Good morning. Andrew here. Breaking: Xi Jinping, China’s leader, warned President Trump that the issue of Taiwan could lead to conflict and “an extremely dangerous situation” — at the same time that top American C.E.O.s are seeking deals in Beijing during the presidential visit. We’re going deep today on a fascinating turn in Los Angeles: Some big-money donors are lining up behind Spencer Pratt, the former reality-television star seeking to become mayor, as his campaign gains traction on social media. What does this say about the future of the city and politics? More below. (Was this newsletter forwarded to you? Sign up here.)
The reality-TV candidate some C.E.O.s are backingUntil recently, Spencer Pratt was best known as the villain of “The Hills,” the aughts-era reality-TV show. He later lost much of his fortune and, last year, he also lost his home in the Palisades wildfire. Unexpectedly, he became a Republican candidate for Los Angeles mayor, driven, he has said, by the city’s “negligence” in the fire’s aftermath. More improbably, he’s surging in the polls before the June 2 election — and drawing millions of dollars from business leaders, DealBook reports. Pratt is assembling a who’s who of financial backers, some of whom have said they’re dissatisfied with how Mayor Karen Bass has handled the disaster and the city more broadly. His message of reducing bureaucracy and making the city friendlier to companies has also drawn support from corporate leaders around the country. And Pratt has gained attention with his campaign’s embrace of A.I.-generated social media videos. Here are some of the notable donors who have given to the Pratt campaign since May 1, according to campaign filings:
DealBook understands that Nicole Avant also plans to support Pratt. She is a producer and Democratic fund-raiser and the wife of Ted Sarandos, a C.E.O. of Netflix. Several donors and potential backers whom DealBook has spoken with pointed to Pratt’s widely praised performance in a mayoral debate last week as the moment when he earned their support. Pratt has been gaining in the polls, too. One released yesterday by Emerson College showed him at 22 percent among voters, up sharply from 10 percent in March. (Bass remains in the lead with 30 percent, also up from March; Nithya Raman, an L.A. city councilwoman who’s running on the left, was at 19 percent, up from 9 percent in March.) Though Bass still has the highest odds on the prediction market Kalshi, at 54 percent, Pratt’s 27 percent odds are up from 8 percent in late February. (Some Pratt supporters point to Mayor Zohran Mamdani, who trailed Andrew Cuomo in the Kalshi market for New York City’s Democratic primary for months — but then rapidly surged to the lead the day before the election in June.) Some political analysts caution that Pratt still faces steep odds. The last time a Republican became L.A. mayor was in 1997, Isaac Hale, a politics professor at Occidental College, told DealBook. And the Bass campaign has noted that money doesn’t necessarily win elections: In 2022, she defeated the real estate billionaire Rick Caruso, who spent over $100 million on his campaign.
Cerebras, a maker of artificial intelligence chips, surpasses expectations for its I.P.O. The company priced its initial public offering at $185 a share, well above a forecast range of $150 to $160 apiece; that will raise at least $5.5 billion and value the company at $56.4 billion. That almost didn’t happen: The processor designer Arm and its main backer, SoftBank, sought to buy the company before it filed for an I.P.O., according to Bloomberg. Honda reports its first-ever annual loss. The Japanese automaker said it had lost $2.7 billion in the fiscal year ended March 31, the first time that has happened since it became a public company seven decades ago. Honda chalked it up to more than $9 billion in restructuring charges and write-downs after it revamped its electric vehicle strategy amid cooling consumer demand. Ken Griffin, the Citadel C.E.O., reportedly rebuffs Mayor Zohran Mamdani. The mayor reached out to Griffin via intermediaries after Mamdani called him out by name in a social media post pushing for a so-called pied-à-terre tax, according to NBC News. But Griffin has ignored the outreach, with NBC News reporting that he may be waiting for a public apology.
