Good morning.

Panic has gripped Democratic party lawmakers, donors and officials after Joe Biden’s stumbling performance in last night’s presidential debate.

The event, hosted by CNN, was a high-stakes opportunity for Biden to allay widespread concerns about his age before a television audience of tens of millions of American voters.

But one Democratic lawmaker said Biden’s performance had sparked extensive panic in the president’s party.

“Many House Democrats tonight, representing a wide cross-section of the Democratic caucus, were privately texting one another that Biden needs to announce he’s decided not to run for re-election. We need a new nominee,” the lawmaker said. Read more reaction to the debate.

• The big moments: Steff Chávez and Martha Muir round up the highlights from the most consequential night of the 2024 election race so far.

• Opinion: The upsides of replacing their candidate have suddenly become clearer for Democrats, writes Edward Luce.

• Have your say: Should Joe Biden step aside for another candidate? Vote in our FirstFT poll.

And sign up to US Election Countdown for a twice-weekly guide to November’s election, written by Washington reporter Steff Chávez. For crunchy analysis and insight turn to Swamp Notes, a newsletter from columnists Rana Foroohar and Edward Luce, which is now also available as a podcast.

And here’s what I’m keeping tabs on today and over the weekend:

• 2024 election: Both presidential candidates will be back on the campaign trail today, with President Joe Biden holding a rare rally in the key battleground state of North Carolina, while his opponent Donald Trump will speak at an event in Chesapeake, Virginia.

• Central banks: Richmond Federal Reserve president Thomas Barkin and Banque de France governor François Villeroy de Galhau speak at the Global Interdependence Center’s conference in Paris. Federal Reserve Bank of San Francisco president Mary Daly discusses the impact of AI on business and the workforce before the Aspen Ideas Festival in Aspen, Colorado.

• Companies: Nike shares are set to tumble when trading begins later in New York after the world’s largest sportswear maker by revenue warned sales would fall this year because of a decline in demand for its lifestyle products.

• Elections: Iran holds its snap presidential election today after the sudden death five weeks ago of president Ebrahim Raisi in a helicopter crash. Voters in France heads to the polls in the first round of parliamentary elections on Sunday.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Exclusive: the US, Israel and Ukraine are in talks to supply Kyiv with up to eight Patriot air defence systems, dramatically improving its ability to counter Russian air strikes. While not finalised, the arrangement would mark a shift in relations with Moscow for Israel, which has been cautious about taking sides over the invasion of Ukraine.

2. A dwindling number of bearish Wall Street strategists are struggling to convince “fanatical” clients that slowing economic growth and excessive hype about artificial intelligence have left the US stock market vulnerable to a sharp downturn. “This rally has been tough and we’re having a hard time convincing [clients] to be bearish,” said one equity strategist. Here’s what other strategists on Wall Street are saying about the current rally.

3. Bill Gates has defended the rapid rise in energy use caused by artificial intelligence systems, arguing the technology would ultimately offset its heavy consumption of electricity. Gates urged environmentalists and governments to “not go overboard” on concerns about the huge amounts of power required to run new generative AI systems. Attracta Mooney and Camilla Hodgson report from the Breakthrough Energy Summit in London.

4. Shares in Walgreens Boots Alliance yesterday sank to a 27-year low after the drugstore chain cut its profit outlook and announced more store closures, citing a difficult pharmacy business and strained American consumers. Walgreens, which also operates under the Duane Reade banner in the US and Boots in the UK, said price discounts and theft were undercutting US retail margins. Chief executive Tim Wentworth said consumers were becoming “increasingly selective and price-sensitive”.

5. The IMF has urged the US to “urgently” address its mounting fiscal burden, as it took aim at the tax plans of both presidential candidates. The fund said projections from its annual health check of the US economy showed the debt-to-GDP ratio hitting 140 per cent by 2032 — much higher than its current level of 120.7 per cent. Here’s why.

Today’s Big Read

A combination of scandal, poor management and incumbency at a time of economic malaise has eroded Scotland’s once-dominant party. With voters eager for change, polls suggest the Scottish National party could lose a large number of seats in Westminster in the upcoming election. Nevertheless support for independence remains strong.

We’re also reading . . . 

• Larry Fink: Infrastructure plus pragmatism is the recipe for G7 growth, writes the chair and chief executive of BlackRock.

• Taylor Swift effect: Major sporting and cultural events are fuelling a surge in hotel and airfare prices in Europe, rattling inflation-wary central bankers.

• ‘Be confident about China’s economy’: Beijing’s number-two official Li Qiang was upbeat at a meeting of foreign and local business leaders this week at the World Economic Forum’s ‘Summer Davos’.

Chart of the day

With less than a week to go until polling day in the UK, the Conservatives are heading for the worst general election result in their 190-year history. Much of the narrative in recent weeks suggests this election was lost only in the past few months as Nigel Farage entered the fray and his populist party, Reform UK, began eating into the Conservatives’ right flank, but this is false. Voting data shows that as early as January 2022, the Conservatives were on course to lose an election.

Take a break from the news

What’s the best seat in a restaurant? For many, it’s at the counter of a fashionably open kitchen, intended so you can experience the fire and knives of service. But food writer Tim Hayward argues that to find the true heart of any restaurant, you must follow the smokers out back by the bins.

Additional contributions from Irwin Cruz and Benjamin Wilhelm