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All Living Hostages Held by Gaza Are Returned Home Safely, Reunited With Their Loved Ones; Torrential Rains In Mexico Kills 64 People, 65 Other Missing; Nobel Laureate Shares Theory Of Destruction. Aired 3-4a ET

Aired October 14, 2025 - 03:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[03:00:00]

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ROSEMARY CHURCH, CNN ANCHOR: Hello and welcome to our viewers joining us from all around the world and everyone streaming us on CNN Max. I'm Rosemary Church. Just ahead.

Emotional scenes in Israel as families embrace loved ones held captive by Hamas for more than two years.

Russia is warning the U.S. ahead of a White House meeting with the Ukrainian President not to supply Tomahawk missiles to Kyiv, why Russia is so concerned about the U.S.-made weapon.

And how a theory on destruction just won three economists a Nobel Prize.

UNKNOWN (voice-over): Live from Atlanta, this is "CNN Newsroom" with Rosemary Church.

CHURCH: Thanks for joining us.

Donald Trump is now back in the United States after wrapping up the Gaza ceasefire summit in Egypt and declaring a historic dawn of a new Middle East. The U.S. President's whirlwind trip to the region coinciding with the first phase of his Gaza plan that saw the release of all living Israeli hostages and the freeing of hundreds of Palestinian detainees.

But still many questions remain and the future of Gaza is far from certain. The second more complex phase of his plan which would involve dismantling Hamas and determining the enclave's governance is yet to be negotiated.

For now though, there's relief in Israel as all living hostages are back home. So far only four of the 28 deceased hostages were released, Israeli security forces could be seen saluting vehicles carrying their remains on Monday.

President Trump traveled to Egypt after stopping in Israel to meet with the families of hostages and delivering an address to Parliament. It was in Sharm el-Sheikh that he co-hosted a Gaza summit attended by more than 20 nations. The U.S. President declined to directly address whether he supports recognizing a Palestinian state as he and other leaders took part in a signing ceremony for the Gaza ceasefire deal.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT: We listened and we exchanged ideas and we kept pushing forward until the job was done and the first steps to peace are always the hardest. And today we've taken them and we've put them all together and we've come up with this beautiful mix like nobody thought was possible. And as you know, I've just come from Israel.

It was an amazing day to watch the hostages come in. It'll be the new beginning for an entire beautiful Middle East. From this moment forward we can build a region that's strong and stable and prosperous and united in rejecting the path of terror once and for all.

(END VIDEO CLIP)

CHURCH: Across Israel there's been joy and relief as all living hostages return home. It was a day so many families had hoped and prayed for. CNN's Jeremy Diamond has more on the powerful and emotional reunions.

(BEGIN VIDEOTAPE)

JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT (voice-over): Two years of pent-up anguish unleashed in an instant. One after another, 20 newly- freed hostages and their families hug, cry, kiss, scream and pray.

Reveling in their new, almost unbelievable reality, their nightmare is finally over. These moments were never guaranteed when Bar Kuperstein was kidnapped from the Nova Music Festival, his father was still paralyzed. He vowed he would embrace his son again on his own two feet.

For Reynav Tzengaker, who became an icon in the hostage family's protest movement, this is the culmination of a relentless fight.

Israel's national nightmare is also now finally over. After 738 days, every single living hostage is now free. The open wounds that has been October 7th can now finally begin to heal.

[03:05:01]

For the hostages, the journey to freedom began in Red Cross vehicles flanked by masked Hamas militants. An Israeli convoy completed the trip to a military base near Gaza, where hundreds of Israelis lined the route.

DIAMOND: This liftoff is a moment more than two years in the making. Some of the last living Israeli hostages getting their own taste of freedom.

DIAMOND (voice-over): Newfound freedom filled with moments that seemed frighteningly out of reach just weeks ago. Like two former hostages embracing for the first time in years.

