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Fed’s Waller: January jobs data an upside surprise, if it continues a policy pause may be appropriate

Summary:
  • Governor open to pausing rate hikes at March meeting if shows labor market strength.
  • January job growth of 130,000 positions was an upside surprise, influencing Waller’s policy stance.
  • Waller previously dissented in January, favoring a 25 basis point rate cut due to weak job growth and unemployment risks.

WASHINGTON, Feb 23 (Reuters) – Federal Reserve Governor Christopher Waller said he was open to leaving on hold at the Fed’s March meeting if upcoming February jobs data indicates the had “pivoted to a more solid footing” after a weak 2025.

Unexpectedly strong January job growth of 130,000 positions was “a surprise to the upside,” and if that continues in February “my view of appropriate may tilt toward a pause at our upcoming meeting,” Waller said in remarks prepared for delivery at a National Association for Business Economics conference.

Waller dissented against the decision at the Fed’s January meeting to keep rates on hold, saying he felt it would be appropriate to cut the policy rate another quarter percentage point given weak job growth and what he saw as risks unemployment could rise.

At the time he was still under consideration as a possible Fed chair by President Donald Trump, who has called on the central bank to make sharp rate cuts. Trump has since nominated Kevin Warsh to take over when Fed chair Jerome Powell’s term ends in May.

Waller said he regarded inflation now as largely pushed higher by the ‘s , and likely to fade as firms finished adjusting to the levies.

A Friday ruling that tossed out most of the new duties has left the situation again in flux, but Waller said it was “unlikely to have a significant impact” on the path of monetary policy.

At this point he said he viewed inflation, once stripped of the lingering impact of tariffs, as likely close to 2%, leaving him to focus on the state of the job market.

The challenge, he said, is to determine whether the jump in January jobs showed the market had “turned a corner” — a possibility, he said, given ongoing economic growth — or whether that will be revised lower and the weak hiring return in February.

February jobs data will be released on March 6, ahead of the Fed’s March 17-18 meeting.

The January jobs report “was clearly a surprise to the upside and suggests that the labor market may be turning a corner,” Waller said. “But if the good labor market news of January is revised away or evaporates in February, it would support my position at the FOMC’s last meeting, that a 25-basis-point reduction in the policy rate was appropriate.”

 

(Reporting by Howard Schneider; Editing by Chizu Nomiyama )

 

US Supreme Court to hear bid by oil companies to toss climate suits

Summary:
  • The US accepted an appeal by and on February 23, 2026.
  • The lawsuit in Boulder, Colorado, alleges the companies misled the public about their role in climate change.
  • The companies argue the case interferes with federal regulations.

WASHINGTON, Feb 23 (Reuters) – The U.S. Supreme Court has agreed to hear a bid by ExxonMobil and Suncor Energy to scuttle a lawsuit brought by officials in Boulder, Colorado that seeks to hold the oil companies liable for helping fuel climate change in a case that could affect dozens of similar lawsuits around the country.

The justices on Monday took up an appeal by the companies of a lower court’s ruling that let the litigation move forward. The suit alleging state law violations by the companies seeks unspecified monetary damages for costs incurred by Boulder associated with mitigating the impact of climate change.

President Donald Trump’s administration backed the appeal by the oil companies.

The Boulder litigation is the latest chapter in efforts by numerous U.S. jurisdictions seeking damages from companies that extract, produce, distribute or sell . These plaintiffs are seeking compensation for harms they attribute to the role these companies played in causing climate change.

The burning of fossil fuels releases greenhouse gases such as carbon dioxide into the atmosphere, causing more of the sun’s heat to be trapped, which leads to a rise in the average global temperature over time.

The Boulder government officials in their 2018 lawsuit accused the U.S.-based Exxon and Canada-based Suncor of misleading the public about the role that their products played in exacerbating climate change while profiting from unchecked fossil fuel sales. The companies deny wrongdoing.

The plaintiffs have said the oil companies should cover past and future costs incurred by the city and county governments for steps taken to mitigate the effects of climate change, citing infrastructure repairs, environmental damage, emergency management and harms to public health.

The companies urged lower courts to dismiss the case, arguing among other things that Boulder’s lawsuit would illegally interfere with the federal regulation of under the Clean Air Act.

The Colorado Supreme Court in May 2025 denied their request, prompting the appeal to the U.S. Supreme Court.

