Good morning. The Texas attorney general is investigating Lululemon Athletica for allegedly using so-called forever chemicals in its workout gear. But the athletic-apparel company said it stopped using the chemicals more than two years ago.
 

• PFAS: The chemicals, known as PFAS, don’t break down in the environment and accumulate in the body, potentially causing health problems such as cancer and infertility. They have been used in a range of consumer products since the 1940s, from clothing and cosmetics to food packaging and nonstick cookware, often as a slippery coating to repel water or stains.
   
• New research: The Office of Attorney General Ken Paxton said in a statement Monday that emerging research and consumer concerns have raised questions about the potential presence of these chemicals in the company’s apparel.
   
• Denial: A Lululemon spokeswoman said the company doesn’t use PFAS in its products. It previously had used the chemicals in durable water-repellent garments, which accounted for a small portion of the products it sold. But it phased out the use of the chemicals as of January 2024, she said. 
   
• Latest setback: The probe is the latest setback for the Vancouver, British Columbia, company, which has experienced declining sales in the U.S., quality issues and a public spat with its founder, who is pushing for a board overhaul.

Bank of America wins appeal in Iran compliance case.

Bank of America didn’t violate the law when it closed an Iranian man’s bank account under its internal compliance policies, a federal appeals court said, ruling a broad carve-out under sanctions law shields the bank from legal action, Richard Vanderford reports for Risk Journal. (free link)

The U.S. Court of Appeals for the Ninth Circuit on Monday upheld the dismissal of a proposed class action lawsuit against Bank of America, saying the bank was shielded by the good faith application of its compliance policies.

• A federal judge on Monday dismissed President Trump’s defamation lawsuit against the publisher of The Wall Street Journal. 
   
• The U.S. Justice Department will prosecute anyone buying or selling sanctioned Iranian oil, Todd Blanche, the acting attorney general, said Sunday, Risk Journal reports. (free link)
   
• Much of Corporate America in the past decade embraced the theory that diversity, equity and inclusion policies were good for productivity and profits. A new White House study concludes the opposite.

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Iran war’s economic shock wave is expected to get even bigger.

President Trump’s naval blockade of Iran risks further upending a global economy already battered by weeks of war, escalating a regional clash into a worldwide financial shock that could prove more devastating than the fighting itself.

The U.S. blockade on ships entering or exiting Iranian ports is set to drain more oil from a tight market, prolong the squeeze on other key commodities flowing through the Strait of Hormuz and inject significant uncertainty into the global economy.

See also:

• In a Shift, U.S. Asked Iran to Suspend Nuclear Enrichment for 20 Years
• How the U.S. Navy Is Blockading the Strait of Hormuz to Choke Off Iran’s Ports
• The U.S. Warships Poised to Enforce Trump’s Blockade
• Saudi Arabia Is Pressing U.S. to Drop Its Hormuz Blockade
• Israel Hasn’t Attacked Beirut Since Wednesday Amid U.S. Pressure

• The artificial intelligence gold rush is rapidly drying up the supply of the one resource that AI developers can’t do without: computing power.
   
• The local union for thousands of beef processing plant workers in Colorado reached a new labor agreement with JBS, the world’s largest meat company, a week after employees agreed to return to work following a three-week strike.
   
• President Trump has extended the national emergency with respect to Somalia for another year, preserving the legal basis for U.S. sanctions against individuals and entities connected to the country, Risk Journal reports.
   
• The International Energy Agency sees global oil demand shrinking by 80,000 barrels a day this year.
   
• Home builders are looking everywhere for ways to slash costs. They are finding them in cabinets, faucets and even the garage door remote.

• President Trump lashed out at Pope Leo XIV following the pontiff’s public condemnation of the war in Iran, accusing the leader of the Catholic Church of being weak on crime and catering to liberals.
   
• Canadian Prime Minister Mark Carney has secured a majority government, cementing his hold on power after electoral victories Monday night and defections to his Liberal Party caucus over the past six months.
   
• The man who finally defeated Hungarian Prime Minister Viktor Orbán celebrated his victory Sunday night by marching through crowds of supporters waving the national flag to Frank Sinatra’s signature song, “My Way.” It was a fitting soundtrack for Péter Magyar, a maverick politician who jettisoned the failed tactics of Orbán’s previous challengers.
   
• Only three members of the House have been expelled since the Civil War. This week, there are calls to expel as many as four more.
   
• The rainbow Pride flag can be displayed at New York City’s Stonewall National Monument, the federal government said, reversing an earlier decision to remove the symbol for LGBTQ rights from the historic landmark.

Follow us on X at @WSJRisk. Send tips to our reporters Max Fillion at max.fillion@dowjones.com, Mengqi Sun at mengqi.sun@wsj.com and Richard Vanderford at richard.vanderford@wsj.com.

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