It was an emotional day in Gaza too, when more than 1700 Palestinians detained without charge were finally freed. Tears of joy and questions answered, after months in the dark about their loved one's fate.

Thank God for this blessing, this woman says, reuniting with her husband.

It's my birthday today, he says, tearing up. It's an indescribable feeling being here next to my wife. The Israelis may have destroyed Gaza, but they can't destroy us.

In the occupied West Bank, dozens of Palestinian prisoners serving long-term sentences also received a hero's welcome. They are among 250 high-security prisoners released as part of the deal, most of them tied to deadly attacks on Israelis.

For the Mehran family, and most Israelis, a price well worth paying. To make families whole again, and give two little girls their father back, after two long years.

Jeremy Diamond, CNN, Re'im, Israel.

(END VIDEOTAPE)

CHURCH: CNN's Salma Abdelaziz is following developments and joins us now live from London. Good morning to you, Salma.

So, after an emotionally charged day that saw the return of all the living hostages, the release of Palestinian prisoners and the signing of the ceasefire deal, the next phase is looking more daunting. What lies ahead?

SALMA ABDELAZIZ, CNN CORRESPONDENT: Yes, now the big questions are being asked, Rosemary.

How do you secure the peace? What does governance in Gaza look like? How do you rebuild an enclave that has been mostly destroyed and demolished in this war?

Let me start with that last point about the destruction. We have images to show you of just the sheer devastation across the Gaza Strip. And to begin to give you a sense of the heartbreak, of the impact this conflict has had on that population of 2 million, one in 10 Palestinians in Gaza, 10 percent of the population, has either been killed or injured in this conflict, 90 percent of homes have either been damaged or destroyed in this conflict.

Nearly every single family has been forced out of their home and displaced at least once. Some 7, 8, even 10 times and more throughout this conflict. So, when we talk about rebuilding Gaza, it is quite literally building it from the ground up, something that is estimated to cost $53 billion, according to the World Bank.

And that is assuming that a peace is in place to allow that rebuilding to take place. I want you to take a listen to how President Trump envisions Gaza post-war.

(BEGIN VIDEO CLIP)

TRUMP: We've all agreed that supporting Gaza must be done to lift up the people themselves. But we don't want to fund anything having to do with the bloodshed, hatred or terror as has happened in the past.

And for the same reason, we also agree that Gaza's reconstruction requires that it be demilitarized and that a new honest civilian police force must be allowed to create a safe condition for the people in Gaza.

(END VIDEO CLIP)

ABDELAZIZ: So, Gaza must be demilitarized. Let me break down that point for you.

President Trump's plan envisions that Hamas lay down its arms and hand over power, something it is not willing to do. And not only that, Rosemary, since the ceasefire has been in place, Hamas has actually reasserted control in Gaza. Putting its police forces back on the streets and even engaging in running gun battles with rivals, with collaborators, with clans that it sees as enemies on the ground.

So, that seems very far from the reality. Well, how about that new force, the new police force he mentions in that soundbite?

To explain that, I want to pull up one of President Trump's points of that 20-point peace plan, point 15, which discusses an international stabilization force and envisions that this force would be an Arab-led force that would train policemen, that would provide that backing, mainly from Egypt and Jordan.

Something that we hoped that we would get more detail, more clarity on, when President Trump was in Egypt yesterday. But none of that clarity has come to fruition. So, you have this very vague and ambitious and aspirational plan to replace Hamas with none of the detail, Rosemary.

CHURCH: Alright. Our thanks to Salma Abdelaziz bringing us that live report from London, I appreciate it.

[03:10:02]

Well, joining me now live from Beirut is Paul Salem, he is a current senior fellow as well as a former president and CEO of the Middle East Institute. I appreciate you being with us.

PAUL SALEM, SR. FELLOW AND FORMER PRESIDENT AND CEO, MIDDLE EAST INSTITUTE: Thank you for having me.