Oil companies for years have been trying to avoid the burgeoning volume of climate-related litigation, but so far have achieved little success.

Nearly 60 state and local governments have brought lawsuits like these seeking billions of dollars in damages, with more continuing to be filed, the companies told the Supreme Court in a filing.

The has acted in various ways to bolster the companies’ positions. Last year, it launched two preemptive cases seeking to stop Hawaii and Michigan from filing climate-related lawsuits against oil majors that the administration said would imperil domestic energy production.

The Supreme Court previously turned away a similar bid by Sunoco and other oil companies to throw out a climate-related lawsuit by Honolulu after Hawaii’s top court allowed it to proceed.

That lawsuit seeks to hold the companies liable for their alleged role in contributing to extreme weather affecting the region, as well as a significant rise in the average sea level along the Honolulu Pacific coastline, a development linked to flooding, erosion and beach loss.

(Reporting by John Kruzel; Additional reporting by Andrew Chung; Editing by Will Dunham)

 

Software companies face higher borrowing costs, tougher scrutiny as AI threatens businesses

Summary:
  • US are delaying due to higher and lender scrutiny amid fears.
  • for US tech firms are pricing in modestly higher defaults, with forecasting a 3% to 5% rise in defaults.
  • Future software sector debt deals are expected to include stricter covenants and higher yields as banks and investors remain cautious.

Feb 23 (Reuters) – Software companies are delaying debt deals as higher borrowing costs and tougher scrutiny from lenders weigh on the sector, at a time when mounting pressure from artificial intelligence threatens their business models, industry sources said.

Software firms both in the U.S. and elsewhere have already paused or postponed fundraising efforts as lenders and investors expect AI to upend the industry. These concerns have been underscored in , where spreads for risky companies have started to price in more defaults. AI jitters also affected private capital manager Blue Owl, whose shares slid after its latest move to sell $1.4 billion in assets to return money to investors.

“We expect AI disruption risk to be increasingly reflected over 2026 to early 2027, particularly for lower‑quality credit sectors with elevated refinancing needs — and more so in the U.S. than in Europe,” said Matthew Mish, UBS’ head of credit strategy.

Leveraged loans, especially for U.S. , have begun to price modestly higher defaults. UBS expects defaults to rise 3% to 5% in a scenario of quicker market disruptions, compared with market expectations for an increase of 1% to 2%.

“The disruption is going to play out over two years,” Mish said. “We ultimately think that the market will price in a majority, but not all of the defaults that we’re forecasting.”

Even those companies whose debt is deemed higher quality and less vulnerable to the impact of AI have held off on tapping markets until trading levels recover, one banker said.

The market will closely watch investor reception to Qualtrics, a well-established software maker whose lenders will be in the market next month to raise a $5.3 billion package for its purchase of rival Press Ganey Forsta, a source familiar with the matter said.

Qualtrics declined to comment. Press Ganey did not immediately respond to a Reuters request for comment.

LEVERAGED LOANS

The potential disruption from AI is having a bigger impact on more leveraged loan deals than high-yield bond deals, according to two bankers who declined to be identified discussing transactions.

Technology industry borrowers, of which 60% are in software, account for the largest portion of leveraged loans, according to Brendan Hoelmer, head of U.S. default research at Fitch Ratings.

Tech loans represent 17% of outstanding loans in the leveraged market, valued at $260 billion.

Meanwhile, tech borrowers make up just 6% of outstanding high-yield bonds totaling $60 billion, Hoelmer noted. Of those, 70% are to software borrowers.

A majority of the software sector’s exposure is tied to lower – with 50% of the loans holding a “B- or lower” credit rating – loans which typically denote a higher risk of default, Morgan Stanley estimates.

Private credit software and services exposure is about 20%, BNP Paribas analysts estimate.

U.S. stocks have also been roiled by AI, starting with investors dumping shares of software companies, then companies in sectors vulnerable to automation. The software index is down 20% so far this year.

Only 0.5% of outstanding software sector loans are due this year, while 6% are due in 2027, Fitch’s Hoelmer said. On the high-yield side, only 0.7% of software debt is due this year and 8% in 2027, he added.

Still, companies in the sector that have tried to tap U.S. debt markets have faced significantly higher borrowing costs from banks to underwrite the debt. Banks marketing the loans also are facing more skepticism from potential investors, according to the two bankers.

