US Midterms Loom as Iran Conflict Sparks Debate; VW Cuts 50,000 Jobs

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Hello, this is Leonie Kidd coming to you from London.

The midterms are looming, and the war with Iran has become a key campaign issue as voters go to the polls.

The state of the economy and the jobs market will also determine how voters approach this election, due to be held on November 3.

U.S. Vice President JD Vance has weighed in on both overnight, and the response has been mixed.

Read on for more.

What you need to know today

"I wouldn't call it a war." The words of U.S. Vice President JD Vance when asked if America's conflict with Iran would be over before the midterm elections in November. "Right now there is no active shooting. I recognize there's been places where this has flared up," he said, while declining to provide a timeline for when hostilities could cease.

His comments drew sharp criticism from Democrats, with Congresswoman Yassamin Ansari taking to X.com to describe it as "profoundly disrespectful to the loved ones of the 18 American service members who've died for Trump's war of choice."

On Thursday, President Donald Trump himself called it a war, in a Truth Social post saying, "the people and Media Outlets that keep harping on the fact that we have no ammunition (And they are 100% wrong!), are actually treasonous. They do it because they would rather see the United States LOSE a War that we're easily WINNING, than see me WIN!"

Rate pressure

Vance also weighed in on the path of interest rates, saying he believed the Federal Reserve should be lowering rates, adding, "we're doing a lot of things to try to keep those interest rates down, but it would be nice to have some help from the Federal Reserve."

The Fed is due to hold its next rate-setting meeting on September 15-16. Last week, Chairman Kevin Warsh said he is committed to bringing the inflation rate back down to the Fed's 2% target and sees interest rates as the key tool to rein it in.

Watch Squawk Box Europe for the view from Allianz Chief Economic Advisor Mohamed El-Erian, catch that interview here.

Jobless summer?

The big data point for Friday will be the August jobs report. Nonfarm payrolls are expected to increase by 53,000 following what is being called a "jobless summer." The figures for last month, alongside weaker counts for June and July, suggest a labor market that is in a low-hire, low-fire pattern.

Ahead of that release, U.S. futures are little changed after a relatively flat session on Wall Street on Thursday.

VW's drastic changes

In corporate news, the board of German auto giant VW has approved a large-scale restructuring plan which will include cutting another 50,000 jobs. The massive reset comes as the group tackles competition from China and the impact of trade tariffs.

Earlier this week, CNBC spoke to VW's union representative; catch that interview here.

— Leonie Kidd

And Finally...

Revenge of the ‘Magnificent Seven’ — Jim Cramer says it’s time to buy

CNBC's Jim Cramer said Thursday it's time to revisit the "Magnificent Seven," declaring that months of underperformance have made many of these former market leaders too cheap to ignore.

"We're witnessing the revenge of the Magnificent Seven and most people don't even seem to know it," the "Mad Money" host said. "I think it's time to buy."

Stocks like Dell and Snowflake have surged this year, while many of the Mag 7 have fallen behind — even trailing the overall market as measured by the S&P 500′s year-to-date gain of 13%.

With the exception of Apple, Cramer said Amazon, Alphabet, Meta, Microsoft and Tesla have become relative laggards as investors gravitated toward newer winners. Nvidia, like Apple, is beating the market, year to date, but its price-to-earnings multiple is so cheap that Cramer lumped it in with the rest.

"We have to go back and pick at this market's old leadership, the forgotten Mag Seven, because a lot of them have gotten real cheap," he explained.

— Alexa LoMonaco