Flights Grounded Across the U.S.

What's driving the grocery prices that are straining Americans' finances, and why those are going to stick around? While these freight costs react immediately to the price of diesel, the peak of the impact won't really hit grocery shelves until 12 to 18 months down the line. Plus, Treasury Secretary Scott Bessent turns up the heat on commerce as Howard Lutnik, and the FAA holds flights across the U.S. after communication outages at air traffic control facilities. It's Friday, November 13th. I'm Alex Oceola for the Wall Street Journal. This is the PM edition of What's News, the top headline and business stories that move the world today. This just didn't shortly before we published, the FAA has stopped all departing U.S. flights for "reasons of safety." Transportation Secretary Sean Duffy wrote on X that there had been a communication issue impacting air route traffic control centers, and that FAA technicians are investigating the issue. An FAA spokeswoman said that planes already in the air can keep flying to their destinations. Meanwhile, on social media, travelers were reporting that taxying planes were turned around, and that passengers were de-plaining. Flight crews signal that the delays could last hours. Hulting all departures across the country is a pretty unusual step. The last time this happened was in 2023, when there was an outage of the FAA's notice to airman system, which provides critical information to pilots. For more on this developing story, visit WSJ.com. Separately, an update on the Microsoft outage. The company said this afternoon that it was seeing a "broad recovery" of its systems. Hundreds of thousands of users across the world reported issues with outlook and teams starting yesterday afternoon, disrupting governments, schools, and businesses. Microsoft says the outage came from a technical issue that wasn't related to cyber attacks or AI agents. With no access to email, users took to social media to express their frustration, and, occasionally, they're delight. Well, it's Friday the 13th and outlook is still down. And everybody's freaking out! I wonder if at Microsoft, they've thought to unplug it, wait 10 seconds, and then plug it back in. It's usually what tech support tells me to do when I'm having issues. I'm flabbergasted. Outlook, come back! Microsoft said some users might still have issues, as the company works to fully restore its services. At the Fed, Kevin Worsh is making his mark by cutting the number of interest rate decisions the Central Bank makes each year. While this year had eight of those votes scheduled, next year will have seven. Then in 2028, there will be just six interest rate decisions. Worsh has long argued that Central Bankers talk too much and overemphasize the most recent piece of economic data, and that fewer meetings would help offset that. So what does that mean for investors? Those interest rate decisions are major market movers. Having fewer of them could mean that the Fed will make bigger cuts or hikes each time than they would have, and make each decision an even bigger event. The Nvidia drama is still clouding the outlook for the AI trade. Stock slumped with chip and data center stocks selling off, Nvidia dropped another 2% today, closing down almost 13% for the week. It lost more than half a trillion dollars in market cap this week, its largest weekly decline ever. For today, the NASDAQ dropped 0.9% while the S&P slipped 0.4%. The Dow closed slightly higher. Meanwhile, bond markets sold off, as investors expected more interest rate hikes from the Federal Reserve. The benchmark 10-year yield rose to more than 5.15%, up nearly 0.3% in a week. Cost of living has been top of mind for many Americans, and nowhere are they feeling it more strongly than at the grocery store. Last month, food costs rose at the fastest rate in 6 months, and things may get worse before they get better. WSJ economics reporter Ian Hodgson is here to discuss. Ian, one major reason food prices are rising is because the Iran War is driving fuel costs. How do high fuel prices actually affect how much food costs? How was that passed through? Diesel costs affect food prices at just about every point along the supply chain, right? Think of farmers using diesel to power their tractors, taking that food to distribution centers, getting it to your local grocery store. Every point along that process requires diesel fuel, which has been at historic highs over the last few months. And the biggest issues are coming in among fresh fruit and produce. These need to be picked quickly at a specific time of the year. They need to be refrigerated as they move, and they need to get on to consumer shelves as quickly as possible. They're really the most exposed to these price shocks. You mentioned in your story that food costs are likely to get even higher in the near future. What's going on there? That's right. As fuel prices increase, transportation costs go up, and while these freight costs react immediately to the price of diesel, the peak of the impact won't really hit grocery shelves until 12 to 18 months down the line. And in the fresh fruit and produce markets, I mean, these wholesalers are already dealing with razor thin margins, which means that when their prices increase, they really have very little room before they have to pass those prices onto consumers. That's one, the midterms, in large part because of promises to lower the cost of living, given how sort of enmeshed some of these issues are that are driving up prices, what can politicians actually do about these issues? I mean, that's a good question, and I'm not sure we have a great answer to experts it doesn't look like diesel prices are going to come down anytime soon. So as this pressure mounts and mounts on the supply chain, food prices really are only going to go up from here. Are you starting to hear from consumers who are shifting what they're buying in order to be able to put food on the table without bankrupting themselves? We have seen consumers substitute lower price goods and move to lower cost retailers. The share of consumers among higher income households going to Walmart and Dollar General has spiked in recent months. Consumers can pivot away from buying berries to another fruit, but there's really no substitute that you can make at the grocery store when diesel prices are pushing the cost of all food categories up at the same time. Baries are not optional for people who have toddlers, but generally your question. That was WSJ economics reporter Ian Hodgson. Thanks Ian. Thank you. Coming up, why a visit to the vet is leaving more humans with their claws out that story and more after the break. In Washington, the Trump administration is making it clear that their scrutiny of Nvidia isn't over after Gents and Wong stepped down. Speaking today on CNBC, Treasury Secretary Scott Bessent said Nvidia should be held accountable if Megaspeed International was funneling Nvidia chips to China. Megaspeed is the Singapore-based company where Gents and Wong's romantic interest Alice Wong was an executive. The story has been thus far on Gents and Wong's personal foibles. The real story here should be did Nvidia know their client? And