CHURCH: So, after watching the emotional return home of all 20 living hostages, the signing of the ceasefire agreement and the release of nearly 2000 Palestinian prisoners, President Trump's Phase 2 of his peace plan has now begun. How hard will this next phase be, given it will require the disarming of Hamas and the implementation of Gaza's security and governance?

SALEM: Well, first of all, what has happened is tremendously important, as your reporting indicated. The return of these hostages, the release of prisoners from the Palestinian side, really underlines, hopefully, the end of the most intense conflict that we've seen over the last two years.

And the return of these hostages and prisoners for their families and loved ones is a tremendous achievement. I think President Trump deserves a lot of credit for that, as well as the Arab mediators that put a lot of pressure on Hamas as well.

But, indeed, the second step or the second phase of this agreement, I think, will be much more difficult to implement. On the Hamas side, as mentioned, they have not agreed to disarm. They don't want to deal themselves out of the Palestinian future, neither politically nor militarily.

They have given up the hostages, and that means they've given up a lot of leverage. But they can also hope that maybe Israeli assaults on them will be less severe now that the hostages have been released.

On the Israeli side, the Netanyahu government and his right-wing allies, Smotrich and Ben-Gvir, all of them, I think, are not enthusiastic of bringing back another Palestinian authority of some kind into Gaza that would limit their ability to operate in Gaza, they don't trust Hamas, they will leverage the fact that Hamas is not disarming in order not to give concessions on their side and they are certainly not enthusiastic about bringing other armies, whether Arab armies or European armies, into Gaza.

That would also limit their ability to move forward. So I think it's really President Trump's insistence which is going to be critical. Will he be able to maintain his pressure and his focus, as well as other regional players?

CHURCH: So where does all this leave a two-state solution, given Benjamin Netanyahu has rejected it and President Trump sidestepped the issue when asked about it before heading back to Washington, saying we'll just have to see what happens if the U.S. President refuses to commit to a Palestinian state in the end?

SALEM: Well, I think it's very clear that the current Israeli government, much of Israeli public opinion, the current Knesset, has pretty much ruled out a two-state solution for now. Prime Minister Netanyahu is facing a challenging political year. There will be elections for the Knesset sometime either in November of next year or before that.

So he's going to be very focused on his own short-term political survival. And given public opinion in Israel today, that will have to include not going towards talks towards a two-state solution. That's why I think he and his government will be doing all they can to drag their feet on that issue.

And I don't think U.S. pressure will be able to force Israel to go in that direction. But I think the two-state solution, at the end of the day, maybe it's a difficult solution. It's complex -- its conditions don't seem to be there today.

But there is no better solution, there's no other solution. But I think it will require the emergence of a new leadership in Israel. The Arab world is completely for it, ready for it, ready to engage in all ways.

The Palestinian Authority has been trying for it for decades. So I think it will require change in Israel, continued pressure from the United States in order to get there.

CHURCH: And displaced Palestinians are now returning to the devastation of Gaza, with most homes and buildings destroyed. How will the enclave be rebuilt and who will likely pay for its reconstruction and guide this?

SALEM: Well, in order to begin reconstruction, you need security and you need some kind of governance structure and I don't think that's going to be easy to put together. As I mentioned, I don't think the current Israeli government wants other armies to enter the Gaza Strip and to potentially complicate its future military operations or its free hand in Gaza. I don't think they will be enthusiastic about that at all.

[03:15:00]

And there still needs to be a lot of negotiations as to which Palestinians, what Palestinian entities, will be allowed to govern in Gaza and work the aid angle and so on. If that were put together, the Gulf countries have said, and some European countries, and they are serious, they are willing to step up and at least begin the process of reconstruction. But we're still many months away from being able to get that done.

CHURCH: Paul Salem, many thanks for joining us, I appreciate it.

SALEM: Thank you.

