WASHINGTON (AP) — Israeli military strikes are targeting Iran’s armed allies across a nearly 2,000-mile stretch of the Middle East and threatening Iran itself. The efforts raise the possibility of an end to two decades of Iranian ascendancy in the region, to which the 2003 U.S. invasion of Iraq inadvertently gave rise.

In Washington, Tel Aviv and Jerusalem, and Arab capitals, opponents and supporters of Israel’s offensive are offering clashing ideas about what the U.S. should do next, as its ally racks up tactical successes against Hezbollah in Lebanon and the Houthis in Yemen and presses its yearlong campaign to crush Hamas in Gaza.

Israel should get all the support it needs from the United States until Iran’s government “follows other dictatorships of the past into the dustbin of history,” said Richard Goldberg, a senior adviser at Washington’s conservative-leaning Foundation for the Defense of Democracies — calls echoed by some Israeli political figures.

Going further, Yoel Guzansky, a former senior staffer at Israel’s National Security Council, called for the Biden administration to join Israel in direct attacks in Iran. That would send “the right message to the Iranians — ‘Don’t mess with us,’” Guzansky said.

Critics, however, highlight lessons from the U.S. military campaign in Iraq and toppling of Saddam Hussein, when President George W. Bush ignored Arab warnings that the Iraqi dictator was the region’s indispensable counterbalance to Iranian influence. They caution against racking up military victories without adequately considering the risks, end goals or plans for what comes next, and warn of unintended consequences.

Ultimately, Israel “will be in a situation where it can only protect itself by perpetual war,” said Vali Nasr, who was an adviser to the Obama administration. Now a professor at Johns Hopkins School of Advanced International Studies, or SAIS, he has been one of the leading documenters of the rise of Iranian regional influence since the U.S. invasion of Iraq.

With Israeli Prime Minister Benjamin Netanyahu giving limited weight to Biden administration calls for restraint, the United States and its partners in the Middle East are “at the mercy of how far Bibi Netanyahu will push it,” Nasr said, referring to the Israeli leader by his nickname.

“It’s as if we hadn’t learned the lessons, or the folly, of that experiment … in Iraq in 2003 about reshaping the Middle East order,” said Randa Slim, a fellow at SAIS and researcher at the Washington-based Middle East Institute.

Advocates of Israel’s campaign hope for the weakening of Iran and its armed proxies that attack the U.S., Israel and their partners, oppress civil society and increasingly are teaming up with Russia and other Western adversaries.

Opponents warn that military action without resolving the grievances of Palestinians and others risks endless and destabilizing cycles of war, insurgency and extremist violence, and Middle East governments growing more repressive to try to control the situation.

And there’s the threat that Iran develops nuclear weapons to try to ensure its survival. Before the Israeli strikes on Hezbollah, Iranian leaders concerned about Israel’s offensives had made clear that they were interested in returning to negotiations with the U.S. on their nuclear program and claimed interest in improved relations overall.

In just weeks, Israeli airstrikes and intelligence operations have devastated the leadership, ranks and arsenals of Lebanon-based Hezbollah — which had been one of the Middle East’s most powerful fighting forces and Iran’s overseas bulwark against attacks on Iranian territory — and hit oil infrastructure of Yemen’s Iran-allied Houthis.

A year of Israeli airstrikes in Gaza appears to have reduced the leadership of Iranian-allied Hamas to a few survivors hiding in underground tunnels. However, Israeli forces again engaged in heavy fighting there this week, and Hamas was able to fire rockets at Tel Aviv in a surprising show of enduring strength on the Oct. 7 anniversary of the militant group’s attack on Israel, which started the war.

Anticipated Israeli counterstrikes on Iran could accelerate regional shifts in power. The response would follow Iran launching ballistic missiles at Israel last week in retaliation for killings of Hezbollah and Hamas leaders.

It also could escalate the risk of all-out regional war that U.S. President Joe Biden — and decades of previous administrations — worked to avert.

The expansion of Israeli attacks since late last month has sidelined mediation by the U.S., Egypt and Qatar for a cease-fire and hostage release deal in Gaza. U.S. leaders say Israel did not warn them before striking Hezbollah leaders in Lebanon but have defended the surge in attacks, while still pressing for peace.

Vice President Kamala Harris, the Democratic presidential nominee, said in an interview with CBS’ “60 Minutes” aired Monday that the U.S. was dedicated to supplying Israel with the military aid needed to protect itself but would keep pushing to end the conflict.

“We’re not going to stop in terms of putting that pressure on Israel and in the region, including Arab leaders,” she said.

Israel’s expanded strikes raise for many what is the tempting prospect of weakening Iran’s anti-Western, anti-Israel alliance with like-minded armed groups in Lebanon, Iraq, Syria and Yemen to governments in Russia and North Korea.

Called the “Axis of Resistance,” Iran’s military alliances grew — regionally, then globally — after the U.S. invasion of Iraq removed Saddam, who had fought an eight-year war against Iran’s ambitious clerical regime.

Advocates of the U.S. invasion of Iraq, and overthrow of Saddam, said correctly that an Iraqi democracy would take hold.

