Good morning. NJ Transit riders are used to dealing with disruptions and delays—and that was when people were driving the trains.
Now…they’re not. As of 12:01am ET today, engineers for the nation’s third-largest transit network went on strike, the first of its kind in more than 40 years, over a wage dispute with the agency.
Hundreds of thousands of NJ–NY commuters are now in the lurch, and a contingency plan to bring people where they need to go will only handle 20% of daily ridership. And if you’re going to the Shakira concert at MetLife Stadium tonight, prepare for the mother of all surge pricing on Uber.
—Matty Merritt, Molly Liebergall, Dave Lozo, Adam Epstein, Neal Freyman
Markets: Stocks ended Thursday as mixed as a buffet plate at Golden Corral, with the Dow gaining 250 points but the Nasdaq ticking down, ending a six-day winning streak for the tech-based index. Alibaba dropped after missing estimates due to a consumer slowdown and increased competition in China.
The retail heavyweight has spoken. Walmart, the largest retailer in the world, said yesterday it would raise some prices because of tariffs. Despite the 90-day reprieve on Chinese goods that will see their levy reduced from 145% to 30%, the company said it won’t absorb the rising costs it’s already seeing from suppliers.
On Walmart’s earnings call yesterday, CEO Doug McMillon celebrated the first-ever profitable quarter for both its US and global e-commerce arms, beating Wall Street expectations. Still, McMillon said it’s not enough to offset the tariffs:
Noticeable price increases are expected to hit shelves as early as the end of this month.
More price hikes will likely roll out this summer as retailers work through the merchandise they stockpiled when tariffs were first floated.
But if anyone can weather the storm, it’s Walmart
While some companies have lowered full-year forecasts or ditched them all together, Walmart is sticking with its expected 3%–4% sales growth in 2025. The retail giant chalked up the wins to attracting more higher-income shoppers, a group that will likely stick with them amid all the economic uncertainty.
Walmart said it will keep the cost of everyday items like groceries low, likely by raising prices on electronics and household goods—items that higher-income customers might still buy during a downturn:
In the most recent fiscal year, roughly 60% of Walmart’s revenue came from groceries.
Walmart emerged from the 2008 financial crisis with an even bigger market share and more brand loyalty by lowering prices on essentials.
Everyone is cutting back: April consumer spending chilled, increasing just 0.1%, after a pre-tariff buying spree in March, when spending surged 1.7%.—MM
The Supreme Court mulled birthright citizenship. After hearing oral arguments on President Trump’s executive order attempting to deny citizenship to babies born in the US to parents who are not citizens, SCOTUS gave a few hints as to which direction it’s leaning. A majority of justices seemed uncomfortable with the idea of Trump’s executive order, but open to his team’s argument that lower courts should not be able to block the order nationwide—a central question in yesterday’s proceedings. It’s not clear what the decision will look like, but legal experts think the court could simultaneously try to limit lower courts’ ability to use nationwide injunctions while also preventing Trump from carrying out his executive order. A decision is expected next month.
Coinbase under investigation, hit with ransom attack. Coinbase’s wild week got much wilder when the New York Times reported yesterday that the SEC has been looking into whether the crypto exchange misstated the size of its user base in securities filings. Per the New York Times, the investigation started under President Biden and has continued under President Trump. The subject of the investigation appears to be Coinbase’s claim in past disclosures and marketing materials that it has 100 million “verified users.” A company spokesperson said it no longer reports that metric and the investigation should not continue. The report came days after Coinbase joined the S&P 500, and just hours after it said it could lose $400 million following a recent hack by “rogue overseas” agents looking to steal customer data.
JPow warns of supply shocks. Fed Chair Jerome Powell, on whose every word the stock market seems to move, said at a conference yesterday that, longer-term, interest rates are likely to stay higher amid constant changes to the economy. “We may be entering a period of more frequent, and potentially more persistent, supply shocks,” Powell said, “a difficult challenge for the economy and for central banks.” Powell also said the Fed is reviewing how it weighs its policy decisions surrounding curbing inflation and boosting employment. Stocks dropped following Powell’s comments but mostly recovered by the end of the day.—AE
The single-largest health insurance company in the US appears to be hitting every step on its tumble down the stairs.
In the latest setback for UnitedHealth Group (UHG), the Justice Department is investigating it for potential criminal fraud in its Medicare Advantage business, the Wall Street Journal reported this week. UHG called the report “deeply irresponsible” and said it hadn’t heard from the Justice Department.
The report comes as it’s already facing a civil fraud investigation into alleged overbilling, which may soon get dismissed, and an antitrust probe the DOJ opened in 2024. There are also several more compounding crises:
UHG’s CEO of four years suddenly stepped down earlier this week for “personal reasons,” and the company suspended its 2025 sales guidance.