Banks likely will ask for higher yields on new debt and deeper discounts on earlier debt, said the first banker, who declined to be named discussing specific deals.

Companies will come off the sidelines when prices improve, the first banker said.

Future deals are also likely to include stricter covenants, or legal protections for investors, to get done, the second banker noted. These include maintenance covenants, which force borrowers to keep their debt-to-earnings ratios below specific levels, the banker added.

Several planned deals in the tech sector have been pulled or delayed since late January. European digital service provider Team.blue postponed an extension of its 1.353 billion euro ($1.60 billion) term loan from September 2029 and a repricing of its $771 million term loan, according to the first banker. Team.blue declined to comment.

There are currently no leveraged loan deals for software companies, as companies and banks wait for trading levels on existing debt in the sector to recover from their losses since late January, when AI disruption fears rose.

Meanwhile lower-rated companies with upcoming maturities “are likely to face greater refinancing and default risk in 2026,” according to a Moody’s Ratings report published in January.

“I don’t really see software and business services as being hot sectors for issuance over the next year,” said Jeremy Burton, portfolio manager on the leveraged finance team of asset manager PineBridge Investments. “The technology is changing so quickly that you’ve really got to be confident.”

($1 = 0.8482 euros)

 

(Reporting by Matt Tracy and Saeed Azhar, editing by Lananh Nguyen and Diane Craft)

 

JCPenney closes Springfield location, laying off 74

National chain will close its Town Center location on May 29, laying off 74 workers and marking the loss of one of the site’s original anchor stores.

The company announced the of the store at 6699 Springfield in Springfield in a Feb. 18 letter to the state under the federal (WARN) Act. will begin on May 15 and continue through May 29.

“Regretfully, we are unable to continue our current lease terms for this store location and have been unable to find another suitable location in the market,” JCPenney said in an email to Virginia Business. “We are grateful to our dedicated associates and the loyal customers who have shopped at our Springfield, VA, location through the years, and we hope to continue serving them throughout our nearly 650 stores nationwide and at JCPenney.com.”

The employees who work at the store aren’t represented by a union and don’t have any bumping rights, the WARN letter said. However, the company informed employees that its leadership will explore whether any jobs are available at other JCPenney locations.

“Closing the store was a difficult decision,” the company said in a letter to employees. “We thank you for the time and effort you have dedicated to JCPenney.”

It was not immediately made clear if Springfield Town Center has another tenant lined up for the property. Springfield Town Center owner PREIT declined to comment.

The JCPenney location opened in 1973, when the was known as Springfield Mall. It was among the shopping mall’s original anchors, and Prince Charles (now King Charles III) and Princess Diana visited it in 1985. The location survived the mall’s multimillion-dollar transformation into a shopping center in the early 2010s.

Headquartered in Plano, Texas, JCPenney has 645 stores nationwide. Last year, the company reported $6.3 billion in fiscal 2024 revenue, down 8.6% from the previous year.

Hoskins to exit Fairfax EDA after six-year tenure

SUMMARY: 

  • to step down as EDA president and CEO after six years
  • During tenure, county gained 64,000 jobs and $47B GDP growth
  • Authority expects to announce a successor later this year

After more than six years leading the , Victor Hoskins plans to leave his post as president and CEO to return to the private sector, according to an announcement Monday.

FCEDA credits Hoskins with helping to secure nearly 64,000 jobs. During his tenure, the county’s gross domestic product grew by $47 billion, to $177 billion.

“Victor Hoskins has been an exceptional economic leader for Fairfax County and a strategic force for growth during some of the most competitive and complex times in recent history,” James Quigley, chair of the FCEDA Commission, said in a statement. “Under his leadership, FCEDA secured some of the world’s most innovative companies, ignited meaningful , strengthened key industries and cemented Fairfax County’s place as a global competitor.”

Six years is the longest Hoskins has kept a position. That he stayed put so long, Hoskins said Monday, “says a lot about what I thought about the people of Fairfax.” By the end of 2026, he plans to move to a company where he’ll do advisory work with family investment offices on large-scale public-private investments.

The FCEDA commission will soon launch a search for the organization’s next president and CEO and expects to announce a successor later this year.

Legacy

Hoskins can count a number of successes in his time at FCEDA. Under his leadership, the Fairfax County Board of Supervisors funded the authority’s talent initiative to grow workforce competitiveness across Northern Virginia. This program engaged more than 17,000 employers and connected more than half a million job seekers to jobs, according to a news release.