But the unintended effects of the U.S. intervention were even bigger, including the rise of Iran’s Axis of Resistance and new extremist groups, including the Islamic State.

“An emboldened and expansionist Iran appears to be the only victor” of the 2003 Iraq war, notes a U.S. Army review of lessons learned.

“Two decades ago, who could have seen a day when Iran was supporting Russia with arms? The reason is because of its increased influence” after the U.S. overthrow of Saddam, said Ihsan Alshimary, professor of political science at Baghdad University.

Even more than in 2003, global leaders are offering little clear idea on how the shifts in power that Israel’s military is putting in motion will end — for Iran, Israel, the Middle East at large, and the United States.

Iran and its allies are being weakened, said Goldberg, at the Foundation for the Defense of Democracies. So is U.S. influence as it appears to be dragged along by Israel, Nasr said.

The conflict could end up hurting Israel if it bogs down in a ground war in Lebanon, for example, said Mehran Kamrava, a professor and Middle East expert at Georgetown University in Qatar.

After four decades of deep animosity between Israeli and Iranian leaders, “the cold war between them has turned into a hot war. And this is significantly changing — is bound to change — the strategic landscape in the Middle East,” he said.

“We are certainly at the precipice of change,” Kamrava said. But “the direction and nature of that change is very hard to predict at this stage.”

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AP reporters Julia Frankel in Jerusalem and Qassim Abdul-Zahra in Baghdad contributed.

S&P Dow Jones Indices has tweaked the methodology for its 11 Select Sector indices tracked by $300bn in exchange traded funds in response to large market swings in the technology industry, the index provider has disclosed.

The rebalance was the result of concerns within S&P regarding the continued growth of certain technology stocks such as Apple, Microsoft and Nvidia, the company noted in a September 10 article on its website.

Some 42 ETFs with a combined $303.6bn in assets track Select Sector Indexes, according to data from Morningstar Direct.

The largest of those funds is State Street Global Advisors’ $69bn Technology Select Sector SPDR ETF, which tracks the S&P Technology Select Sector index, Morningstar data shows.

This article was previously published by Ignites, a title owned by the FT Group.

Market swings impacting that index appear to be the primary motivation behind the changes, S&P noted on its website.

Four other ETFs also track that index: the $3.2bn Direxion Daily Technology Bull 3X, $698mn ProShares Ultra Technology, $104mn Direxion Daily Technology Bear 3X and $5mn ProShares UltraShort Technology ETFs.

The five ETFs garnered a combined $4.1bn in net inflows during the year that ended August 31, Morningstar data shows.

Overall, the 42 Select Sector index-tracking ETFs recorded $467mn in combined net inflows during the same period.

S&P’s 11 Select Sector indices are market-cap weighted and aim to have the right mix of companies from the benchmarks they follow, their methodologies note.

To qualify as a registered investment company, no more than 25 per cent of an ETF’s assets may be invested in a single issuer and the sum of the weights of all issuers representing more than 5 per cent of the fund, dubbed “larger companies,” should not exceed 50 per cent of the fund’s assets, Zachary Evens, research analyst at Morningstar, wrote in note explaining the process.

Under the old methodology, if a group of large companies were to account for more than 50 per cent of the index weight, the index would reduce the weight of the smallest company in the group to 4.5 per cent, the S&P website states. The process would repeat iteratively, if necessary, until there were no breaches of the thresholds.

But the growth of large tech stocks has caused this mechanism to lead to “flip flops” in index weights twice this year, S&P noted.

Apple, Microsoft and Nvidia each had weights greater than 4.8 per cent, and their collective weight exceeded 50 per cent as of March 2024. As the smallest of the three companies at the time, Nvidia’s weight was reduced to 4.5 per cent.

But in June 2024, Nvidia had become the second-largest of the group, “reflecting investors’ expectations of the impact of AI on the company’s growth prospects,” S&P noted.

As such, Apple had its index weight reduced by 17 per cent at the June rebalance, while Nvidia’s weight increased by 15 per cent to around 21 per cent.

“The Technology Select Sector SPDR ETF was forced to sell roughly $10bn of Apple and buy nearly as much of Nvidia after the former’s market cap was supplanted by the latter,” Morningstar’s Evens noted in his report.

Under Monday’s new capping mechanism, the aggregate weight of the larger companies will be reduced to 45 per cent from 50 per cent, and the larger companies’ individual weights will be determined by their relative proportions, after checking for any breaches in the single company cap.

The minimum index weight of each of the larger companies is now 4.5 per cent.

The new system should be enough to quell regulatory concerns, Evens told Ignites.

“There are buffers built into the methodology to prevent the portfolio from running afoul of the diversification rule,” he wrote in an email.

The new rules should not cause any structural or mechanical issues, he noted, but investors might be concerned with the “relative underweighting” of the tech market’s largest holdings compared to an uncapped technology index, Evens wrote.

“An uncapped index wouldn’t satisfy the diversification rule but would be more representative of the technology sector,” he added.

While the updated methodology will reduce the index’s reliance on its two largest holdings, diversification is improved, reducing single-stock risk, Evens said. Performance will still be steered heavily by the sector’s largest stocks, he added.

