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Welcome to the online version of From the Politics Desk, an evening newsletter that brings you the NBC News Politics team’s latest reporting and analysis from the White House, Capitol Hill and the campaign trail.

With another Senate Democrat announcing retirement plans, we explore the wave of younger candidates who are looking to replace them. Plus, Andrea Mitchell dives into the collapse of high-level talks to end the Russia-Ukraine war. 

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— Adam Wollner

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Senate Democratic retirements clear the way for a new generation

A growing number of Democrats in the Senate are stepping aside and clearing the way for the next generation of leaders as the party debates its path forward in the Trump 2.0 era.

The latest example came Wednesday, when Sen. Dick Durbin, of Illinois, the second-ranking Democrat in the chamber, announced he will not seek re-election in 2026 after having served in Congress for more than four decades, Sahil Kapur, Ben Kamisar and Bridget Bowman report. The decision will set off a scramble for his leadership posts in the Senate — he’s the minority whip and the ranking member of the Judiciary Committee — as well as for his seat in solidly blue Illinois.

Already, a bevy of prominent Democrats in the state have signaled their interest in replacing the Durbin, 80. Reps. Lauren Underwood (age 38), Raja Krishnamoorthi (51) and Robin Kelly (68) and Lt. Gov. Juliana Stratton (59) are all considering bids, according to sources familiar with their thinking. The winner of the Democratic primary would be a heavy favorite in the general election. 

Durbin is the fourth Senate Democrat to announce retirement plans ahead of next year’s midterm elections, along with Gary Peters of Michigan, Jeanne Shaheen of New Hampshire, and Tina Smith of Minnesota, who have similarly seen a wave of younger candidates jump into the races to succeed them. 

Michigan: The Democratic primary for the seat held by Peters (66) has quickly become crowded. Rep. Haley Stevens (41) is the latest candidate to jump in, joining state Sen. Mallory McMorrow (38) and former Wayne County health director Abdul El-Sayed (40). 

It’s expected to be one of the most competitive Democratic primaries in the country next year. And it is likely to lead to one of the most competitive general election matchups, too, with former GOP Rep. Mike Rogers (61) running again after having narrowly lost the Senate race in the state last year. 

New Hampshire: Rep. Chris Pappas (44) is the early Democratic favorite in the primary to replace Shaheen (78).  

Minnesota: After Smith (67) announced her retirement, Lt. Gov. Peggy Flanagan (45) and former state Senate Democratic leader Melisa López Franzen (44) launched their primary campaigns, while Rep. Angie Craig (53) is considering a bid. 

Those states will be more competitive in a general election than Illinois, so securing the Democratic nomination won’t provide a glide path to the Senate. But the open-seat primaries could pave the way for the sort of youth movement some Democrats have argued is needed to reinvigorate the party ahead of the 2026 and 2028 elections. 

Side note: Democrats will also aim to defend the youngest member of the Senate next year: 38-year-old Jon Ossoff of Georgia is expected to be Republicans’ top target on the map. 

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U.S. peace plan leaves Ukraine on edge

By Andrea Mitchell

U.S. peace talks to end the war in Ukraine appear to be near collapse, with President Donald Trump lashing out at Ukrainian President Volodymyr Zelenskyy for not accepting a U.S. proposal that is widely viewed as favoring Russia.

The U.S. plan would let Russia keep Crimea, Ukrainian territory that Russia occupied in 2014, and prevent Ukraine from joining NATO. In a one-two punch, Vice President JD Vance, traveling in India, threatened that the United States would walk away from the talks if the two sides didn’t accept the U.S. terms, which would be a territorial and military victory for Russian President Vladimir Putin. 

Zelenskyy told The Wall Street Journal that giving up Crimea would violate Ukraine’s constitution. And he asked what concessions Russia would make if Ukraine gave up hopes of becoming a member of NATO. While Zelenskyy has agreed to a 30-day ceasefire, Russia has not.   

Secretary of State Marco Rubio and special envoy Steve Witkoff were to hold talks Wednesday with Ukraine, England, Germany and France in London, but Rubio and Witkoff canceled at the last minute. That led European foreign ministers to also drop out, downgrading the talks to a meeting of technical experts.  