During his tenure, companies such as Microsoft, Google, Meta and Blue Origin announced new locations and expansions in the county. Among the successes: In 2022, Alarm.com, a cloud-based platform for home and business security, announced plans to invest $2.6 million to expand its technology research and development division, creating 180 jobs.

For Hoskins, who grew up poor in Chicago, leading the FCEDA has been about helping people. By saving a job, he saved a household, he said.

“That’s how I talk to my people,” Hoskins said. “When I talk to them about their work, I say, ‘Stop focusing so much on I got to get this deal. Focus on what the deal is going to do for our community.'”

It hasn’t been all celebrations. Over the last year, FCEDA tracked the thousands of federal employees who were let go as well as at federal contractors as the worked to cut the federal payroll and claw back billions in federal contracts. Hoskins led the authority’s efforts to connect laid off federal workers with job openings.

The grimness of the layoffs didn’t hasten his departure. “I’ve been through worse,” Hoskins said. “Hey, I went through COVID. Come on. I had to shut down the office, and everybody was on a screen … I like the challenge. Me? I love it when it’s tough.”

A proponent of regional collaboration, Hoskins formed the Northern Virginia Alliance with neighboring localities in 2019. Other leaders didn’t embrace the idea right away. They would say, “‘No one has every cooperated in Northern Virginia. Why start now?,'” recalled Hoskins, who served as director of Arlington Economic Development from 2015 to 2019 and helped lead the successful effort to secure .com’s HQ2 East Coast headquarters.

“I kept going back to them. I’m going like, ‘Well, remember what happened when we did Amazon HQ2? Remember when we worked together? It was four jurisdictions working together on Amazon HQ2, and we got it. We got the biggest deal in the world. Are you kidding me? Look what happens when we work together.'”

Today, Hoskins also serves as vice chair of Connected DMV, which works to drive improvements to social, digital and physical infrastructure across Washington, D.C., Maryland and Virginia.

The organization operates the Quantum World Congress, an annual event launched in 2022 to gather members of the quantum ecosystem. It attracts more than 1,500 people from 31 countries, according to FCEDA. Connected DMV also organizes spaceNext, a conference regarding the new space economy that was held last week in Tysons. Hoskins was still riding high from the event Monday. Both events are near Hoskins’ heart.

“If I could push a button and start all over, I’d go headlong into space,” Hoskins said. “I’d become an aerospace engineer, and I would work on rockets. I would work on large structures in space. To me, that’s the new real estate.”

Past and future

Earlier in his career, Hoskins was deputy mayor for planning and development in Washington, D.C.

As vice president of Washington, D.C.-based Quadel Consulting, Hoskins led the delivery of affordable housing consulting and training services. His resume also includes a stint as lead director of mid-Atlantic markets for Fannie Mae and three years spent as cabinet secretary of Maryland’s Department of Housing and Community Development.

He earned his bachelor’s degree from Dartmouth College and a master’s degree in city planning from the Massachusetts Institute of Technology.

In 2023, Hoskins received a presidential lifetime achievement award from then-President Joe Biden. The award honored Hoskins for his “lifelong commitment to building a stronger nation through volunteer service.”

Hoskins and his wife, Diane, gave $50,000 to George Mason University in 2024. This year, he began his term as chair of the board for the Capital Area Food Bank. The work is important to him, Hoskins said, because he has experienced food insecurity.

“I know what that’s like, so I want to change that,” he said.

Regarding his future advisory job, Hoskins said, “My work will be in a Greater Washington region. It’ll stretch from projects in Baltimore all the way down through Northern Virginia, maybe one or two in Richmond. We’ll see.”

Hoskins is excited about the job because he’s worked in both the private and public sectors, and he believes he can help one side see the other’s point of view. “When you’re on both sides of the table, you do really develop a different perspective,” Hoskins said.

In his next chapter, Hoskins is also eager to invest in some real estate projects, something he put off as CEO of FCEDA to avoid the appearance of conflict. “January 1, next year, I’m at it,” Hoskins said.

He will continue to live in Washington, D.C., where he’s lived for about 15 years. “My wife walks to work,” he said. “There was no changing that.”

Trump warns of higher tariffs for countries that ‘play games’ after court ruling – UPDATED

WASHINGTON, Feb 23 (Reuters) – U.S. President Donald Trump on Monday warned countries against backing away from recently negotiated trade deals with the U.S. after the struck down his emergency tariffs, saying that he would hit them with much higher duties under different trade laws.

