Washington’s overnight courtship of Riyadh is more than pageantry. President Trump’s designation of Saudi Arabia as America’s 20th “major non-NATO ally,” paired with a promised $1 trn investment package and the first-ever F-35 sale to a state beyond Israel, redraws the commercial and security map of the Middle East. (reuters.com)

Beneath the fanfare lies dissonance: the deal undercuts repeated U.S. vows to preserve Israel’s qualitative military edge and revives proliferation anxieties just as a nuclear-co-operation pact (with no enrichment cap) is inked. History shows that advanced-arms transfers—think Iran before 1979—often outlast the regimes they aim to secure. Markets are already pricing heightened risk premia into regional energy assets, while U.S. defense equities rallied 2 % in after-hours trading.

If interests trump values today, the reckoning will be geopolitical, not moral. As political scientist Ian Bremmer reminds us, “There are no permanent friends or enemies, only permanent interests.” A transaction framed as stability may instead sow the next volatility cycle.

The Gist AI Editor

Rate Cut Reality Check

Wall Street’s optimism for multiple US Federal Reserve rate cuts faces a reality check. Vanguard warns markets are overeager, citing ‘massive’ AI spending as a powerful economic tailwind that will prop up growth (FT). This suggests borrowing costs may stay higher for longer. Concurrently, calls are growing for the Bank of England to issue clearer policy projections to reduce the market guesswork that hampers business investment (FT).

Rethinking Regulation

The US Securities and Exchange Commission (SEC) may loosen auditor independence rules for the “Big Four.” The goal is to increase choice for technology companies who find the current strict separation between auditing and consulting services too restrictive (FT). The move pits the benefits of deregulation and competition against the foundational need for stringent oversight to ensure market integrity.

Risk Beyond the Ticker

Political and operational risks are creating market headwinds. French energy giant TotalEnergies is now implicated in a war crimes complaint over its vast Mozambique gas project, a harsh lesson in geopolitical blowback (Politico.eu). Meanwhile in Spain, the Supreme Court’s ousting of the attorney general deepens a feud with the government, injecting political uncertainty into a key Eurozone economy and rattling investor confidence (Politico.eu).

Stay tuned for the next Gist—your edge in a shifting world.

How the Bank of England could be clearer on the rates outlook
— Financial Times

Wall Street is banking on too many Fed rate cuts, Vanguard warns
— Financial Times

SEC weighs looser independence rules for Big Four auditors
— Financial Times

De l’eldorado au bain de sang : comment TotalEnergies s’est engluée au Mozambique
— Politico.Eu

‘I Wanna Blow This Up’: How Bari Weiss Is Trying to Overhaul CBS News
— Wall Street Journal

TotalEnergies bet big on Africa. Then the killing started.
— Politico.Eu

AI’s New Research Paradigm

OpenAI’s claim that its new model, GPT-5, can act as a “chercheur débutant” (beginner researcher) is a watershed moment for innovation (Le Monde). This leap in artificial intelligence signals a dramatic acceleration in scientific R&D, promising to slash discovery timelines. For Europe, the development is a stark reminder of the competitive stakes. While the US fosters rapid, market-driven AI progress, the EU’s regulatory-heavy approach risks placing its own innovators at a permanent disadvantage. The core challenge isn’t just matching the technology, but fostering an environment where permissionless innovation can thrive without being suffocated by precautionary principles. The productivity gains for economies that fully embrace this shift will be immense.

India-Israel Bilateralism Gathers Pace

New Delhi and Tel Aviv are restarting negotiations for a Free Trade Agreement (FTA), a pact designed to deepen economic ties (Deutsche Welle). India is already Israel’s second-largest trade partner in Asia. This move underscores a broader global trend: agile, bilateral agreements are increasingly supplanting cumbersome multilateral processes. For free-trade advocates, this is a pragmatic step forward, demonstrating how motivated nations can independently lower barriers to create mutual prosperity. The pact’s success will likely spur other economies to pursue similar targeted deals, further reshaping global supply chains and challenging established trading blocs.

Catch the next Gist for the continent’s moving pieces.

Wadephul: “Friedensplan” der USA “Auflistung von Optionen”
— ZDF

India, Israel sign framework to resume trade talks
— Deutsche Welle

Sébastien Bubeck : « Nous avons maintenant des IA qui agissent comme un chercheur débutant »
— Le monde

Ukraine: Unterricht zwischen Luftalarm und Minenkunde
— ZDF

Helfen Sie Merz erneut aus der Patsche, Herr Banaszak?
— ZDF

F1: Las Vegas, la Ferrari di Lecrerc vola nelle prime libere
— Ansa