“If at some point we determine that if we’re just too far apart and not enough movement is happening, we may need to move on to other priorities, because there are a lot of important things happening in the world,” Rubio said. “This is not our war. We didn’t start this war.”  

Trying to smooth over the impasse, Zelenskyy said later in a statement: “Emotions have run high today. But it is good that 5 countries met to bring peace closer. … The American side shared its vision. Ukraine and other Europeans presented their inputs. And we hope that it is exactly such joint work that will lead to lasting peace.”    

The White House says Witkoff will go to Moscow this week for his fourth meeting with Putin. Trump had promised he would end the war within 24 hours of taking office.

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That’s all From the Politics Desk for now. Today’s newsletter was compiled by Adam Wollner and Bridget Bowman.

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Tiger balm, the popular menthol ointment used by athletes and arthritis patients, has just one U.S. distributor and a single factory in China, making it especially vulnerable to the tariff standoff. 

A 0.63-ounce hexagonal jar of the amber-colored balm typically sells in the U.S. for about $8. But its sole American distributor, Prince of Peace Enterprises, based in Livermore, California, says retail prices could soon rise as President Donald Trump hiked up tariffs on China as high as 145%. 

The ointment for the U.S. markets is produced at a factory in China and, at the current tax rate, the distributor is anticipating $3 million to $5 million in tariff costs this year for Tiger Balm products, said Matt Chin, Prince of Peace president. At least some of that may be passed onto consumers, but not for now. 

“We’re adopting a more measured approach,” Chin said. “Our customers rely on us, and we want to hold off on raising prices.”

Har Paw Corp., a pharmaceutical company based in Singapore, is the headquarters for Tiger Balm products. But the American product comes out of China, and sells more than $30 million worth of the ointment in the U.S annually. Har Paw didn’t respond to requests for comment.

The bruising trade war between the U.S. and China is slamming into American businesses that import popular global products for which there are no clear substitutes.

Redolent of camphor and menthol, Tiger Balm was first developed in the late 19th century and is used to relieve ailments from muscle aches to colds and headaches. In recent years, the product has found international appeal, gaining endorsement from basketball’s Jeremy Lin and pop star Lady Gaga.  

Trump roiled global markets last month when he imposed punishing reciprocal tariffs on imports from 90 nations, including more than a dozen from Asia. He has since announced a 90-day pause on the additional levies for most countries — while keeping in place a 10% baseline rate — but raised the tax on Chinese imports to 125%. China has retaliated by hiking up tariffs on American goods from 84% to 125%. 

The current rate for pharmaceutical imports, which form the backbone of Prince of Peace’s inventory, are set at 20%, and they’re exempt from new reciprocal tariffs. But Trump has vowed to impose “major tariffs” on the products soon. 

Prince and Peace supplies Tiger Balm to chains like CVS and Walmart as well as local pharmacies. Chin said the company has continued to place inventory and absorbed rising tariff costs. So far, there’s been no change in demand because the company hasn’t raised prices. But the challenge is that big box retailers often require price changes to be announced 90 days in advance, Chin said. 

“If Walmart, for example, won’t make an exception for the price increase due to tariffs, that means as the seller we would have to eat the difference,” he said.

Prince of Peace also carries hundreds of ginseng products, herbal teas and other health supplements imported from China that have no Western alternatives.  

Research has shown that tariff costs are borne mostly by U.S. consumers and businesses. New tariffs on China affect about 13% of U.S. imports and may cost consumers up to $25 billion annually, according to a report from the center-right economics research nonprofit American Action Forum. In 2018, when Trump implemented sweeping tariffs during his first term, the U.S. lost roughly $7.2 billion in real income.

Yan Liang, a professor of economics at Willamette University in Oregon, said specialty goods like Tiger Balm and ginseng don’t compete with U.S. manufacturing and jobs. Rather, they create jobs and revenue in the service sector.

“Distributors may have to absorb some of the rising costs so prices don’t have to rise too much to deter consumers,” Liang said. “In both scenarios, these small Chinese American distributors are being squeezed.”