Trump, in a series of social media posts, said he also may impose license fees on trading partners as uncertainty over his next tariff moves gripped the global economy and sent stocks lower.

“Any Country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to. BUYER BEWARE!!!” Trump wrote on Truth Social.

Trump said that despite the court’s decision to invalidate his tariffs under the International Emergency Economic Powers Act, its decision affirmed his ability to use tariffs under other legal authorities “in a much more powerful and obnoxious way, with legal certainty, than the Tariffs as initially used.”

He suggested that the U.S. could impose new license fees on trading partners, but did not provide any details.

A spokesperson for the U.S. Trade Representative’s office did not immediately respond to a request for further comment on Trump’s plans.

In Brussels, the European Parliament decided on Monday to postpone a vote on the European Union’s trade deal with the U.S. after Trump imposed a new temporary import duty of 15% on imports from all countries.

EU goods under the deal would face a 15% U.S. tariff 15% U.S. tariff, with exemptions for hundreds of food items, aircraft parts, critical minerals, pharmaceutical ingredients and other goods, while the EU would remove duties on many imports from the U.S., including industrial goods.

Trump on Friday initially announced the temporary duty under Section 122 of the Trade Act of 1974 at 10%, but raised it to 15%, the maximum allowed under the statute, on Saturday.

The new duty is set to take effect at 12:01 a.m. EST (0501 GMT) on Tuesday. At that same moment, the U.S. Customs and Border Protection agency said it would stop collecting the now-illegal IEEPA duties, more than three days after the Supreme Court’s ruling.

UNCERTAINTY UNNERVES MARKETS

stocks fell in early trade on Monday, as renewed tariff uncertainty in the wake of the unnerved investors. The Dow Jones Industrial Average fell 1.34%, The S&P 500 fell 0.65%, while the tech-heavy also was down 0.65% in mid-morning trade.

The U.S. dollar index fell 0.2% against major currencies.

The path forward for Trump’s foreign trade deals remained uncertain, with China urging Washington to scrap tariff measures, the EU freeze on its approval and India delaying planned talks.

U.S. Trade Representative Jamieson Greer said over the weekend that the expected to open new Section 301 unfair trade practices investigations on several countries, a legal step expected to allow it to threaten new tariffs.

Trump used his social media post to again lash out against the justices who ruled against him, which included two who he had appointed during his first term in the White House. In its ruling, authored by conservative Chief Justice John Roberts, the court reasserted its power to check the power of the president.

The president also expressed concern that the top court could rule against his administration’s bid to restrict birthright citizenship in its forthcoming decision in that case.

(Reporting by Susan Heavey, David Lawder and Doina Chiacu, writing by David Lawder; Editing by Doina Chiacu, William Maclean and Nick Zieminski)

Dominion Energy forecasts annual profit below estimates, raises spending plan

Feb 23 (Reuters) – Dominion Energy forecast annual profit below expectations on Monday, but raised its five-year by nearly 30% as the utility ramps up its efforts to meet soaring .

U.S. utilities have been adding billions of dollars to their capital expenditure budgets amid extreme weather conditions and rising requests for new power capacity from dedicated to and cryptocurrency.

Richmond, Virginia-based Dominion Energy said it had contracted nearly 48.5 gigawatts of as of December, up 1.4 GW from September.

Its customers include such as Alphabet, , Microsoft, Meta and Equinix, as well as private firms such as CoreWeave and CyrusOne.

Dominion’s services the world’s largest data center market, which surpasses the combined capacity of the next five largest data center markets in the U.S., according to the company.

Dominion expects to spend $64.7 billion from 2026 through 2030 in capital investments, compared with its prior five-year capital budget of $50.1 billion through 2029.

However, its shares fell 1.4% in premarket hours after the company forecast fiscal 2026 of $3.45 to $3.69 per share, where the midpoint was below analysts’ average estimate of $3.60, according to data compiled by LSEG.

The company’s fourth-quarter operating expenses were up nearly 11% to $3.33 billion from a year ago, which offset an otherwise positive quarter.

Dominion’s adjusted profit for the quarter ended December 31 came in at 68 cents per share, narrowly beating estimates of 67 cents.