was there a robust effort at Nvidia to make sure that there was no leakage? Bessent is also ramping up the pressure against Commerce Secretary Howard Lutnik, telling CNBC that it's the Commerce Department that's responsible for failing to place restrictions on Megaspeed. Treasury, war, USTR and state, they were in favor of putting Megaspeed on the entity list for months. But Commerce has the PIN, Commerce BIS has the PIN, and you will have to have to assume about their internal processes. For more on Bessent's comments, I'm joined now by WSJ White House Economic Policy reporter Brian Schwartz. Brian, break this down a little for us. What is Bessent saying was supposed to happen here that didn't? Megaspeed has been accused of being one of these companies that took Nvidia ships and sold them to China and beyond. And that basically created a loophole around the export controls that the United States holds. And so the Treasury Secretary of Bottom Line was making the case that it was Commerce that was responsible for not placing Megaspeed on its entity Blacklist. So, what was the thinking at the Commerce Department, I mean, why was Lutnik reluctant to do this? So my understanding is that Lutnik was convinced that if they moved to start this process of putting Megaspeed or any of these companies on the Blacklist, that it could really ramp up some sort of trade war with China. But there is some questions around that. We're already kind of in a trade war with China. So behind the scenes, the argument against Lutnik within the administration has been that he was slow walking this process out of a favor to Jensen Wong, rather than something related to some sort of trade war with China. What has Lutnik's response been so far to this criticism about Megaspeed? He has said nothing. We have asked him to speak with us on the record, and he has not done so. And we should note that a spokeswoman for the Commerce Department didn't immediately respond to a request for comment on this. So zooming out a little bit, for now, as you mentioned on this morning show, Lutnik has Trump's support. That's been the case for some time. But what are the political implications of best taking his criticism of Lutnik public? There have been various allies amid this controversy around Nvidia, where they have gone to the president. It is a people from within the administration and I've tried to make the case for why this should be enough to fire Howard Lutnik It definitely comes off that the Treasury Secretary he's trying to weaken Lutnik's position with the president The two of those guys Lutnik and Besson have been going at it since the transition days fighting over who would be the Treasury Secretary That feud is continued and I don't see it dissipating anytime soon. That was WSJ White House economic policy reporter Brian Schwartz. Thanks Brian. Thank you In the Middle East, Iran took a shot at U.S. Gulf ally Bahrain for the first time in two months U.S. forces shot down Iran's drones and there was no injury or damage But the strikes mark an escalation of the skirmishing between the U.S. and Iran that's been going on for months around the Strait of Hormuz. Trump has signaled that he doesn't want to return to major combat And people all over the world are brazing for more extreme weather expected from this year's super El Niño An El Niño that could become the most powerful on record. There have been wildfires in Asia and Hurricanes in the Pacific But one place it could bring good news is the American West where El Niño is expected to dump huge amounts of snow Place is expected to get above average snow this winter include Utah the southern and eastern mountains of Colorado and Lake Tahoe and Mammoth in California Skie areas and the Rockies are already going all in as they hope to make up for last year's dismal winter Skie Utah represents the state's resorts and it's launched a vote super El Niño campaign including yard signs and t-shirts to tout the greatest snow on earth and Veil resorts is hoping for a rebound in skier visits this season the El Niño effect is expected to stay strong through March And finally we on the WSJ audio team love our cats and dogs. Okay I'm sure you do too, but you might have noticed that visits to the vet are getting a little bit tense and I'm not just talking about cats who hide under the couch before a checkup I mean the humans involved Ellen Gammerman a culture writer for the journal has the latest Ellen. What is causing this drama at the vet? Everyone's pet has become so much more precious They come in with basically like a family member when the prices are so high So they're already kind of Braced for an issue. Yeah, I mean why are vet visits so expensive now like I brought one of my cats to the vet a couple of years ago And it was $800 after they gave him some fluids and then he was like fine Right, and you may be even got off easy. So a couple things are going on to make this visit more expensive one is that private equity Is buying up a lot of these small mom and pops and big corporations are buying them up and with that comes an Increasing prices as well as just some medical advancements and with the technology and the medications They're offering it and pet owners don't want to say no, but they're shocked by how much this can all add up I mean the whole Impetus for this story was when we took our dog to the vet and We brought her in for one thing and then we found out not only were we gonna have to pay $1,200 But she was overweight and we felt really bad about that because she looked great to us I got a similar reading on my cats where the vet said they were both quote a little chunky and I was very offended because they don't look people get so offended right I imagine that makes for some pretty tense meetings when vets have to deliver hard news like telling owners that their pets are overweight How are vets dealing with some of these difficult interactions with owners? there are courses that are being marketed to vets offices about how to placate an angry client there are specialists in Compassion fatigue who come and they have little clinics for the staff because this is a job where it's not just physically burning out But there's a psychic and emotional toll and I would just remind myself about having empathy for The other people in the room because your pet is is really an important member of your family and you're gonna already Be pretty heightened in your own tension. That was WSJs Ellen Gammerman. Thanks Ellen. Thank you And that's what's news for this week tomorrow. You can look out for our weekly markets wrap up What's news and markets then on Sunday? We'll be featuring an episode of our tech news briefing podcast about the rise and fall of Jensen Wong That's in what's news Sunday and we'll be back with our regular show on Monday morning Today's show is produced by Danny Lewis and Anthony Bansy with supervising producer Tally R. Bell Michael LaValle wrote our theme music I shall loosely miss our development producer Chris Sinsley is our deputy editor Lee Tal Melod is our senior director of shows and Samantha Henig is the Wall Street Journal's head of multimedia I'm Alex Osola. Have a great weekend and thanks for listening