WSJ What’s News - Why It’s Taken Until Now for the U.S.’s First Coast-to-Coast Rail Operator

Episode Date: July 29, 2025

P.M. Edition for July 29. The merger deal between Union Pacific and Norfolk Southern would create a single company controlling coast-to-coast rail shipments for the first time in U.S. history. WSJ reporter Esther Fung discusses why the deal isn’t totally done yet, and why it’s taken this long to get a coast-to-coast rail operator. Plus, JPMorgan Chase is nearing a deal to take over Apple’s credit-card program. We hear from WSJ banking reporter AnnaMaria Andriotis about why the deal would be significant. And as tech companies build more electricity-hungry data centers to power artificial intelligence, utilities want the companies to pay more. Journal reporter Katherine Blunt describes how the dynamic is playing out across the U.S. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

A mega merger creates America's first coast-to-coast rail operator. Plus, why utilities and technology companies are at odds over who should pay for the electricity costs in the unprecedented data center buildout. Utilities have for a long time been increasing rates to make the investments needed to stabilize the grid at this time. And in some places, the sheer amount of demand coming from data centers specifically adds another layer of stress. And how one of the biggest credit card deals ever could bring JP Morgan

Chase and Apple together. It's Tuesday, July 29th. I'm Alex Zosila for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Union Pacific has agreed to acquire Norfolk Southern in a $71.5 billion deal, which would create the first company to control coast-to-coast rail shipments, joining 50,000 miles of railroad

tracks that span from the Jersey Shore to the ports in California. The union would create a single company controlling coast-to-coast rail shipments for the first time in U.S. history. The deal still requires regulatory approval from the Surface Transportation Board. Esther Fung covers transportation companies for the journal and joins me now. Esther, why did we not have a coast-to-coast railway operator before? The reason why we don't have one single coast-to-coast railway operator before? The reason why we don't have one single coast-to-coast rail operator before is largely due to regulators.

In the past, when there were mergers between major railroads, there were lots of traffic snarls and service disruptions that occurred because some of these railroad executives admitted that they were overconfident in their ability to combine networks that had hundreds of thousands of freight rail cars and the resulting service meltdown spooked shippers and made regulators very wary of approving such mergers again. So when big railways in the past have merged, what kinds of issues have resulted? When these major railways had merged, some of the big problems that have occurred was

they laid off too many people at once and in key positions, but then they realized there were some issues and the right person to resolve these is no longer there and then the bottlenecks happen. That is something the regulators do not want to see again. And Union Pacific and Norfolk Southern took pains this morning during the announcement and investor call to say that their networks are running well. They took pains to say that they will have a buffer of staff, locomotives, and other resources to manage this transition. The truth is we don't know until it happens.

Are we likely to see more consolidation within the transportation industry? Analysts expect further consolidation because this single-line railroad would have competitive advantages that the other two, BNSF and CSX, would struggle with. So it's about maintaining their competitive edge. That was WSJ Reporter Esther Fang. Thanks so much, Esther. Thank you. It's been a pleasure. The International Monetary Fund said today that the road ahead for the global economy has turned brighter this summer, though risks from the trade war remain. The U.S. and China saw some of the most significant upward forecast revisions, largely in recognition

of a tariff truce the two countries reached in June. The IMF projected that the U.S. will also get a boost from the budget deal President Donald Trump signed earlier this month, with the biggest benefit flowing from better incentives for corporate investment. The Commerce Department's report on second quarter U.S. growth is due tomorrow. Meanwhile, American consumers' economic mood improved this month, but remained clouded by concerns about tariffs and the labor market. That's according to the Conference Board, a research group that runs a monthly survey. The group said today that its consumer confidence index climbed to 97.2 from 95.2 in June.

About 30% of consumers said jobs are plentiful up from June. But the number who said jobs are hard to get grew more, rising to 19% from 17% a month earlier. Major U.S. indexes were down today. The S&P 500 fell 0.3%, ending its streak of record highs. The Nasdaq Composite slipped 0.4% from yesterday's record, while the Dow dropped 0.5% or 205 points. We're exclusively reporting that JPMorgan Chase is in advanced talks to take over Apple's credit card program. That's according to people familiar with the matter. Discussions between the country's biggest bank and Apple accelerated in recent months, with Apple telling JPMorgan it is the tech giant's preferred choice to replace Goldman

Sachs as its card partner. Still, the deal hasn't been signed and there are chances that talks could unravel because of a number of challenges associated with the Apple program. For more, I'm joined by WSJ banking reporter Anna Maria Andriotis. Anna Maria, what would be the significance of this deal? We're talking about one of the most popular credit cards that's attached to one of the largest tech companies in the world and that could potentially go to the biggest bank in the U.S.

