Good morning. U.K. grocery store chain Tesco said Friday that its Chairman John Allan would step down in June following claims that he acted inappropriately toward several women. Allan is one of the U.K.’s most prominent business figures, having served previously as president of the Confederation of British Industry, a lobby group.

• Background: The Guardian, a U.K. newspaper, earlier this month published a story citing anonymous sources who claimed that Allan had inappropriately touched two women, and made inappropriate remarks about two others, including at a 2019 event held by the CBI, and at Tesco’s 2022 annual meeting.
   
• Allan's response: Allan, who has served at the company since 2015, has denied three of four claims about his conduct toward women, Tesco said Friday. The executive has “unreservedly apologized” for another, which dealt with a comment he made about a woman’s dress.
   
• Tesco's response: Tesco on Friday said it had initiated an investigation into the claims against Allan, which included reviewing footage from its 2022 annual meeting and contacting attendees of the meeting. The investigation didn’t identify any evidence or complaints of misconduct by Allan at the meeting or throughout his tenure as Tesco’s chair, the company said. 

Biden sees potential thaw with China after tough G-7 statement.

President Biden said Sunday he expected a thaw in relations with China, a day after he and other Group of Seven leaders took steps to tackle what they see as Beijing’s economic intimidation.

Biden said at a news conference wrapping up the G-7 meeting in Japan that the U.S. wants to open more lines of communication with China.

• U.S. Backs Jet-Fighter Training for Ukrainian Pilots
• In Hiroshima, Zelensky Tells Putin to Abandon ‘Nuclear Blackmail’
• Biden, Fellow G-7 Leaders Take on China at Hiroshima Summit

• A federal judge ruled in favor of the Justice Department’s effort to unwind a partnership between American Airlines and JetBlue, finding that their arrangement suppressed competition in key northeast markets.
   
• China is banning major Chinese firms from buying from Micron Technology, saying its products pose a major national-security risk. 
   
• A group of TikTok creators is suing Montana’s state attorney general over the state’s new ban of the social-media platform, echoing steps some of the app’s fans took to battle Trump-era efforts to restrict the app.
   
• Facebook owner Meta Platforms was fined $1.3 billion by European Union privacy regulators for sending user information to the U.S., according to people familiar with the matter, a record for the bloc.

Debt-ceiling standoff could start a recession, but default would be worse.

Prolonged debt-ceiling squabbling could push the U.S. economy into recession, while a government default on its obligations might touch off a severe financial crisis.

Looming deadline. U.S. lawmakers are negotiating over raising the federal government’s borrowing limit and may have just days to act before the standoff reverberates through the economy.

• Biden, McCarthy Attempt to Revive Budget Talks as Debt Default Looms

America’s biggest bank Is everywhere—and it isn’t done growing.

JPMorgan Chase now has more than 13% of the nation’s deposits and 21% of all credit-card spending, a bigger share in each than any other bank. When the banking system faced a crisis of confidence this spring, JPMorgan’s heft was a ballast. Customers sent it $50 billion in new deposits.

Yet JPMorgan’s show of strength, for many, exposed a weakness in the U.S. financial system. The bank and its largest rivals have become so big, their reach so extensive, that the government would almost surely step in to prevent their failure. That implicit guarantee encourages people and businesses to move their money to them in times of stress creating a feedback loop that makes big banks bigger at the expense of smaller peers.

• As he turns 70, Xi Jinping has cleared the field of all potential rivals, with no heir in sight—a situation that could destabilize China and rock the foundations of the global order.
   
• Ukrainian forces have lost effective control of the eastern city of Bakhmut, Ukraine’s top commander in the region said, as Moscow declared its first significant conquest since last summer after months of fighting that has cost thousands of lives and obliterated the city.

• Jeffrey Epstein discovered that Bill Gates had an affair with a Russian bridge player and later appeared to use his knowledge to threaten one of the world’s richest men, according to people familiar with the matter.
   
• Exxon Mobil is bracing for a future far less dependent on gasoline by drilling for something other than oil: lithium.
   
• China is ramping up efforts to develop a satellite-powered internet network that can compete with Elon Musk’s Starlink, which has quickly expanded around the world and whose military applications have been on display in Ukraine’s defense against Russia.
   
• Apple has restricted the use of ChatGPT and other external artificial intelligence tools for some employees as it develops its own similar technology, according to a document reviewed by The Wall Street Journal and people familiar with the matter.
   
• The Russian government has rejected for a second time a request from U.S. officials to visit detained Wall Street Journal reporter Evan Gershkovich in a Moscow prison.

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