Iran’s new supreme leader is injured but reportedly ‘safe’ as traders sour on war exit strategy

Sentiment sours on war exit strategy

Investors aren’t buying Trump’s war is “very complete” line—at least not yet. S&P 500 futures are down 0.22% this morning after the index closed down 0.21% yesterday. The STOXX Europe 600 fell more than a full point in early trading. Asia had a good day on news that the International Energy Agency is preparing the largest release of strategic oil reserves in its history. (The region is heavily dependent on foreign imports.) Japan’s Nikkei 225 was up 1.43%, South Korea’s KOSPI was up 1.4%

TOP STORIES

ONE BIG THING

Jeffrey Epstein pulled Bill Gates and Microsoft into a web of sex, money, and secrets

Jeffrey Epstein drafted text for a Microsoft 8-K SEC disclosure. He negotiated the exit package of Steven Sinofsky, former president of Windows, for a $1 million fee. He monitored Bill Gates’ marriage and provided gifts and resources to a woman Gates had a relationship with. This Fortune investigation by Eva Roytburg shows how the convicted sex offender bore his way into Gates’ inner circle—a tactic Epstein also employed to cozy up to other powerful figures, like Elon Musk.

IRAN

Ayatollah injured but reportedly ‘safe’

• Iran’s new Supreme Leader Mojtaba Khamenei is “safe” despite reports that he was injured by a U.S. attack. Nonetheless, he has not been seen publicly since the start of the war. 
• The Iran war is costing $1 billion per day, according to Fortune’s Nick Lichtenberg. Apollo Global Management chief economist Torsten Slok calculated it will trigger a 0.5% boost to inflation and a nearly 0.1% drag on GDP. The Center for Strategic and International Studies reckoned that the U.S. in the war’s first 100 hours spent a total of $3.7 billion—and that 95% of that number wasn’t budgeted, according to Fortune’s Shawn Tully.
• Iran is laying mines in the Strait of Hormuz but U.S. forces have taken out 16 mine-laying ships in an attempt to make the strait safe again. 
• Iran continued to strike across the region in Iraq, Saudi Arabia, the UAE, and Kuwait. Dubai airport is still operational despite a drone attack that injured four. Israel continued its attacks on Iran and its proxies in Lebanon 
• Israel and the U.S. may have different war aims, the Wall Street Journal reports, and that may complicate the end of the war. The U.S. is leaning toward a quick victory, but Israel wants to continue until Iran’s military capabilities are fully neutralized.
• Listen to the mysterious “number stations” broadcasting codes in Farsi into Iran on shortwave radio. Tehran is scrambling to jam the signals. No one knows what the codes are for or who they are directed at.

Israel outlines ‘grand plan’ for fate of Iran

Israeli President Isaac Herzog spoke yesterday to business leaders in Washington at the Yale CEO Caucus, and Fortune’s Diane Brady listened in. Top CEOs are no fans of Iran and many believe that ending this war will be easier said than done. Attendees asked Herzog about the allies’ long-term plan and criticism that the attacks were launched without one. “The grand plan is first and foremost to weaken them substantially, and that is what is being done,” he said, arguing that Iran’s “grand master plan” was a threat beyond the region. “Every American leader, every European leader, was talking to us about Iran. We understood that it’s a cocktail of extreme ideology, jihadist ideology, that does not accommodate moderate Islam, Christianity, Judaism, or anybody else.”

$200 per barrel? 

Oil is back at around $90 a barrel today but the market may be underestimating the scale of disruption to the market, according to Wood Mackenzie analyst Simon Flowers. “Gulf countries in total produce 20 million b/d [barrels per day] of liquids, and 15 million b/d of exports have been taken out of the global market. The industry has never faced a loss of supply volumes of this magnitude,” he told clients in a note seen by Fortune. “While oil reached $150/bbl [per barrel] in inflation-adjusted terms during the 2022 Russia/Ukraine crisis, this situation could prove more severe. … Supply volumes at risk this time are dimensionally bigger—and real,” he wrote. “In our view, US$200/bbl is not outside the realms of possibility in 2026.”

CAPEX, SCHMAPEX!

Oracle blows the doors off

Oracle called the third quarter of fiscal 2026 its best in 15 years with revenue up 22% to $17.2 billion and cloud infrastructure up 84% to $4.9 billion. The market rejoiced, sending the stock up nearly 10% in after-hours trading, Fortune’s Amanda Gerut reports. But under the hood, the enterprise software giant is blowing through cash. Its free cash flow clocked in at negative $24.7 billion over the trailing 12 months as its capital expenditures rocketed to a guided $50 billion this fiscal year, mostly for AI data centers.

CHART OF THE DAY

How much bigger will your tax refund be? 

Wells Fargo and the Tax Policy Center’s estimates of the increase since last year in U.S. tax refunds, sorted by income bracket. 

INEQUALITY

The income gap between rich and poor is the widest on record

• As the chart above suggests, income inequality in the U.S. is in fact on the rise, according to Bank of America analysts Liz Everett Krisberg and David Michael Tinsley. “In the February Bank of America deposit data, higher-income after-tax wage growth accelerated to 4.2% year-over-year (YoY), while lower-income after-tax wage growth dropped back to 0.6% YoY. This means the gap between higher- and lower-income households’ wage growth—at 3.6 percentage points (pp)—is the widest of any point in our data, which begins in 2015,” they said in a piece of research seen by Fortune.

NUMBER OF THE DAY

2.1 million

The number of barrels of oil per day that Iran is successfully moving through the Strait of Hormuz—more than the 2 million per day it exported before the war started, according to the shipping research firm Kpler.

QUICK HITS

• Beijing’s dominance in rare earth processing leaves others scrambling to close the gap: ‘China is the leader, and the U.S. is far behind’ by Angelica Ang
• LIV Golf CEO Scott O’Neil on how stuck golfers got out of a besieged Gulf: ‘Precise planning, excellent resources and tremendous leadership’ by Nicholas Gordon
• Bitcoin has mined 20 million coins: why the last of the remaining 1 million won’t arrive until 2140 by Carlos Garcia
• Will AI take your job? This chart in an economic study by Anthropic may give you a hint. But the answer is complicated by Jeremy Kahn

THE FRONT PAGES TODAY

OpenAI, Anthropic feud could help Google – Axios

Kremlin backs covert campaign to keep Viktor Orbán in power – FT

Harry, William and the royal rift that won’t heal – WSJ

Iran’s cheap, plentiful weaponry puts U.S. military under unprecedented strain – Bloomberg

ONE MORE THING

UBS to wealthy clients: The taxman cometh

Be under no illusions: With government debt levels at record highs, and private sector wealth at even more dizzying levels, it is a matter of time before governments start taxing wealth more thoroughly, according to this deep-dive from UBS (PDF). “The great wealth transfer [from the Baby Boomers to their inheritors] means record amounts of wealth will change ownership in the next two decades. Indebted governments will not ignore this,” the bank says. It expects governments to “mobilize” wealth through “financial repression” (incentivizing savers to invest in government debt, thus lowering interest rates, and capital gain taxes.