and how gold and precious stones have emerged as rare safe havens. And Finally Voters in dozens of towns across the US sent a clear message against data centers in Tuesday’s elections — with one notable exception. In Harwood, North Dakota, residents blocked a measure aimed at slowing industrial developments like the facilities that support the AI rollout, allowing them to proceed and contribute to tax coffers. Still, data-center developers across the US are now grappling with a worst-case scenario of possible new restrictions on their business after the vote. A protest against AI and data centers in Seattle, Washington, on Oct. 27. Photographer: David Ryder/Bloomberg More from Bloomberg Check out our Bloomberg Investigates film series about untold stories and unraveled mysteries Next China for dispatches from Beijing on where China stands now — and where it’s going next Next Africa, a daily newsletter on where the continent stands now — and where it’s headed Economics Daily for what the changing landscape means for policymakers, investors and you Green Daily for how climate change is shaping energy, investing, business and technology Get Next Japan for an inside view of the forces reshaping Japan, and what’s next for its businesses, markets and consumers Explore more newsletters at Bloomberg.com We’re improving your newsletter experience and we’d love your feedback. 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