The latest from BeijingDetails are trickling in from Beijing, where President Trump and Xi Jinping, China’s leader, just held face-to-face talks. Business leaders who made the trip say they’re hearing encouraging signs about China’s future ties with the West. But those hoping for an end to the trade war may have to wait. The latest: Both leaders promised more economic cooperation, in remarks laced with a threat. Xi said that the U.S. and China should avoid the “Thucydides Trap” of clashing superpowers and gave Trump a blunt warning over Taiwan, a close U.S. ally and major provider of advanced semiconductors. The White House said Trump and Xi discussed more access to the Chinese market for U.S. companies, a huge priority for Jensen Huang of Nvidia, Elon Musk and the other C.E.O.s. who made the trip with Trump. Xi told the business leaders that China’s market “will only open wider and wider,” Chinese state media reported. The U.S. also agreed to let Nvidia sell its not-quite-top-of-line H200 chips to 10 Chinese companies, Reuters reports, citing unnamed sources. That would be a win for Huang. But the U.S. and China still have disagreements on other areas of technology and artificial intelligence. Trump and Xi also discussed the possibility that China would invest more in the U.S., a major goal for Trump. China said it would resume buying more U.S. beef through late 2029, a time frame that is shorter than those of previous deals. That said, beef prices are already soaring in the U.S., and the administration has reportedly weighed efforts to increase imports to give domestic consumers some relief. Iran, a major Chinese trade partner, came up, too. A White House statement about the Trump-Xi meeting said that the two sides had agreed that the Strait of Hormuz “must remain open to support the free flow of energy.” It was unclear if Trump persuaded Xi to play a more active role in brokering a peace deal. There was more hope for progress on the so-called Five B’s, which would involve China’s agreeing to purchase more Boeing aircrafts and soybeans as well as the establishment of a Board of Trade by Washington and Beijing. There is some optimism that those deals can be reached, Ana Swanson of The Times reported. What’s still unknown: Hopes for a major breakthrough on trade were slipping before the summit, especially regarding thorny issues like whether the U.S. would further ease export controls on advanced processors and whether China would return the favor on rare earths. But there will be another round of talks: Trump has invited Xi to a White House visit in September. Tremors in the Treasury marketThe S&P 500 is back in record territory thanks to the artificial intelligence rally. But it’s a different story in the bond market, where a slump risks inflicting further economic pain — and heaping pressure onto President Trump. Sovereign bonds in many of the world’s biggest economies have underperformed stocks this year. In the U.S., that decline has accelerated since the war with Iran reignited inflation, rekindling worries that the Fed won’t lower interest rates anytime soon. Watch the yield on the 10-year Treasury note, which underpins mortgages and other commercial loans. It hit 4.47 percent, a 10-month high, after new Producer Price Index data yesterday showed wholesale prices climbing at their fastest monthly pace since March 2022. A lackluster auction yesterday for 30-year Treasury bonds added to investor unease.
Could bond traders force the White House to change tack on Iran? Turbulence in the sovereign debt market played a role last April when Trump temporarily paused many of his tariffs. The 10-Year Treasury’s yield hit a high of 4.48 percent two days later and then eased. But reaching a peace deal with Iran — one that reopens the Strait of Hormuz — is a complicated diplomatic undertaking. The prospects don’t look great. Treasury yields lately have correlated with oil prices. Both have soared since the start of the war; analysts warn that bond yields could climb further if the war drags on. That could put Kevin Warsh in a bind. The Senate yesterday confirmed his nomination as Fed chair. Trump has said he expects a Warsh-led Fed to lower interest rates soon. But policymakers at the central bank, concerned about rising inflation, appear inclined to stand pat. That could revive Trump’s irritation with the Fed.
DEALBOOK QUIZ The art market roars backThis question comes from a recent Times article. Click an answer to see if you’re right. (The link will be free.) The spring auction season kicks off today, and the buzz in the New York art world is that it will be a blockbuster. After a few relatively lean years, the big auction houses have a larger inventory of expensive works to sell, including paintings by marquee artists like Jackson Pollock and Mark Rothko. How much in art sales are the auction houses Christie’s, Sotheby’s and Phillips aiming to generate over the next week? We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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