Chin is also the president of the Oriental Food Association, which represents more than 40 Asian food importers and distributors in Northern California. He said the group has been engaging with trade representatives and the Chinese consulate in San Francisco for more clarity about the economic outlook of the tariffs. 

Smaller herbal shops and medicine halls in Chinatowns across the U.S., Chin said, are taking a bigger hit from the tariffs as they run on narrower margins. But he is optimistic that the Chinese American business community will weather the storm, as it did in 2018, when Trump imposed up to 25% tariffs on imported Chinese goods.

“It’s definitely a blow to morale,” Chin said, “but we’re strong and will get through these setbacks as a whole.” 

Businesses dealing with the early stages of President Donald Trump’s tariffs are looking for ways to pass increasing costs onto consumers, according to a Federal Reserve report Wednesday.

As Trump ordered against-the-board levies on U.S. imports and higher duties on Chinese products, the Fed’s Beige Book indicated how they plan to proceed. Companies reported getting notices from suppliers about rising costs, and they looked to find ways not to absorb the increases while noting uncertainty over the ability to pass them along to customers.

“Most Districts noted that firms expected elevated input cost growth resulting from tariffs,” the report said. “Many firms have already received notices from suppliers that costs would be increasing.”

Broadly speaking, the report, which comes out about every seven weeks, characterized economic growth as “little changed” from the March 5 report, though it noted that “uncertainty around international trade policy was pervasive across” the Fed’s 12 districts.

Prices generally rose during the period, which included Trump’s April 2 “liberation day” announcement of the blanket tariffs. Employment was “little changed” amid falling headcounts in government jobs.

“Firms reported adding tariff surcharges or shortening pricing horizons to account for uncertain trade policy,” the report stated. “Most businesses expected to pass through additional costs to customers. However, there were reports about margin compression amid increased costs, as demand remained tepid in some sectors, especially for consumer-facing firms.”

In the New York area, firms reported rising prices particularly in food and insurance along with construction materials. Manufacturers and distributors said they already are adding surcharges due to shipments.

There also were signs of problems in the trade dispute with Canada. Tourists are booking fewer hotel rooms in New York City and at least one tech firm reported losing business contacts in Canada.

“The outlook for service sector firms worsened noticeably, with contacts anticipating a sharp decline in activity in the coming months. Service sector firms reported a major pullback in planned investment,” the report said.

The report also noted the impact that the Elon Musk-led Department of Government Efficiency has had on employment in the Washington, D.C. region. DOGE has sought to pare back the federal workforce, laying off thousands and offering buyouts to others.

While the employment picture overall was “unchanged” for the period, “many federal government workers were laid off or put on administrative leave in recent weeks.”

“These cuts to the federal workforce have impacted businesses throughout the entire district. In addition, federal contractors have laid off workers in response to spending cuts. For example, a research organization headquartered outside the DC-region laid off workers due to contracts being cancelled. Similarly, a Northern Virginia consultancy reduced headcount by 25 percent due to losing half their contracts,” the report added.

Elsewhere in the report, service organizations dependent on government support noted difficulties since the White House began culling through agencies that get federal aid. The report specifically cited food banks in New York as seeing cuts in programs and personnel.

“Contacts at non-profits and other community-based organizations expressed significant concern about the future of federal funding and services support, creating challenges in staffing, strategy, and planning,” the report said.

A gut toxin that’s been linked to colorectal cancers for more than two decades may be contributing to the sharp rise of the disease in younger people, according to landmark research published Wednesday in the journal Nature.

A number of species of harmful gut bacteria — including certain strains of E.coli, Klebsiella pneumoniae and Citrobacter koseri — produce a toxin called colibactin. Since the mid 2000s, studies have repeatedly shown that this toxin can inflict distinct DNA damage on colon cells that’s difficult to repair and can eventually lead to the development of cancer. 

That DNA damage is particularly prominent in people who developed colorectal cancer at a younger age, researchers at the University of California San Diego said Wednesday. The new study sequenced the DNA of colorectal cancer tumors collected from 981 patients in 11 countries around the world, and found that colibactin-related DNA mutations were 3.3 times more common in patients under the age of 40, compared with those over 70. 