CHURCH: Well, fresh off his diplomatic victory in the Middle East, President Trump is refocusing on Ukraine and threatening to provide Kyiv with a powerful weapon capable of striking Moscow.

Plus, we'll bring you the latest on the deadly flooding and landslides in Mexico, where dozens are still missing and rescue efforts are underway. Back with that and more in just a moment.

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CHURCH: The U.S. and Ukrainian presidents are talking about the possible use of a powerful weapon against Russia, American-made Tomahawk missiles. They're expected to be a prime topic of discussion when Donald Trump and Volodymyr Zelenskyy meet at the White House on Friday.

President Trump has already threatened to provide Ukraine with the long-range Tomahawks, which are capable of striking Moscow. It's unclear how serious he is about supplying the weapons, but the possibility is being strongly criticized by Russian officials.

CNN's Matthew Chance has our report from the Russian capital.

(BEGIN VIDEO CLIP)

MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT (voice-over): Tomahawk cruise missile. Even the threat of sending these U.S. weapons to Ukraine with a range of over 1,500 miles may be enough to bring Russia to the negotiating table. At least that's what President Trump seems to think.

TRUMP: We had a very good conversation.

CHANCE (voice-over): Telling reporters en route to the Middle East, he may tell the Kremlin to end the Ukraine war or face these formidable weapons easily capable of reaching Moscow.

TRUMP: I might say, look, if this war's not going to get settled, I'm going to send them Tomahawks, I may send them. The Tomahawk is an incredible weapon, a very offensive weapon. And honestly, Russia does not need that, they don't need that.

Yes, I may tell them that if the war is not settled, that we may very well do it. We may not, but we may do it.

CHANCE (voice-over): That uncertain threat hasn't come out of nowhere. For months now, Russia has been stepping up its own missile and drone attacks across Ukraine, stretching air defenses, fueling Ukrainian calls for a powerful long-range weapon to strike back, potentially deep inside Russia.

We see and hear that Russia is afraid that the Americans may give us Tomahawks, Ukrainian President declared at the weekend. It's a signal that exactly such pressure may work for peace, Vladimir.

But in public, the Kremlin has been defiant, insisting the deployment of Tomahawks would have little impact on the battlefield but serious, ratcheted-up tensions between Moscow and Washington.

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): Using Tomahawks without the direct participation of American military personnel is impossible. This would mark a completely new, qualitatively new stage of escalation, including in relations between Russia and the United States.

CHANCE (voice-over): And the missiles can potentially deliver a nuclear payload, leading to warnings yet again of a catastrophic scenario.

"It's impossible to tell whether a Tomahawk carries a nuclear or conventional warhead while it's in flight," the hawkish former Russian President Dmitry Medvedev posted. "How is Russia supposed to respond," he asked.

CHANCE: Well, with President Trump now basking in the glory of his diplomatic success in the Middle East, he's clearly not given up on ending the war in Ukraine. But the hope that just one more powerful U.S. weapon, in this case the Tomahawk missile, could be the key to ending that conflict may prove a little misplaced.

Matthew Chance, CNN, Moscow.

(END VIDEOTAPE)

CHURCH: The French President is expected to chair the first Cabinet meeting of the new government in less than an hour, following a week of tremendous upheaval. Emmanuel Macron reappointed Sebastien Lecornu as Prime Minister on Friday, just four days after he resigned.

Since then, Lecornu has revealed a Cabinet filled with many of the same picks for top jobs. But it's unclear if opponents will be satisfied. The new government's task is to move beyond the deadlock and pass a budget that will get France out of its debt crisis.

Officials in Madagascar say the President has fled the country after weeks of youth-led protests. The leader of the opposition in Parliament says President Andre Rojoelina left after army units defected and rejoined the protest movement. A diplomatic source says the President is refusing to step down, demonstrations over water and power shortages have erupted into a large uprising over corruption and poverty, with young protesters demanding the president leave office.

