Axios

China's massive live-fire military exercises this week in the air and seas around Taiwan come as the calendar flips one year closer to a date that looms larger for Pentagon planners than almost any other.

Why it matters: The U.S. military has been operating for the past five years under the assumption that the Chinese military is preparing to take Taiwan by force as soon as 2027.

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American stocks are underperforming international equities at their widest margin since the great financial crisis.

Why it matters: Investors are looking to increase their exposure outside of the U.S. amid policy uncertainty under the Trump administration and heightened fears over high valuations and an AI bubble.

China's military held massive live-fire drills around Taiwan for a second day on Tuesday, but President Trump said he's not concerned about the action that Beijing launched after expressing anger at a proposed U.S. arms sale to Taipei.

The big picture: Trump told reporters Monday he has "a great relationship" with Chinese leader Xi Jinping "and he hasn't told me anything about" the drills. "Nothing worries me" about the drills, he added. "Nothing. They've been doing naval exercises for 20 years in that area."

President Trump and his top advisers asked Prime Minister Benjamin Netanyahu to change Israel's policies in the occupied West Bank during their meeting on Monday, according to a U.S. official and another source, both with direct knowledge.

Why it matters: While the security situation in the West Bank has deteriorated dramatically, and other Western governments have denounced Israel's policies, the Trump administration has been seen as supportive. This is the first time in his second term that Trump and his team have weighed in at length with Netanyahu about West Bank policy.

President Trump warned Monday there would be "very powerful" consequences for Iran if it rebuilds its ballistic missile or nuclear weapons programs.

Why it matters: Trump made clear during a briefing at his Mar-a-Lago estate with Israeli Prime Minister Benjamin Netanyahu that he wouldn't rule out more military action against Iran.

Israeli President Isaac Herzog swiftly denied President Trump's claim on Monday that he had told the U.S. president he would pardon Prime Minister Benjamin Netanyahu.

Why it matters: Trump has intervened repeatedly in Israel's politics and judicial system by pressuring Herzog to pardon Netanyahu, who faces multiple corruption charges. He did so once again on Monday when Netanyahu arrived to meet him at Mar-a-Lago.

Russian President Vladimir Putin claimed in a call with President Trump on Monday — their second in 24 hours — that Ukraine conducted a drone attack targeting one of his official residences, a claim Kyiv immediately denied.

Why it matters: Putin told Trump that Russia would revise its negotiating position based on the alleged attack, according to Moscow's readout. It's the latest indication the Kremlin is disinclined to accept the deal the U.S. and Ukraine have been negotiating for weeks.

President Trump said after his Sunday meeting with Ukrainian President Volodymyr Zelensky that Ukraine and Russia are "closer than ever" to a peace deal and that 95% of the issues have been settled.

Why it matters: The meeting comes at the height of Trump's diplomatic push to reach a peace agreement aimed at ending the war in Ukraine.

China's military conducted live-fire military drills around Taiwan on Monday in what a Chinese official said marked "a stern warning" against 'Taiwan Independence' separatist forces and external interference."

The big picture: The drills involving the Chinese Army, Navy, Air Force and Rocket Force troops came less than two weeks after the Trump administration announced plans for a $11.1 billion weapons deal with Taipei, which prompted Beijing to impose sanctions on Boeing and other U.S. firms.