“Around 50% of early-onset colorectal cancers in individuals under 40 carried the distinctive signature of colibactin exposure,” senior study author Ludmil Alexandrov, a bioengineering and cellular and molecular medicine professor at UC San Diego, said in an email interview.

The finding could have critical implications for public health amid rising rates of colorectal cancer in young people. Two years ago, the American Cancer Society reported that colorectal cancer diagnoses in patients under 55 had doubled between 1995 and 2019, with rates of advanced disease now increasing by roughly 3% every year in people younger than 50. 

Christopher Johnston, associate professor and director of microbial genomics at MD Anderson Cancer Center, described the connection to colibactin as being potentially crucial to explaining this alarming trend. 

“It may be a critical piece of the puzzle,” Johnston, who was not involved with the new research, said.

According to Alexandrov, the new findings indicate that colibactin’s damaging effects begin in childhood, with the initial DNA changes that lead to tumor formation seemingly occurring during the first decade of life. Lifestyle changes over the past 40 years may be predisposing more children to having a greater abundance of colibactin-producing strains of bacteria in their guts. 

“There are several plausible hypotheses, including early-life antibiotic use, which may allow these strains to establish more easily; dietary shifts such as increased consumption of processed foods or reduced fiber consumption; increased rates of C-section births or reduced breastfeeding; and wider use of early group childcare which could facilitate microbial transmission during a critical developmental window,” Alexandrov said. “Collectively these shifts may be tipping the balance towards early-life acquisition of these microbes.”

At the same time, many questions remain unanswered. 

Dr. Shuji Ogino, a professor of pathology and epidemiology at Harvard University, said it’s still unclear whether some people are simply more susceptible to the DNA-damaging effects of colibactin than others, or whether it can definitely be attributed to specific lifestyle patterns.

Colibactin-producing microbes are also not the only bacteria that have been linked to colorectal cancers. In recent years, both Ogino and Johnston have published studies implicating another gut microbe, called Fusobacterium nucleatum, in the development of the disease. Alexandrov suggested that while colibactin-producing species may cause the initial mutations that drive tumor formation, F. nucleatum may contribute to disease development by enabling the tumor to proliferate and evade the immune system.

However, Johnston said this is another area where more research is needed; the original cause of colorectal cancers may be the result of a combination of microbes and their toxins.

“Microbial interactions could amplify these effects,” he said. “For example, in patients with a hereditary colorectal cancer syndrome called familial adenomatous polyposis, studies have shown that when Bacteroides fragilis co-occurs with colibactin-producing E.coli, DNA damage is significantly enhanced.”

Over the next two to three years, Alexandrov said he and his colleagues are planning to develop a noninvasive test that uses stool samples to determine whether people have had prior exposure to colibactin-producing bacteria. 

“The goal is to identify people who are at elevated risk for developing early-onset colorectal cancer, ideally before any disease has developed,” he said. “We would want to have these people regularly checked.”

Given the wealth of evidence for the role of colibactin in these diseases continues to grow, scientists say that it’s also now important to explore preventive approaches, such as targeted probiotics or vaccines.

“Considering the abundance of reproducible evidence, targeted interventions that seek to eliminate these specific microbes are now warranted,” Johnston said. 

“Vaccination-based approaches are a logical next step, such as the development of a childhood vaccine, potentially with boosters, that generates immune memory against colibactin-producing E. coli,” he said. “The caveat here is that this is a long game, requiring examining the incidence of young-onset colorectal cancer over time in vaccinated individuals, which would take decades.”

WAUKEGAN, Ill. — Witnesses of the 2022 mass shooting at a Fourth of July parade in a Chicago suburb emotionally relived the massacre at the gunman’s sentencing hearing on Wednesday — even though Robert “Bobby” E. Crimo III did not show his face in court.

Crimo, 24, pleaded guilty last month to 69 counts, including 21 counts of murder, for the shooting that killed seven people and wounded nearly 50 more at a July 4, 2022, parade about 30 miles outside of Chicago.

He faces life without the possibility of parole, as Illinois doesn’t have capital punishment.

The over 10 survivors, family members of victims, first responders, and witnesses of the shooting that are expected to make victim impact statements were denied their chance to confront Crimo after Lake County State’s Attorney Eric Rinehart told the court he declined to attend his sentencing and opted to remain in jail.