*Ignites is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at ignites.com.

WATER companies have been ordered to return £158million to customers after failing to meet pollution targets.

The industry regulator, Ofwat, announced the rebate following its annual review of the performance of water and wastewater companies in England and Wales.

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Each year, Ofwat evaluates the performance of the 17 largest water and wastewater companies in England and Wales against key targets, including sewer flooding, supply interruptions, and water leaks.

For the second consecutive year, no company attained the highest rating, although four companies demonstrated improvement compared to the previous year.

As a result, millions of customers at 13 water companies could see their bills slashed next year as the watchdog issues penalties.

Customers at the following water firms will benefit:

• Thames Water
• Anglian Water
• Yorkshire Water
• Southern Water
• Welsh Water
• South West Water
• South East Water
• Wessex Water
• Affinity Water
• Bristol Water
• Portsmouth Water
• South Staffs Water
• Hafren Dyfrdwy

David Black, chief executive of Ofwat, said: “This year’s performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.  

“It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings. 

“Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues.

“However, we are beginning to see that some companies are beginning to change their culture and adopt a more innovative and forward-thinking approach to tackling pollution.

Only four water companies have not faced a penalty from the regulator, meaning customers at the following firms won’t recieve a rebate next year:

• SES Water
• Northumbrian Water
• Severn Trent Water
• United Utilities

The leaders of several Central Asian countries will be gathering to mark the 300th anniversary of the birth of the 18th-century poet Magtymguly Pyragy. Putin’s attendance had not been previously announced.

Last week, Russian Prime Minister Mikhail Mishustin visited Iran for discussions with Pezeshkian and Iran’s First Vice President Mohammad Reza Aref.

These talks come as Israel intensifies its airstrikes on Lebanon, targeting the Iran-backed Hezbollah, while Russia has evacuated some of its citizens from the region.

Russia maintains close ties with Iran, though Western governments have accused Tehran of supplying Moscow with drones and missiles—claims Iran has repeatedly denied.

Pezeshkian is also scheduled to visit Russia later this month for further talks with Putin, as part of his participation in a BRICS summit of emerging economies.

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Princeton University has reversed a policy that had sharply constrained the funding of academic research by fossil fuel companies, after pressure from faculty members and concerns that the rules risked hindering work on environmental challenges.

Environmental campaigners criticised the move as Princeton had gone further than most of its peers in moving to divest oil, gas and coal groups from its endowment and “dissociate” its research from fossil fuel company funding.

In a letter to its academic staff first reported in the student newspaper, three senior university officials said the rules Princeton adopted just two years ago “adversely and inequitably affected scholars whose research programs are addressing pressing environmental problems”.

“They lost not only outside funding for research to combat the harms of climate change, but also access to collaborative partnerships focused on important work that is aligned with the university’s values,” the officials wrote.

Under its new approach, Princeton’s endowment will maintain its commitment to divest from fossil fuel companies, but faculty members will have discretion to accept funding from them for specific research projects “aimed towards the amelioration of the environmental harms of carbon emissions” as long as they retain academic freedom to publish results.

As of January, Princeton had severed funding links with 29 companies since the rules were implemented in 2022. The list of fossil fuel groups that it had identified for possible “dissociation” had surged since then, from 90 to 2,371, although it had no links with most of them.

The university said it would no longer update a tally of companies it would dissociate from, which included BHP, ConocoPhillips and ExxonMobil, but it would continue to disclose all external funders and how much they have given each year.

Its most recent report on research sponsorships shows contributions including nearly $3.4mn from BP, $848,000 from ExxonMobil and $120,000 from Shell in 2023.

An investigation by congressional Democrats published this year found several examples of oil majors partnering with universities to boost their business strategies, including a BP spreadsheet that rated how research plans at Princeton, Harvard and Tufts aligned with its priorities. 

Stephen Pacala, who has directed the Carbon Mitigation Initiative, a BP-Princeton partnership, for 25 years, stressed that his academic integrity was never threatened.

“I have published perhaps a thousand papers, and never one on how to get more fossil fuel out of the ground. They have all been about climate change and the energy transition,” he said.

Princeton’s decision comes as universities face growing calls from students and faculty to disclose and sever their research ties to fossil fuel companies. Columbia recently organised a committee to consider its future acceptance of fossil fuel funding.

In June, however, a Stanford University committee recommended against dissociating from the industry, warning it could have an “inhibiting effect” on academic freedom.

Alicia Colomer, managing director of the Campus Climate Network, formerly Fossil Free Research, called Princeton’s shift a setback to the dissociation movement and warned its new guardrails risked justifying “false industry-friendly solutions”.

“Students are really going to need to organise their campuses and raise the stakes for universities to take that step because now there’s not as much of a precedent to point to within the US,” she said. 

Alexander Norbrook, a student with the activist group Sunrise Princeton, said: “It’s complete hypocrisy. They acknowledge companies are violating core university values and yet still take their money. That’s selling off values for short-term financial gain.”

Princeton tax filings show that the university directly owns Petrotiger, a private investment company that holds stakes in energy companies. Its commitment to divest from fossil fuel groups shields Petrotiger because it only covers public companies.

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