[03:25:04]

The U.N. says at least 22 people have been killed in clashes between protesters and security forces since September 25. Madagascar is one of Africa's poorest nations, three-quarters of its population live in poverty.

At least 64 people are dead and 65 still missing after days of torrential rain triggered flooding and landslides across Mexico. Thousands of troops have been deployed as rescuers struggle to reach more than 80 towns that remain inaccessible.

CNN's Valeria Leon has more from one of the hardest-hit regions.

(BEGIN VIDEOTAPE)

VALERIA LEON, CNN CORRESPONDENT: Days of heavy rain have caused widespread destruction across central and southeastern Mexico.

Days of heavy rain have caused widespread destruction across central and southeastern Mexico, where landslide and mudslide floodings have put houses like this one under the ground. As you can see here, these two crosses are because two babies died here. And it was during the flooding two days ago when this tragedy happened.

And there are no authorities in this town, in Hidalgo, Mexico, but they were the neighbors, the ones who come and help this family. This is Enrique Hernandez. He was the one that helped these babies.

LEON (translated): Enrique, how did you help this family?

LEON: He said that most of the neighbors came here to try to rescue these two children, but they couldn't save them.

So this family had moved to a remote community a few kilometers away from here, but we can see part of the belongings. And this is the fridge that used to be inside of this house, and here we have still this food left. And all the roads in this community have shown like this destruction in part of this trail.

Most of the neighbors now are looking for help, asking the government to distribute aid to part of this community and others that have been cut off for more than three days. The federal government has announced a census starting this week to help and distribute aid to most of the people. There are hundreds of people that need this help, and that they have been incommunicated for the last days.

This is the situation underground. I'm Valeria Leon, in Hidalgo, Mexico.

(END VIDEOTAPE)

CHURCH: Just ahead, President Trump is riding a wave of praise over his role in the Gaza ceasefire, and that's giving his administration new momentum. We'll have the details just ahead.

Plus, aid trucks are making their way into Gaza amid the ongoing ceasefire. Coming up, a closer look at the humanitarian operations underway there right now.

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[03:30:00]

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CHURCH: Welcome back to "CNN Newsroom," I'm Rosemary Church. I want to check today's top stories for you.

Israelis are celebrating the return of the last living hostages from Gaza. After waiting more than two years to see their loved ones, emotional reunions like this one took place in Israel on Monday. The bodies of four deceased hostages were also returned with 24 more remaining in Gaza.

Cheers also filled the air in Gaza and the West Bank after buses of Palestinian detainees returned. As part of the ceasefire deal, Israel released nearly 2000 Palestinians from its jails on Monday. Some had been behind bars for decades, but 1700 of those released had been held without charge by Israeli forces since the start of the war.

And the Ukrainian President will head to the White House Friday for talks with Donald Trump. Volodymyr Zelenskyy told reporters that the main topics of conversation will include air defenses and long-range missiles. The U.S. president has warned he might provide powerful U.S.-made Tomahawk missiles to Ukraine that are capable of hitting Moscow.

Well the war in Ukraine is just one of the tricky conflicts the Trump administration is focusing on following its early success in Gaza. CNN's Kristen Holmes explains.

[03:35:08]

(BEGIN VIDEOTAPE)

KRISTEN HOLMES, CNN SR. WHITE HOUSE CORRESPONDENT: President Trump spent the day celebrating this phase one completion of this peace deal, talking about how this was a historic dawn of the new Middle East, talking about how this was a region transformed.

But it was clear from talking to administration officials as well as sources inside the White House that the White House and President Trump really want to use this time and use this period as momentum moving into other diplomatic issues.

For example, one, phase two of these peace deals. They believe that they have to keep the momentum going, that's part of why you saw the show of force President Trump when he was in Egypt with these Arab leaders around him, essentially thanking them for the work that they're going to do in the future to continue this phase two.