Lake County Judge Victoria Rossetti stated that the defendant had been informed that sentencing would proceed with or without him in previous court appearances.

Dana Ruder Ring, a Highland Park mother, was among the first to make a statement for the court, recalling how she helped a little boy to safety as Crimo opened fire.

Crimo opened fire from a building rooftop into crowded streets below at about 10:14 a.m. on the day of the shooting, officials said.

In the chaos, Ring said she came across a woman and child, both covered in blood, as the woman handed her the baby and said: “Blood’s not ours, baby is not mine.”

Ring said she wrapped the boy in a blanket and eventually reunited him with his family.

The boy “was covered in blood” and “he had one shoe missing,” she recalled.

“I was just in mom mode,” as she cared for him, Ring told the court.

People in the Lake County courtroom took deep sighs, wiped their eyes, and covered their mouths as prosecutors showed pictures and videos of that horrific summer day.

Crimo killed Stephen Straus, 88; Nicolas Toledo-Zaragoza, 78; Eduardo Uvaldo, 69; Katherine Goldstein, 64; Jacquelyn Sundheim, 63; and married couple Kevin McCarthy, 37, and Irina McCarthy, 35.

Gerald Cameron Jr., a retired commander of investigations for the Highland Park Police Department, told the court about “rhythmic pace at which point I believed to be gunfire” as parade attendees “frantically, panicked.”

“People were still running, yelling, screaming for help,” Cameron told the court in his victim impact statement.

This is a developing story. Please check back for updates.

Samira Puskar reported from Waukegan, Ill., and David K. Li from Los Angeles County.

Treasury Secretary Scott Bessent said Wednesday that while the Trump administration was committed to playing an active role in global financial institutions, it remained focused on addressing large trade imbalances — especially with China, whose economic model Bessent called “unsustainable.”

Bessent’s remarks came amid some growing optimism that President Donald Trump has begun to show signs of softening his tariff push as well as his attacks on Fed Chair Jerome Powell. But Bessent did little to indicate a near-term change to the combative stance with the rest of the world that Trump has taken since returning to office.

While Bessent said that “more than 100 countries” have now approached the U.S. to address trade imbalances, he reasserted a key Trump talking point that the rest of the world — as well as past U.S. presidents — were responsible for harming America’s heartland.  

“For decades, successive administrations relied on faulty assumptions that our trading partners would implement policies that would drive a balanced global economy,” Bessent said. “Instead, we face the stark reality of large and persistent U.S. deficits as a result of an unfair trading system.”  

He continued: “Intentional policy choices by other countries have hollowed out America’s manufacturing sector and undermined our critical supply chains, putting our national and economic security at risk.”

Trump has said he views America’s large trade deficits as a sign that the country is being “ripped off” — a view that other economic commentators dispute, saying the deficits merely reflect that the U.S. simply consumes more goods from around the world than it produces.

The deficit is especially large with China. And while Trump had raised the tariffs rate against imports from that country to as high as 145%, Bessent has signaled the administration’s aggressive posture toward China would likely relax, telling a group of investors Tuesday that the administration was now looking for a “de-escalation” with China, adding that the current situation was “not sustainable,” according to CNBC.

On Wednesday, The Wall Street Journal reported that the White House was now looking to slash potential tariffs by as much as half, with stiffer duties left in place for essential goods — though all would be phased in more slowly.

In response, a White House spokesperson said the administration continued to negotiate with China. 

“President Trump has been clear: China needs to make a deal with the United States of America,” White House spokesman Kush Desai said in a statement. “When decisions on tariffs are made, they will come directly from the President. Anything else is just pure speculation.” 

While the likely softening toward China has helped settle markets, investors remain skittish about the precedent set by Trump’s erratic policymaking.

Other global players are looking to step into the breach Trump has created. In Wednesday remarks, a European Union official said the region was using its “predictability as a strength” as it sought stronger relations with other nations.

“In times of turmoil, predictability, the rule of law and upholding the rules-based international order become Europe’s greatest assets,” said Valdis Dombrovskis, the EU’s Commissioner for Economy and Productivity, in a post on X.