So we're talking about a program that's very popular and the companies tied to it or vying to be tied to it are among the largest and quite frankly the most powerful from the tech and financial side. What would this mean for Goldman? If this program actually finally does move, this would be the final step in Goldman's exit from consumer lending. Goldman several years ago entered into consumer lending with a plan to become big on Main Street.

The credit card launch with Apple basically cemented those ambitions of Goldman. That's pretty much all done right now. Goldman has offloaded pretty much everything having to do with lending to consumers with the exception of Apple and this credit card program. So as we reported, the deal has not yet been signed and there are chances that it could unravel.

But as of now, the two sides have advanced significantly. That was WSJ reporter Anna Maria Andriotis. Thanks, Anna Maria. Thank you. Shares in Novo Nordisk plunged as much as 30% today, at one point wiping out almost $93 billion of the company's market capitalization after the Danish drug maker said headwinds for its blockbuster drugs, Ozempic and Wigovie, would cut its sales growth for the year. Novo has lost its lead in the booming market

for weight loss drugs, opening the door to competitors such as makers of knockoff versions of Novo's drugs and pharmaceutical giant, Eli Lilly. It's the latest in a series of challenges facing the once high-flying company, which also today named a new CEO. Coming up, as artificial intelligence demands a lot more electricity, a debate is raging about who will pay for it. That's after the break. Technology companies need an extraordinary amount of electricity to power data centers

at the core of the artificial intelligence race. Now, across the US, utilities are asking tech companies including Google, Microsoft, and Amazon to pay more to connect their new data centers to the power grid. I'm joined now by Catherine Blunt, who covers power and utilities for WSJ. Catherine, why exactly are tech companies being asked to pay more? In a number of places around the country, utilities are becoming concerned that the enormous cost of the new infrastructure that they need to build to serve a really significant build out of data centers could ultimately be borne by regular customers if tech companies cost of the new infrastructure that they need to build to serve a really significant buildout

of data centers could ultimately be borne by regular customers if tech companies don't ultimately need all the electricity that they say that they will. For example, if a utility spends a billion dollars to build a power line, largely to serve a data center, and the data center packs up and leaves in five years, it's possible that the remaining customers on the system would have to pay for that particular infrastructure. So, utilities are asking tech companies to pay more to take on the financial risks that other customers won't have to. So what are tech companies saying about this? To be clear, tech companies aren't saying we don't want to pay our fair share. They say that they do. They say that they're committed to doing that. But in some cases, they say,

look, we don't want to have to pay substantially more for this particular upgrade because it also serves other customers, not just us. The grid is a network, right? So if you add more transmission or you add another power plant, it does benefit customers other than the data center. And so basically, they're saying we understand the risks of so-called stranded assets, but we also don't want to take on more risk than necessary. And I'm curious what local communities are saying about this. Like a lot of communities where you see a sudden influx in demand from data centers, concern among regular folks that they ultimately end up subsidizing the build out of this infrastructure,

right? Because power costs have been going up substantially in a lot of places for a while now. And the idea of having to pay more for something that they didn't necessarily ask for is not necessarily a palatable idea. That was Wall Street Journal reporter, Catherine Blund. Thanks, Catherine. Thank you. For many years, workers and bosses had an understanding. Entry-level employees work hard for lower pay, while employers provide training and experience to give young professionals a foothold in the job market.

But WSJ reporter Lindsay Ellis, who covers workplace and careers, told our tech news briefing podcast that now artificial intelligence threatens to completely break that contract, which was already weakened. Some of the sectors that we've been pointed to are information, tech jobs, finance, insurance, technical services. For example, Grindr's CEO said that they would rather hire more seasoned engineers instead of junior coders for years and years we've done that, especially for social media. This year, instead of coaching a summer intern, I'm just going to talk into chat GPT and

it's going to clean up the copy and those posts will be ready for airtime. To hear more, listen to today's episode of Tech News Briefing. And finally, the gunman who killed four people in a Midtown Manhattan skyscraper yesterday accused the National Football League in a suicide note of concealing the dangers of the sport on players' brains. That's according to a New York Police Department official. Police said that 27-year-old Shane Tamura used an M4 rifle to kill an NYPD police officer in the lobby of the building,

as well as a security guard, an executive of financial firm Blackstone, and a real estate firm employee before shooting himself in the chest. Police say Tamura, who lived in Las Vegas and had a history of mental illness, played football in high school. A spokesperson for the NFL referred a request for comment to the NYPD. And that's what's news for this Tuesday afternoon. A spokesperson for the NFL referred a request for comment to the NYPD. And that's what's news for this Tuesday afternoon. Today's show is produced by Pierre Bienamé with supervising producer Michael Kosmides.

I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.