As Trump rages against his allies, Republicans are asking what the plan is to end the chaos in Iran

Good morning. In today’s Fortune:

It’s Fed day—expect Powell to keep rates at 3.5%.

Iran: As Trump rages against his allies, Republicans want to know what the plan is.

Chaos in the Gulf is producing ‘butterfly effects’ far away.

Why the U.S. doesn’t have enough minesweepers to open the Strait of Hormuz.

Prediction markets see the war getting longer.

Nvidia might pay engineers in AI tokens

Exclusive: AI isn’t destroying consultants, Capgemini says.

Exclusive: Hinge CEO on the ‘dating recession.’

It’s Fed day—and there will be no surprises

Oil was at $102 this morning and moderating downward after Iraq made a deal to export oil through Turkey, avoiding the Strait of Hormuz. S&P 500 futures were up 0.5% before the bell after the index closed up 0.25% yesterday. The optimism continued in Asia and Europe: South Korea’s KOSPI was up 5%, Japan’s Nikkei 225 was up 2.87%, Stoxx Europe 600 was up 0.57% in early trading, and the U.K.’s FTSE 100 was up 0.33% midmorning. 

Powell will hold the line against oil-driven inflation: As UBS’s Paul Donovan told clients this morning, “The Federal Reserve is universally expected to leave policy unchanged [but] markets want to know the Fed’s reaction to oil prices and the war. U.S. retail gasoline prices are almost exactly a dollar (35.5%) above 2026 lows, having risen every day for four weeks.”

If oil stayed above $100 per barrel for a full year, the tax benefits for Americans in the One Big Beautiful Bill Act ($800 per person) “will be fully wiped out" due to inflation, according to Wells Fargo’s estimates.

No end in sight, but plenty of 'butterfly effects'

The resignation of Joe Kent, the director of the White House’s National Counterterrorism Center, has focused attention on the Trump Administration’s strategy for winning, ending, or exiting the war with Iran. Kent said he resigned because the U.S. should have never been involved in the first place and that Iran “posed no imminent threat to our nation,” according to Fortune’s Catherina Gioino. (Kent also floated a conspiracy theory that the war was all Israel’s fault.) Republicans are becoming more open in their dissent against the war.

The problem is that the U.S. and Israel have two different aims in the conflict, according to Axios. The U.S. is focusing on destroying Iran’s military capabilities, but Israel is hunting down and killing as many top-level Tehran regime members as it can find. (Here is a list of the dead.)

The result is chaos, Axios reports: "Israel doesn't hate the chaos. We do. We want stability. Netanyahu? Not so much, especially in Iran. They hate the Iranian government a lot more than we do," a White House official told the site.

Side note: The U.A.E. reportedly wants Iran neutralized for good.

The chaos is producing “butterfly effects” across the world, which include unexpected “second-order effects” far from the Strait of Hormuz, according to Deutsche Bank’s George Saravelos. “First, a disruption to chip production in Taiwan given the industry's reliance on Middle East energy production, including helium. Disruptions to the semiconductor supply chain could be highly relevant given the importance of AI in driving equity valuations,” he told clients in a note seen by Fortune. He is also watching “the broader knock-on influence on the credit cycle.”

Shipping groups have invoked a 19th-century law that allows them to dump their clients’ cargoes at the nearest convenient port, and force the client to pay for moving it from there, according to the Financial Times. Containers destined for the Middle East have been dropped at in India, deliveries for Saudi Arabia have been dumped in the U.A.E.

Don’t expect the Strait of Hormuz to reopen anytime soon. “Until we’ve neutralized Iran’s layered, asymmetric capabilities—mines, fast attack craft, submarines and drones—we won’t want to put commercial or even escort ships through," Bob McNally, president of Rapidan Energy Group, told Bloomberg. 

President Trump is furious that NATO declined to send minesweepers to help the war effort. “WE DO NOT NEED THE HELP OF ANYONE!” he raged on social media last night.

The lack of minesweepers is a problem because four of the U.S. Navy’s anti-mining ships are heading to Philadelphia for decommissioning, and another four are in Japan, the Wall Street Journal reports.