He also told the Wall Street Journal that the EU would not budge on its value-added tax, nor on the agricultural subsidies it provides to the region’s farmers — both targets of Trump criticisms.

Bessent, a former hedge fund manager, has been viewed as the White House’s key liaison to Wall Street. He and Commerce Secretary Howard Lutnick were instrumental in persuading Trump to pursue a 90-day pause in the country-by-country tariffs Trump announced earlier this month. Key U.S. financial figures seemed to have been aware the Bessent’s stock was rising as the White House wrestled with the market meltdown that the tariffs’ announcement had set off.

“Let Scott take the time” to negotiate, JP Morgan CEO Jamie Dimon told Fox News Business just before the pause was announced April 9.

A week later, Bessent told Bloomberg TV that the worst of the market volatility had “likely peaked” as he signaled an “orderly process” on tariff negotiations ahead.

Bessent has also come out ahead after an apparent power-struggle with Elon Musk culminated last week in the replacement of Musk’s pick to head the Internal Revenue Service by a Bessent deputy — just days after the Musk choice had been appointed.  

“Trust must be brought back to the IRS, and I am fully confident that Deputy Secretary Michael Faulkender is the right man for the moment,” Bessent said in a statement, adding that Gary Shapley would remain a top adviser to him on IRS reform.

Sen. Dick Durbin, D-Ill., announced Wednesday that he will not seek re-election in 2026, ending his decadeslong career in Congress.

The decision from Durbin, who is the second-ranking Democrat in the Senate and the ranking member of the Judiciary Committee, will open up a leadership position in the chamber and is expected to set off a competitive primary for his seat in solidly blue Illinois.

“The decision of whether to run for re-election has not been easy. I truly love the job of being a United States Senator. But in my heart, I know it’s time to pass the torch,” he said in a statement Wednesday and video posted to social media. “So, I am announcing today that I will not be seeking re-election at the end of my term.”

Durbin, 80, is tied for the fifth-most senior member of the Senate, having been elected in 1996. Prior to that, Durbin represented Illinois in the House for 14 years.

His decision to step aside creates a vacancy that Illinois Democrats will likely scramble to fill, with a deep bench of federal and local lawmakers who could be contenders for the seat.

A progressive group, 314 Action, recently released a hypothetical poll testing a possible Democratic primary field that included Reps. Lauren Underwood, Raja Krishnamoorthi and Robin Kelly, as well as Lt. Gov. Juliana Stratton. The group, which supports candidates from science and technology backgrounds, has backed Underwood in the past.

Krishnamoorthi has been stockpiling money for years, stoking speculation about a future bid for higher office. H ended the first fundraising quarter of the year with more than $19 million banked away in his campaign account.

Underwood’s campaign closed the same period with $1.1 million to Kelly’s $2 million. And Stratton has dipped her toes into federal politics recently, launching a federal political action committee earlier this year.

Adding to the uncertainty in Illinois, Democratic Gov. JB Pritzker hasn’t confirmed whether he plans to run for re-election next year as he continues to focus heavily on countering President Donald Trump. If he decides to leave the governor’s mansion ahead of a potential 2028 presidential bid, that open seat could draw significant interest among Democrats, too.

Durbin’s seat is expected to remain in Democratic hands, even though Trump made gains in the state in November. Then-Vice President Kamala Harris won Illinois by 11 percentage points, with 54% of the vote.

Senate Minority Leader Chuck Schumer, D-N.Y., who once waged a rivalry with Durbin for the conference leader, praised his work.“His deep commitment to justice, his tireless advocacy for Americans in need, and his wisdom in leadership have left an indelible mark on this institution, the United States, and his beloved Illinois,” Schumer said. “The Senate—and the country—are better because of his service.”

Other Senate Democrats offered praise for Durbin’s congressional career on Wednesday.

“For more than four decades, Senator Dick Durbin has been “a pillar of leadership, integrity, and unwavering dedication to the people of his home state of Illinois and the nation,” Sen. Brian Schatz, D-Hawaii, a leadership member, said in a statement.