Also, though, beyond just this peace deal, we heard President Trump, we've heard from sources that they want this to turn into an Iran nuclear deal. Now, whether or not they can get that accomplished obviously remains to be seen. But if you talk to experts in the region, they do believe that Iran is at one of its weakest points of all time.

And I will tell you that months ago, when Israel first bombed Iran, I was told by a senior administration official, we are going to get a nuclear Iran deal out of this. Clearly, they still believe that to be the case.

And then lastly, there is some talk about how they can pivot this into a win for the war in Ukraine. We know that on Friday, President Trump is meeting at the White House with Ukrainian President Zelenskyy. They're going to talk about air defense and long range missiles.

This comes after President Trump essentially threatened Putin with this idea that the White House or the U.S. would supply Tomahawk missiles, those long-range missiles, to Ukraine if Putin didn't end the war. These are missiles that could go deep inside Russia. So they're clearly here trying to fire on all fronts, they believe they have the momentum now.

And of course, again, all of these are huge feats, phase two, an Iran nuclear deal, ending what has been going on in Russia-Ukraine. But they do believe if they can do it now is the time, given what they're seeing, given what they have in support from these world leaders. Kristen Holmes, CNN, the White House.

(END VIDEOTAPE)

CHURCH: Despite recent momentum in the ceasefire deal, the future of Gaza is still unclear. President Trump insists several Gulf nations are eager to invest in rebuilding the enclave, but they appear hesitant to commit without assurances that Israel will not resume its bombing campaign.

Meanwhile, the Palestinians in Gaza are still struggling.

(BEGIN VIDEO CLIP)

MAHMOUD SABRY, GAZA RESIDENT (through translator): You can see how devastating the destruction is right in front of you. We are trying to settle back in.

But in an environment like this, normal life is simply impossible. How are we supposed to live in all this devastation? No one, whether children, young people, the elderly or women, can live here.

(END VIDEO CLIP)

CHURCH: Widespread devastation has crippled medical facilities and basic infrastructure, but the U.N.'s Office for the Coordination of Humanitarian Affairs says real progress has been made in humanitarian operations since Friday's ceasefire took effect.

Well joining me now is Olga Cherevko, spokesperson in Gaza for the U.N. Office for the Coordination of Humanitarian Affairs. I appreciate you being with us.

OLGA CHEREVKO, OCHA SPOKESPERSON IN GAZA: Thanks for having me, Rosemary.

CHURCH: So you have been working in Gaza as this ceasefire takes hold and as displaced Palestinians return to the ruins and devastation of their neighborhoods where homes and facilities have been destroyed. How would you describe this moment?

CHEREVKO: Well I think, Rosemary, it's a moment of relief. It's a moment of a lot of hope in which people can finally look forward to something and discuss their future, something that they weren't able to do for a long time.

Yesterday I was in Gaza City talking to some of the people who had just returned and some who never actually left. And I spoke with one man who, when I asked him a question, he said, you don't have to ask me a question to know how I feel. You just look around you.

And truly, the devastation, the destruction, the scale of destruction is really staggering. But amid all of this, people have this ray of light and they're really positive. Most people that I spoke with, they all told me that they're looking forward to all these changes on the ground, how things will become more affordable, that they can rebuild their lives and move on.

CHURCH: And Olga, some humanitarian aid is now slowly moving into Gaza, but so much more is still needed, of course, and still waiting to come in. When do you expect the various border crossings to open to allow more aid trucks into Gaza?

[03:40:08]

CHEREVKO: On Sunday I spent the entire day in Camp Shalom and I watched truck after truck come in and get loaded and leave to enter Gaza, and then more trucks, empty trucks lining up to be loaded. And this was hours and hours and hours of supplies entering.

For the first time in more than seven months, we had cooking gas enter. And all of these positive signs really point to one that we are making a lot of progress in terms of already we are delivering a lot of assistance, we are prioritizing the most vulnerable, we are making assessments and looking to rehabilitate the systems.

