Situation Briefing

CRIT US-Iran ceasefire collapses as Trump calls deal 'over'

Trump told reporters in Ankara that the ceasefire he signed with Iran three weeks ago is finished: "I think it's over. I don't want to deal with them anymore. They're scum." The trigger was a tit-for-tat sequence — Iran struck three commercial vessels in or near the Strait of Hormuz on Tuesday, prompting the US-led Joint Maritime Information Center to raise its threat assessment to "severe," and the US retaliated with strikes on more than 80 Iranian targets. Per Axios, the strikes hit air defenses, missile depots, and drone launch sites; CNN reported one strike hit a school on outdated intelligence. Iran's IRGC claims it struck 85 US military facilities in Bahrain and Kuwait, and France24 reports Tehran also targeted Gulf states directly.

The US Treasury withdrew the waiver that had let Iran sell oil, and Trump ruled out further negotiation. TASS quoted a senior Iranian defense official warning US servicemen would "face hell" if they land on Iran's coast. China called on both sides to abide by the memorandum of understanding, and US Gulf allies are pressing to prevent further escalation. Only Sunday, VP JD Vance had been in Switzerland for talks with an Iranian delegation to clarify terms for a permanent end to the war.

Why it matters: This is the highest-consequence story of the day by an order of magnitude. The February strikes that opened the war killed Supreme Leader Khamenei; the interim truce was the only thing keeping Hormuz open and oil off boil. Its collapse re-arms an oil-price shock, re-exposes US forces across the Gulf, and does so with Iran's succession unresolved — designated successor Mojtaba Khamenei has not appeared publicly since his March appointment, reportedly wounded in the strike that killed his father. A leaderless, cornered Iran is a less predictable adversary, not a safer one.

HIGH Khamenei's funeral reaches Iraq's holy cities as war reignites

Iran is midway through a six-day funeral for Ayatollah Ali Khamenei that began July 4 and ends July 9. His coffin passed through tens of thousands of mourners in Najaf today, with funeral rites also held in other Shiite cities in Iraq before a final burial in Mashhad, Iran's holiest city. Tehran's mayor had projected attendance as high as 20 million, which would make it among the largest gatherings in the country's history.

Why it matters: The choreography is meant to project strength and continuity, but the timing exposes the opposite. The regime is burying the man who defined it for 35 years while simultaneously absorbing fresh US strikes and unable to produce its new leader in public. The funeral's spillover into Iraqi shrine cities also drags Iraq's fragile politics deeper into the confrontation. Watch whether Mojtaba Khamenei appears at the Mashhad burial — his absence would be the loudest signal yet of a succession in trouble.

CRIT Trump torches the NATO summit — Spain trade cutoff, Greenland revived

The Ankara summit became a venue for Trump's grievances rather than alliance business. He said he had ordered Treasury Secretary Scott Bessent to "cut off all trade" with Spain — the only NATO member not committing to 5% of GDP on defense by 2035 — branding Madrid a "terrible partner" and a "wasted cause." Spain notes it already spends 2% of GDP and ranks seventh among NATO's 32 members; Prime Minister Sánchez said he is "not worried." Trump also reopened his push to take over Greenland ("Stupidly, we gave it back"), prompting Denmark's Frederiksen to insist "Greenland is not for sale" and vow to defend "every inch" of NATO territory.

Secretary General Mark Rutte took the opposite tack, praising Trump, calling the Iran strikes "absolutely necessary," and telling reporters "Trump was right." Trump softened on Italy's Meloni after their G7 spat, calling her a "nice person" even while complaining Italy is "doing very poorly on bases." Per Bloomberg, NATO is quietly weighing skipping the 2027 summit altogether to avoid friction with Washington. On the sidelines, some $50 billion in deals were reportedly signed, and the UK and Turkey inked a security pact.

Why it matters: Trump is running alliance policy as a protection racket: pay 5%, or lose trade access and territorial guarantees. Threatening to sever trade with a fellow member over defense spending has no precedent in the alliance's 77 years, and floating annexation of another member's territory (Greenland) corrodes Article 5's credibility from the inside. Europe's response — new North Atlantic and Arctic naval missions, Hungary pledging 5% by 2035, Spain floating €850bn/year in common EU borrowing — shows allies now hedging against the US, not just Russia.

HIGH Seoul's KOSPI crashes 5.4%, triggers circuit breaker as AI-chip rout deepens

South Korea's KOSPI plunged 5.4% and the exchange issued a sell-side sidecar (a program-trade circuit breaker) as the selloff in AI memory names accelerated. The FT reported the index falling into a bear market; Asia Times called it a regional "AI meltdown alert." Samsung Electronics and SK Hynix — which per CNBC now make up roughly half of the KOSPI's total weight, up from about a quarter at the end of last year — have led a multi-session rout that at one recent point saw the index drop more than 8% with SK Hynix off nearly 15% in a single day.

Why it matters: This is the clearest transmission of AI-valuation anxiety from Wall Street into a real economy. Korea's index has become a leveraged bet on two memory makers, so a US Nasdaq wobble now detonates in Seoul. Yet the operational signal cuts the other way: SK Hynix CEO Kwak Noh-jung reaffirmed a 100 trillion won ($64bn) domestic investment plan with the M17 fab breaking ground next year. The gap between crashing equity prices and rising capex commitments is the tension to track — one of them is wrong.