LOS ANGELES — A group of California homeowners is taking on insurance companies that they say illegally coordinated to deny coverage to fire-prone areas, leaving thousands of displaced residents drastically underinsured as they fight for funding to rebuild.

The homeowners, many of whom were affected by the recent wildfires that torched large swaths of Los Angeles, have filed a lawsuit alleging that California insurance companies colluded in a “nefarious conspiracy” to shut out high-risk homeowners from the insurance market.

The complaint, filed Friday in Los Angeles County, accuses dozens of major insurance companies and their subsidiaries of collaborating in a “group boycott” of certain areas to eliminate competition and force homeowners toward the state’s insurer of last resort, a program known as the California FAIR Plan.

The lawsuits name California’s largest home insurers, including State Farm, Farmers, Berkshire Hathaway, Allstate and Liberty Mutual. None of them have provided a comment on the allegations.

The FAIR Plan has its own reserves and is intended to provide basic insurance to residents who cannot find a policy through the private marketplace. While it was created by the governor and the Legislature, and the state’s insurance commissioner has oversight, it is not a public program. The insurance companies named in the lawsuit jointly own and operate the FAIR plan, offering terms that limit their risk and place a higher burden on policyholders.

“They knew that they could force people, by dropping insurance, into that plan which had higher premiums and far lower coverages,” Robert Ruyak, an attorney with Larson LLP, the law firm that brought the complaint, said. “They realized that they could take this device, which is to protect consumers, and turn it into something that protected them.”

Ruyak argues the insurance companies knew they could limit their liability by directing policyholders onto the FAIR Plan, which allows companies to recoup up to half of their losses through premium increases, by agreeing that no company would insure high-risk areas.

“All of these insurance companies participate in the California FAIR Plan. They own it and manage it. It is not a California entity, it is not even a separate entity … the only way this scheme would work is if no one would pick up a dropped policy at any price, on any terms. And that’s what happened.”

Millions of U.S. homeowners have in recent years struggled to buy property insurance as companies have increasingly declined to offer coverage to people who live in high-risk areas, particularly as climate change has supercharged some natural disasters. An NBC News analysis in 2023 found that a quarter of all U.S. homes may be at risk of a climate-induced insurance shock.

California has been among the hardest hit by what some have called an “insurance crisis.” The state’s FAIR Plan, meanwhile, has been the subject of growing scrutiny and frustration from insurance regulators and customers.

The plaintiffs are asking for a jury trial and seeking payment for three times their damages. 

A separate class-action lawsuit filed Friday makes similar allegations.

U.S. stocks opened higher Wednesday after President Donald Trump signaled a softer stance toward the eye-watering tariffs he had set for China, while also stating he would not make an immediate change in leadership at the Federal Reserve.

Investors were also cheered by Elon Musk’s imminent return to a more full-time focus on Tesla, dialing back his controversial stint as a Trump White House adviser to one to two days a week.

The S&P 500 climbed 2.5% in early-morning trading. The tech-focused Nasdaq surged 3.5%. Dow Jones Industrial Average gained 750 points or about 1.9%.

Investors also increased demand in U.S. government bonds, lowering borrowing costs — an explicit goal of the Trump administration.

Trump told reporters Tuesday evening that the China tariffs, which on paper have reached as high as 145%, would “come down substantially” as he looked to secure a trade deal.

Those remarks came after Treasury Secretary Scott Bessent told a group of investors earlier in the day that the administration was looking toward “de-escalation” with China. “No one thinks the current status quo is sustainable,” he said according to CNBC, which cited a person present at the investor gathering hosted by JP Morgan.

Trump also said Tuesday he had “no intention” of firing Federal Reserve Chair Jerome Powell, despite calling him a “major loser” and “Mr. Too Late” the day before — a reference to what Trump perceives as dawdling in lowering interest rates.

Economists had warned that any threat to the central bank’s independence would upend global markets and cause U.S. borrowing rates to surge.

With Wednesday’s gains, stocks will have climbed about 8% over the past week and a half.

Yet they remain about 13% off of the highs seen in January, just after Trump’s inauguration. Markets remain bruised — perhaps indefinitely so — by Trump’s erratic policymaking.

Trump changes-of-mind have been a constant of his second term, and there was nothing to suggest that the latest evolution of his thinking would be final.