But the second thing is that this is going to be a very long journey, and it's only the beginning of this journey that we have started now.

And things are not going to be easy. There are still destroyed roads, there is still the destroyed infrastructure, there are still unexploded ordnance on the roads. So all of these things will be a challenge but the fact that we are already seeing these positive things on the ground, for example, the access challenges, we are reaching areas that we couldn't reach before.

When we came to Camp Shalom on Sunday, we didn't have to wait for the green light. We received it instantaneously. So it's very positive, and we have a lot of hope for this opportunity.

CHURCH: So explain to us the plan for distributing this aid, and now as it's starting to come in, given past problems, of course, and how will your workers and civilians be protected during this process?

CHEREVKO: So this is, of course, one of the enablers that needs to be in place, which is guarantees of safety for our workers and, of course, protection of civilians. The plan itself, it's a long-term plan, but the first 60 days of this plan are focusing on the most vulnerable people.

So, of course, while everybody's in need in Gaza, some people are more vulnerable than others. So we will target these specific groups to make sure that they receive what they need. So some of the examples, we are, of course, focusing on food to feed 2.1 million people in Gaza.

We are going to target 500,000 people with nutrition treatment and assistance, we are going to target 1.4 million people for water and sanitation programs to reduce the dependency on water trucking to rehabilitate the networks and restore the systems.

Of course, health care is another issue that, another area that we are focusing on, and we're bringing high volumes of medicines, blood units, and other things that are needed to restore the access to health care.

And then, of course, education cannot be left out, because if you look at the kids here, they've been out of school for two years. So we're reopening temporary learning centers to make sure that people, that kids have a chance to be kids again and go back to school and learn and do the things that they normally would do here.

CHURCH: Olga Cherevko, thank you so much for joining us and, of course, all the incredible work you're doing. I appreciate it.

CHEREVKO: Thank you.

CHURCH: U.S. markets rebound as fears of a renewed trade war with China fade, at least for now. What's behind the recovery and how things look ahead of Tuesday trading? That is next here on CNN.

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[03:45:00]

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CHURCH: Welcome back to CNN, this is your Business Breakout.

Asia-Pacific markets remain in negative territory after another rough trading session. You see Japan's Nikkei down more than 2.5 percent there, the Hang Seng off 1.8 percent.

Well stocks tumbled Monday over fears of a renewed trade war between China and the U.S. Even though President Trump softened his tone, there are lingering doubts over whether the world's two largest economies could reach a lasting trade deal.

And these are the business headlines.

Some stock market analysts say the U.S. government shutdown will likely result in a hit to the U.S. economy in the fourth quarter. They also warn a prolonged shutdown even just another week could cause unemployment numbers to rise and have negative impacts for investors, businesses and the Federal Reserve.

Silver prices have surged by roughly 75 percent this year. Both gold and silver have reached all-time highs as investors turn to safer investments to hedge against political and economic uncertainty. In Monday's New York trading, silver futures surpassed their previous peak set in 1980.

Well U.S. investors celebrated after stocks rebounded following President Trump's threat of massive new tariffs on China sent markets spiraling last week. The Dow rose 588 points before the close on Monday, while the S&P 500 gained more than 1.5 percent.

[03:50:04]

Well right now, U.S. stock futures are down slightly ahead of Tuesday's opening bell. Clare Duffy has more on how fears of an escalating trade war with China are driving the markets.

(BEGIN VIDEOTAPE)

CLARE DUFFY, CNN TECH REPORTER: Over the last few weeks, investors had been hopeful that trade relations between the U.S. and China were improving following talks between U.S. and Chinese officials in Madrid last month and ahead of this planned meeting between President Trump and Chinese President Xi Jinping at the APEC summit later this month.

But that progress hit a snag last week when Beijing announced new restrictions on exports of rare earth minerals. These are materials that are essential for building everything from electronics and semiconductors to electric vehicles and military equipment and could potentially cause problems for President Trump's goal of bringing back more manufacturing capacity to the United States.