HIGH Russia batters Ukraine's cities during the summit

As NATO leaders met, Russia struck Kyiv, Kharkiv, Kherson, and Mykolaiv overnight. A high-rise in Kharkiv was hit, with the death toll climbing to two and about 20 injured; Ukrinform reported additional casualties in Kherson and Mykolaiv. Ukraine hit back deep inside Russia — Special Operations Forces struck two refineries in Tatarstan and a refinery in Saratov (now on fire), Unmanned Systems Forces hit nine more shadow-fleet tankers in a single operation, and drones damaged Gazprom's Blue Stream station. Sweden is sending 32 Gripen fighters and South Korea pledged $100 million in aid.

Why it matters: The strikes are a message aimed at the summit: Moscow is escalating precisely when the alliance is fractured and distracted by Iran. Ukraine's refinery-and-tanker campaign is biting — the BBC reports Russian fuel shortages, and TASS notes European private jet operators may run short of fuel this summer. Zelenskyy, meeting Trump on the sidelines, renewed demands for air defenses and argued Ukraine is "not a NATO liability but an asset." Whether Trump's transactional mood extends to Kyiv is the open question.

MOD Europe braces for a third heatwave as seas hit record temperatures

A third heatwave is bearing down on Europe, with the WHO warning of "more lethal weeks ahead," per ANSA. The Guardian reports UK waters in an extreme marine heatwave as global sea-surface temperatures set records, and wildfires are burning across southern France. A separate Guardian analysis notes European countries top a climate-progress scorecard while the US has slipped to 27th. The BBC published seven charts documenting how far Europe's climate has shifted.

Why it matters: Heat is now a recurring summer emergency for Europe, not an anomaly, with direct mortality, wildfire, and infrastructure costs. Record sea temperatures matter beyond the beach — they load the atmosphere for more violent storms and disrupt fisheries (Japan's bluefin tuna boom, per SCMP, is one downstream signal). The US falling to 27th on climate progress as Europe leads reframes the transatlantic split visible at the NATO summit in environmental terms.

MOD Apple loses EU challenge over App Store rules

The EU's General Court rejected Apple's challenge to Digital Markets Act rules curbing its App Store practices, handing Brussels a win in its Big Tech enforcement drive. Separately, the FT reports Apple has agreed to buy $30 billion of US-made chips from Broadcom — a supply-chain reshoring move that lands the same day the AI-chip complex is selling off in Asia.

Why it matters: The ruling cements the DMA as an enforceable constraint on the largest platforms, not a symbolic one, and strengthens Brussels' hand as it faces down US pressure elsewhere (including Trump's trade threats). The Broadcom deal is the more market-relevant signal: Apple locking in domestic chip supply at scale is exactly the kind of demand commitment that sits awkwardly against equity markets pricing an AI slowdown.

LOW Marine Le Pen launches presidential run despite embezzlement conviction

Marine Le Pen confirmed she will run for the French presidency despite her embezzlement conviction, which Le Monde and France24 characterize as a comparatively lenient ruling that leaves her eligible. Her return sidelines her protégé Jordan Bardella; the NYT asks whether the two can join forces rather than split the far-right vote.

Why it matters: Le Pen's survival of a conviction that many assumed would end her career resets the 2027 French race and, with it, the trajectory of the EU's second-largest economy. A National Rally presidency would compound the fragmentation on display at Ankara — a France less committed to Ukraine and to EU cohesion, arriving just as Europe tries to hedge against an unreliable Washington.

AI-valuation anxiety jumps from Wall Street to Asia

The day's market action wasn't about oil alone. Seoul's 5.4% drop, the FT's bear-market call, Nikkei's report that Temasek is nonetheless raising AI exposure 2.5-fold over five years, the FT's "BoE vs AI exuberance," and Euronews flagging AI as a key H2-2026 economic risk all point one direction: investors are re-rating the AI trade at once, and the most concentrated markets (Korea, where two chipmakers are half the index) break first. The contradiction is that the operators keep spending — SK Hynix's $64bn plan, Apple's $30bn Broadcom order, MiTAC and Wistron guiding to strong AI-server demand. Prices are pricing a bust; capex is pricing a boom.

Alliances as transactions

Trump's Ankara performance — trade cutoff for Spain, annexation talk on Greenland, a trade threat against "terrible ally" Spain, softened flattery for Meloni — treats security guarantees as leverage to be priced and withdrawn. Allies are responding in kind: Europe standing up its own North Atlantic and Arctic naval missions, Hungary racing to 5%, South Korea's Lee working the summit for warship-building and Ukraine deals independent of Washington, and NATO reportedly considering skipping 2027 to avoid Trump entirely. The alliance is being hollowed from within faster than any external adversary could manage.

The oil weapon is back on the table

Three weeks of truce briefly returned crude toward pre-war levels. Tuesday's tanker attacks in Hormuz, the US waiver withdrawal, and today's strikes reversed that in hours. With roughly 20% of seaborne oil moving through the strait and the Joint Maritime Information Center now rating the threat "severe," the price of the entire global economy is once again hostage to a 21-mile-wide channel — and to whether a grieving, leaderless Iran decides restraint still serves it.