“With investor concerns growing, U.S. President Trump demonstrated the art of the retreat,” Paul Donovan, chief economist of UBS Global Wealth Management, said in a note to clients.

He continued: “Nonetheless, the erratic threaten-retreat-threaten-retreat cycle has economic consequences. The uncertainty this causes may impact consumer and business decision-making.”

Some commentators believe a more lasting shift by foreign investors away from holding U.S. assets has already begun.

“The U.S. faces a coming adjustment to a lower pace of foreign capital inflows to US asset markets,” Bob Elliott, co-founder, CEO and chief investment officer at the Unlimited Funds asset management group, said in a post on X Wednesday.

Meanwhile, tech stocks were poised to get a significant boost from comments by Musk, the CEO of the electric carmaker Tesla, during the company’s first-quarter earnings report to investors Tuesday afternoon.

While the company said profits had shrunk dramatically in the first-three months of the year, Musk said he was actively winding down his role advising the Department of Government Efficiency, the quasi-official Trump project that has upended the federal workforce.

Before the market open at 9:30 a.m., Tesla shares were up as much as 7%.

“Musk made a huge move forward as his time in DOGE/White House now winds down and he will be laser focused on Tesla again,” Dan Ives, managing director at Wedbush Securities, said on X Wednesday. “Musk finally read the room and made a pivot which helps remove the black cloud over Tesla. New chapter begins.”

Ives said his new long-term price target for Tesla’s stock was $350; as of Tuesday, the stock had closed at about $238, implying a 47% gain.

Others remained cautious that Tesla could recover in a short amount of time from the 50% drop its share price has seen over the past several months. On the earnings call with investors, Musk said the company was still on track to roll out commercially viable robotaxis, humanoid robots and full-self-driving capabilities.

“We remind investors that TSLA has historically delivered stunning technical achievements, but often delivered later than initially promised,” analysts with the Truist financial group said in a note to clients. “We maintain an open mind.”

A massive wildfire continued to burn in New Jersey on Wednesday, spanning over 8,500 acres and prompting the evacuation of 3,000 people, which snarled traffic and sent huge plumes of black smoke billowing into the sky. 

The Jones Road Wildfire started in the Greenwood Forest Wildlife Management area in Ocean County on Tuesday afternoon and exploded in size to 8,500 acres by 10:30 p.m., the New Jersey Forest Fire Service said. 

The blaze was fueled by strong 25 mph gusts that whipped through the area. As of Tuesday evening, the fire is only 10% contained. 

The cause of the fire remains under investigation. But long-term drought conditions, strong winds, and warm weather contributed to its spread.

Acting New Jersey Governor Tahesha Way declared a state of emergency effective at 7 a.m. Wednesday, in response to the fire in Ocean County. 

The inferno threatens 1,320 structures and has prompted the evacuation of 3,000 residents from Ocean and Lacey Townships in Ocean County.

Ocean Township and Lacey Township police said all mandatory evacuation orders were lifted as of 6:30 a.m. Wednesday. 

More than 25,000 customers don’t have electricity on Wednesday morning after officials turned off power to keep fire crews safe.

“Power is expected to remain out with no timetable for return. Crews are actively surveying their infrastructure for damage,” Ocean Township police said.  

Ocean Township reported no structural damage from the fire, but Lacey Township did report some.

The fire also triggered a major traffic slowdown Tuesday evening with road closures along the Garden State Parkway. This morning, the New Jersey State Police announced that the Garden State Parkway and Route 9 near the fire zone are now open again.

Harrowing videos and photos shared on social media show orange flames consuming the forest area, and thick orange and black smoke rising into the sky.

There are high fire danger conditions in central and southern Jersey on Wednesday. However, there is some respite with cooler temperatures and lighter winds. Relative humidity will be in the 20-40% range.

This morning, the smoke will impact areas across southern New Jersey, including Atlantic City. By the afternoon, a 180-degree wind shift will push smoke north toward the New York City metro area by tonight. By Thursday morning, smoky skies are possible for New York City, parts of Long Island, and north-central New Jersey.

The New Jersey Forest Fire Service will hold a fire update at 11 a.m.