So we saw President Trump respond on Friday with that Truth Social post that really roiled the markets, threatening to impose new triple- digit tariffs on exports from China starting on November 1st. That, of course, caused concern that the U.S.-China trade war could be back on and could have significant implications both for individuals and U.S. businesses that rely on goods from China. That is what caused this massive sell-off that we saw on Friday.

But since then, we've seen U.S. officials trying to sort of de- escalate the situation and quell some of these investor concerns.

President Trump posted on Truth Social on Sunday saying "Don't worry about China, it will all be fine. Highly respected President Xi just had a bad moment. He doesn't want depression for his country and neither do I."

Treasury Secretary Scott Bessent also saying that he does expect that meeting between President Trump and President Xi to go forward later this month.

And all of this does appear to have mollified investors. At least for now, we saw all of the major indices in the U.S. ending in the green on Monday. But I do think this raises the stakes for that meeting later this month between the two world leaders to go well.

Back to you.

(END VIDEOTAPE)

CHURCH: Well, to many people, creative destruction may sound like a contradiction. But it's an economic theory that just earned three men a Nobel Prize. One winner told CNN how the concept can bring about a better quality of life, that's next.

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CHURCH: Well, researchers from the U.S., France and the U.K. are sharing this year's Nobel Memorial Prize for Economics. Joel Mokyr, Philippe Agihon and Peter Howitt were honored for their work on how innovation affects economic growth and how new technologies replace older ones.

[03:55:08]

It's a key concept in economics known as creative destruction. The winners were credited with better explaining the concept of how new products build off older ones, stimulate growth when they enter the market and eventually outcompete the previous versions.

Our Paula Newton spoke earlier with Laureate Philippe Agihon and asked him whether creative destruction might pose a threat to democracy in a modern society.

(BEGIN VIDEO CLIP)

PHILIPPE AGIHON, 2025 NOBEL LAUREATE IN ECONOMICS: The fast-growing economy is one where new talents, no matter the social origins, can blossom and create and they challenge vested interests and incumbent firms. But that's the whole thing.

That's what creative destruction is all about, is to allow new talents to constantly challenge vested interests and established firms. And that's what makes growth dynamic, you see.

PAULA NEWTON, CNN INTERNATIONAL ANCHOR AND CORRESPONDENT: Yes, but yet the very essence of this, I don't have to remind you, is challenging, even in places like your home country in France.

So I do want to turn to the Artificial Intelligence issue now. You've been steeped in economic history for decades now. Should we fear it? It is very much the essence, right, of creative destruction and what it means.

AGIHON: Yes, that's right. So A.I. has a big power, has a growth potential. Artificial Intelligence has a huge growth potential because it automates tasks in the production of goods and services, in the production of ideas.

It becomes easier to find new ideas with A.I. But the thing is that ill-designed competition policy can stifle growth, you see, from the A.I. revolution, can limit the growth potential of A.I. So it's very important to have institutional change, that competition policy should adapt to avoid that a few actors in A.I. monopolize the market and stifle completely new entry and new innovators.

So we need the A.I. revolution, together with good competition policy, to harness the growth potential of A.I. Similarly, for the employment potential, you need to make sure that A.I. will not destroy too many people, can move from one job to another. Education is important and flex security, the labor market policy that Denmark, for example, implements.

The combination of those will be crucial to maximize the positive impact that A.I. can have on new jobs, because A.I. will create lots of new jobs. When you A.I., you become much more competitive and productive, and there is a big demand for your product. That's the source of creation of jobs. (END VIDEO CLIP)

CHURCH: Thanks so much for your company, I'm Rosemary Church. Have yourselves a wonderful day. "Amanpour" is coming up next, then stay tuned for "Early Start" with Brian Abel, starting at 5:00 a.m. in New York, 10:00 a.m. in London.

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