ARTIFICIAL INTELLIGENCE

Nvidia might pay staff in AI tokens

As business leaders aim to harness AI to boost worker productivity, Nvidia CEO Jensen Huang said his company is considering plans to pay engineers in tokens—the currency of AI—to amplify their output, according to Fortune’s Jake Angelo. “I could totally imagine in the future every single engineer in our company will need an annual token budget,” he said. “They’re going to make a few 100,000 a year as their base pay. I’m going to give them probably half of that on top of it as tokens so that they could be amplified 10 times.”

AI isn’t destroying consultants, Capgemini says

Not dead yet! Capgemini Chief Strategy Officer, Fernando Alvarez, says that despite the chatter that consultancies will be killed off by AI, clients aren’t giving up on humans yet. He told Fortune’s Jeremy Kahn that while every company wants to use AI agents, they also recognize the need to govern those agents, ensure cybersecurity around them, and enable them to interact with legacy systems and fragmented data sources. Advising clients on all of those topics has been Capgemini’s bread and butter. Alvarez says clients aren’t ready to hand it off to AI. “The conversation is, do you have the domain expertise to understand my problem?” he says.

Mark Zuckerberg is poised to finish what Jack Dorsey started: a ‘cascade’ of AI-related layoffs across the tech sector.

A gaming CEO asked ChatGPT how to avoid paying a $250 million bonus. It didn’t work.

Benchmark’s Bill Gurley says the AI bubble is about to burst—and a reset is coming.

Prediction markets see the war getting longer

“The market seems to agree on one thing: the longer the war goes with Iran, the worse it gets for risk assets,” says Ohsung Kwon and his team at Wells Fargo. “Prediction markets don't expect a ceasefire until early June, just before the World Cup starts, up from the third week in April at the start of the war.”

The largest amount of outflows from exchange-traded funds covering the S&P 500 companies, as a percentage of % market cap, since March 2023, as tracked by Wells Fargo.

McDonald’s newest $3 value menu is sounding an alarm about America’s K-shaped economy by Marco Quiroz-Gutierrez

‘100% completely unsustainable as a society.’ Billionaire advisor calls out widening inequality that leaves America’s poorest 80% ‘falling behind’ by Tristan Bove

Scott Galloway wants the stock market to crash. Gen Z is already betting like it will by Nick Lichtenberg

Stocks haven’t hit bottom yet, says the analyst who called a ‘rolling recession’ when everyone else saw a boom by Nick Lichtenberg

THE FRONT PAGES TODAY

France ready to help U.S. secure Strait of Hormuz—but not while ships are under attack - CNBC

Warner Bros chief David Zaslav in line for $700mn payday - FT

Anthropic is now capturing over 73% of all spending among companies buying AI tools for the first time - Axios

How a Deep State Bureaucrat Became Trump’s ‘Fake News’ Enforcer - Bloomberg

Netanyahu Posts ‘Proof of Life’ Video as A.I. Sows Doubts About What’s Real - NYT

Hinge CEO thinks she can fix the ‘dating recession’

Everyone agrees that online (heterosexual) dating is awful. Women are overwhelmed by low-effort matches, and men frequently report few-to-zero dates. Lackluster conversations and aggressive upselling just to be visible on dating apps is the norm, Fortune’s Ellie Austin reports. People are turning away from online dating—Bumble saw revenue decline by 14.3% year-on-year in the last quarter of 2025. But Hinge’s revenue grew 26% in the same time period under new CEO Jackie Jantos. “I don’t see any group’s challenges in life or in relationships as sizably larger or smaller than another,” she says of the malaise. “Dating,” she says, “has never been easy.”

Jim Edwards is the executive editor for global news at Fortune. He was previously the editor-in-chief of Business Insider's news division and the founding editor of Business Insider UK. His investigative journalism has changed the law in two U.S. federal districts and two states. The U.S. Supreme Court cited his work on the death penalty in the concurrence to Baze v. Rees, the ruling on whether lethal injection is cruel or unusual. He also won the Neal award for an investigation of bribes and kickbacks on Madison Avenue.

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