Investors sued UHG this month for allegedly downplaying the business impact of the December killing of UnitedHealthcare CEO Brian Thompson, which spotlighted widespread public frustrations with the insurance industry.
All that came after the largest healthcare cyberattack in history, which may have affected 100 million customers of Change Healthcare (owned by UHG) in October.
Like falling off the road in Mario Kart: UnitedHealth Group dropped from No. 1 on the Dow in mid-April to 16th place at one point yesterday, according to Investopedia. Its share price fell more than 50% during the same period—its biggest one-month decline ever.
Crackdown season: Federal officials have also accused Aetna, Humana, and Elevance (formerly Anthem) of defrauding the government by pushing Medicare Advantage plans with the highest kickbacks in a civil lawsuit filed this month.—ML
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Dick’s Sporting Goods will spend $2.4 billion to acquire rival Foot Locker, hoping to boost its international footprint, attract a younger and more urban customer base, and corner the market on striped referee shirts Nike products.
While Dick’s draws a suburban, older crowd that’s probably more interested in being fitted for golf clubs and Skechers, Foot Locker’s youthful customers are more likely to be into the sneaker culture that Dick’s sees as key to its growth:
UBS analysts believe Nike could account for 35% of Dick’s total sales when the deal is completed.
Foot Locker, which will continue as a standalone brand, has 2,400 locations and some actually aren’t in American malls. (It operates in 20 countries, while Dick’s has yet to expand beyond US borders.)
Antitrust issues? Dick’s CEO Lauren Hobart said she’s “not expecting any regulatory concerns” from the FTC, despite these two sporting goods giants forming a superteam.
In stock: Investors had opposite reactions about this union of athletic gear distributors. Dick’s shares reached all-time highs in January, but closed down 15% yesterday. Foot Locker, meanwhile, became a takeover candidate thanks to a stock price that had fallen 41% this year due to tariff concerns Dick’s did not have…but finished up by a mammoth 80% on the day yesterday.—DL
This is kinda like when Frodo discovered that the gold tchotchke Bilbo gifted him was actually the One Ring. Harvard just found out that a “copy” of the Magna Carta it bought decades ago for $27.50 is, in fact, an extremely rare original from 1300.
Two British historians perusing Harvard’s archives made the realization and soon confirmed via spectral imaging that the presumed knockoff is really a 725-year-old relic. Experts say it’s worth tens of millions of dollars.
Signed by King John of England in 1215, the Magna Carta laid the foundation for modern concepts of law, inspired the US Constitution, and now serves as the subject of countless mediocre seventh-grade world history essays. The 1300 version at Harvard is believed to be one of only seven in existence. The four surviving copies from 1215 are all housed in the UK.
That sound you’re hearing is everyone with a gift shop copy of the Declaration of Independence suddenly getting their hopes up.—AE
Air traffic control at Denver International Airport was hit by communication outages earlier this week, Bloomberg reported, days after Newark Liberty International Airport was plagued by radio and radar problems.
Ukrainian President Volodymyr Zelensky arrived in Turkey yesterday for scheduled peace talks with Russia, but Vladimir Putin was a no-show, sending a low-level delegation in his place.
The Odyssey, Christopher Nolan’s next blockbuster, will be the first commercial feature film to be shot entirely on Imax cameras, The Hollywood Reporter…reported.
Jamie Dimon admitted he “emoted a little bit” during an expletive-laden JPMorgan Chase town hall meeting in February when he railed against working from home (he’s still against it).
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Decipher: Your task is to decode a famous line of poetry from a jumble of letters. Get after it, then brag to your eighth-grade English teacher.
Friday puzzle
Here is a notorious puzzle known as the “potato paradox.”
Fred brings home 100kg of potatoes, which consist of 99% water. He then leaves them outside overnight so that they consist of 98% water. What is their new weight?
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Today’s Word of the Day is: tchotchke, meaning “a trinket.” Thanks to Nate from Fairport, NY, and many others for the suggestion. Submit another Word of the Day here.
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The Supreme Court mulled birthright citizenship. After hearing oral arguments on President Trump’s executive order attempting to deny citizenship to babies born in the US to parents who are not citizens, SCOTUS gave 
Coinbase under investigation, hit with ransom attack. Coinbase’s wild week got much wilder when the New York Times reported yesterday that the SEC has been looking into whether the crypto exchange 
JPow warns of supply shocks. Fed Chair Jerome Powell, on whose every word the stock market seems to move, said at a conference yesterday that, longer-term, interest rates are likely to 
Host: Morning Brew’s 
