Good morning. A congressional investigation found that Wall Street used billions of dollars of American retirement savings and other investments to buy shares in index funds that included more than five dozen blacklisted Chinese companies.

The probe, conducted by a bipartisan House committee empowered to devise strategies for the U.S. to counter China, focused on BlackRock, the world’s largest asset manager, and MSCI, a compiler of stock indexes.

• Call for restrictions: The investigation by the House Select Committee on the Chinese Communist Party represented a broad review of how American financial institutions facilitated investment in Chinese companies accused by the U.S. government of bolstering China’s military and violating human rights. The committee, which has no legislative power, urged U.S. lawmakers in its report to restrict such capital flows as U.S.-China competition intensifies.
   
• Not illegal: “What may surprise many Americans is that this activity is not illegal,” the committee said in the report, which was released Thursday. BlackRock and MSCI said they violated no laws and maintained they had little discretion to independently exclude Chinese entities from index funds.
   
• Billions in flows: The committee concluded that through investments in index funds, American financial institutions funneled $6.5 billion last year to some 63 Chinese companies flagged by the U.S.

Iran targeted with sanctions, export controls after attack on Israel.

The U.S. has hit Iran with a new wave of sanctions and export controls in response to the country’s recent air attack on Israel, a move aimed at grounding Iran’s drone program and pinching its national revenue.

The U.S. Treasury and Commerce Departments on Thursday announced a package of financial sanctions that targets a number of companies and individuals, both inside and outside Iran, alongside controls on low-level technology that could be employed in drone manufacture.

Congress fast-tracks TikTok ban legislation.

Congress is fast-tracking a bipartisan effort to crack down on TikTok that could lead to passage of a law this month forcing a sale or eventual ban of the popular Chinese-controlled app in the U.S.

The House plans to vote this weekend on revised TikTok legislation that would tie it to a sweeping package of aid for Ukraine and Israel. The new approach would give TikTok up to a year to find new ownership—versus the six months previously proposed—with the fate of the wildly popular video-sharing app hanging in the balance.

Mango Markets trader found guilty.

Avraham Eisenberg, who authorities say manipulated trading on decentralized exchange Mango Markets and drained it of more than $110 million of cryptocurrency, was convicted on Thursday in New York for a range of fraud and manipulation charges.

Eisenberg, a resident of Puerto Rico, was arrested in late 2022. He faces up to 20 years in prison. Eisenberg is scheduled to be sentenced on July 29.

• Jabil Chief Executive Kenneth Wilson was placed on paid leave as the company conducts an investigation. The electronics contract manufacturer in a regulatory filing on Thursday didn’t specify what prompted the investigation or provide further details.
   
• Beijing said it opposes a U.S. probe into China’s shipbuilding industry, calling the investigation a politically driven move full of “false accusations” and threatening to take further action.
   
• San Francisco sued Oakland in a federal court Thursday over the latter city’s plan to rename its airport San Francisco Bay Oakland International Airport. The lawsuit accuses Oakland of unfair competition and violating the trademark of San Francisco International Airport.

Israel strikes Iran in narrow attack amid escalation fears.

Israel retaliated overnight against Iran’s massive drone and missile attack on its territory, people familiar with the matter said—with what appeared to be a limited strike aimed at avoiding an escalatory cycle that could push the countries closer toward war.

The strike targeted the area around Isfahan in central Iran, one of the people said. Iranian media and social media reported explosions near the city, where Iran has nuclear facilities and a drone factory, and the activation of air-defense systems in provinces across the country after suspicious flying objects were detected.

• White House Makes Fresh Push for Saudi-Israel Diplomatic Deal
• Iran Threatens to Work on Nuclear Arms if Israel Attacks Nuclear Sites

Apple to spend more than $250 million to expand Singapore hub.

Apple will invest more than $250 million to expand a regional hub in Singapore to support growth and new undertakings in artificial intelligence, as the U.S. tech giant seeks to diversify its footprint in Asia and cut exposure to China.

The company is in the midst of boosting investment in Southeast Asia and other areas of Asia as it seeks to diversify its supply chain amid rising U.S.-China tensions and global concerns of decoupling trade.

Separately, Ericsson laid off 240 employees in China. The Swedish telecommunications-equipment company told employees at an internal meeting in early March that it was embarking on a transformation of its China operations that would continue into 2025, several people who attended the meeting told The Wall Street Journal.

• A torrential downpour has left the normally arid United Arab Emirates in disarray. The country’s 12-lane highways are littered with abandoned cars; schools and businesses are shut; and the country’s army of blue-collar and domestic workers has been stranded at home.

• Richard Galanti was named CFO of Costco at age 28. Nearly 40 years later, he has stepped down after leaving his mark at the retail behemoth by trying to keep things simple.
   
• State lawmakers are debating and passing bills to make it harder for private-equity firms to buy up healthcare businesses across much of the U.S.
   
• The messaging from a pair of top monetary policy setters this week made it clear that the central banks of the U.S. and Europe are to part ways.

🎧 Listen to the chief information security officer at cloud-based financial services company Bill discuss what company leaders can do to improve how they oversee cybersecurity.

• Roberta Karmel, the first female commissioner at the Securities and Exchange Commission, has died at the age of 86. Colleagues dubbed her “the pregnant enforcer" after she defied 1960s norms by continuing to work after having babies.
   
• The Netflix password crackdown has delivered millions of new customers.
   
• Members of the family that founded department store Nordstrom are considering a bid to take the company private. Anne Wojcicki is also seeking to take her DNA-testing company 23andMe private.
   
• Mortgage rates have surged past 7% and home sales in March posted their biggest monthly drop in more than a year, renewing pressure on the U.S. housing market.
   
• The U.S. ambassador to Russia visited Evan Gershkovich, the Wall Street Journal reporter who has been in custody in Moscow awaiting trial for more than a year, as negotiations continue behind closed doors to secure the American’s release.

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