Global markets reckon with the prospect of prolonged conflict in the Middle East and rising inflation.

Plus hotel chain Melia pulls out of Cuba in a blow to the island's vital tourism sector,

and Europe arms up with its own homegrown defense technologies to counter U.S. dependence. There are still some things that the U.S. is way ahead of it. And we've seen that in the clamor for Patriot missiles. Europe's just not there. But that's also a perfect example of where it's trying. You have the European system, the Sampi, coming up with a new upgrade. And then you have numerous smaller companies who are coming up

with their own systems.

It's Friday, July 24th.

I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News,

the top headlines and business stories moving your world today.

It's been roughly two weeks now since the reignition of the Iran war and markets aren't having it.

With global stock indices already dealing with their own AI spending-related issues,

oil prices have now come roaring back, returning inflation to the spotlight and stoking a government

bond sell-off that sent U.S. government borrowing costs to the highest level of Trump's second

term. And those concerns are even more pronounced in Asia, where I'm joined now by journal editor

Peter Landers. Peter, in the U.S., we've seen 10-year T-note yields moving higher.

Something similar is occurring in Asia as well, where inflation worries have been more pronounced since the start of the war almost five months ago, right?

Right. There are plenty of reasons to be worried about inflation in Asia.

Countries like Japan, South Korea, and others import oil and natural gas from the Middle East. And so if the war is prolonged, that would bring prices up. And a lot of products depend on oil. Japan has been

worried about naphtha and other petrochemicals that are made ultimately from crude oil. And there

was even the famous case of the potato chip bag

that the company made black and white

instead of color claiming that they would save a little bit of money

on the material costs of producing a color potato chip bag.

It just shows the way the concerns about higher costs

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