 

(Reporting by Dharna Bafna in Bengaluru; Editing by Shreya Biswas)

 

RIFA backs incentives deal for Pittsylvania industrial site

A development appears to be percolating in .

On Friday, members of the unanimously approved a local performance agreement, which includes details of incentives used to woo a soon-to-be-revealed company to the in , according to Matt Rowe, Pittsylvania County’s director.

The meeting’s agenda noted the governor’s office is expected to make an economic development announcement related to the agreement next week. The development’s code name, according to the agenda, is Project Volare.

A collaboration among Pittsylvania County, the Town of Hurt and the City of , the authority works to develop the Southern Virginia Multimodal Park, which is now more than 1,000 acres.

The agenda for Friday’s specially called meeting also reported the authority and county will provide a grading grant of up to $1.7 million, an “encumbrance relocation” grant of $7.5 million and a local enterprise zone jobs grant of about $1.55 million.

Additionally, the members approved a local enterprise zone waiver of building permit and water and sewer fees estimated to be valued at $1 million. The project will also receive a 70% tax rebate on real property taxes and machinery and tools taxes for a decade.

On Tuesday, both the Pittsylvania Board of Supervisors and Danville City Council approved documents supporting a $7.5 million low-interest loan from the Virginia Tobacco Region Revitalization Commission to the authority for developing the Southern Virginia Multimodal Park.

In January, the county Board of Supervisors approved the rezoning of nearly 225 acres from residential and agricultural zoning to M-2, Industrial District-Heavy Industry zoning, to allow the property to be used for in an expansion of the Southern Virginia Multimodal Park.

In a Dec. 14, 2025, letter to the Pittsylvania Planning Commission, Rowe wrote that once the Southern Virginia Multimodal Park is fully developed, “the property will result in transformational and investment opportunity.”

The was the site of a Burlington Industries textile mill until 2007. The RIFA formed in 2017 and the park received its current name in 2020.

The RIFA operates under an agreement in which Pittsylvania foots 61% of the project’s costs and receives that much in revenue, while Danville gets a 35% share and Hurt receives 4%.

Staunton River Plastics, a subsidiary of Ohio-based Rage Plastics, became the first tenant of Southern Virginia Multimodal Park when it opened a facility there in 2024.

Wall Street ends higher after Supreme Court rules against Trump tariffs

Feb 20 (Reuters) – U.S. stocks ended higher on Friday, led by gains in , and other heavyweights after the struck down President Donald Trump’s global tariffs.

The U.S. top court, which has a conservative majority, ruled 6-3 against Trump’s global tariffs, enacted last year under a federal law meant for national emergencies.

Trump called the ruling a “disgrace” and said he would impose a 10% global tariff for 150 days under Section 122 of the Trade Act of 1974 to replace emergency duties that the Supreme Court struck down.

Investors were relieved that Trump’s newly announced global tariff was not higher, said Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina.

“Today is a removal of some uncertainty, and we’re on to the next phase,” Dickson said.

Some of Wall Street’s most valuable and widely held companies rose, including Google-parent Alphabet Amazon and Apple.

Shares of U.S. toymaker Mattel, online furniture retailer Wayfair, Pottery Barn-owner Williams-Sonoma and luxury furniture retailer RH – some of the companies that were hit by the tariffs – also gained.

Thousands of companies around the world have filed lawsuits challenging Trump’s sweeping tariffs and sought refunds on the duties they have paid. There is a risk more than $175 billion in U.S. tariff collections will need to be refunded, according to Penn-Wharton Budget Model economists.

According to preliminary data, the S&P 500 gained 48.41 points, or 0.71%, to end at 6,910.30 points, while the gained 207.14 points, or 0.91%, to 22,889.87. The Dow Jones Industrial Average rose 233.01 points, or 0.47%, to 49,628.56.

Data released early in the day showed U.S. economic growth slowed more than expected in the fourth quarter, while a separate reading indicated inflation picked up in December.

Traders see just over a 50% chance the Fed will cut by its June policy meeting, according to CME’s FedWatch Tool.

Investors jittery about the health of Wall Street’s AI rally will scrutinize Nvidia’s quarterly results next Wednesday. AI-linked technology stocks have gyrated in recent months due to concerns about high valuations and limited evidence that massive investments in AI are driving revenue and profit growth.

Industries ranging from software to logistics have also been hit by concerns that rapidly improving AI tools could disrupt their business models and steepen competition.

Akamai Technologies slumped after the cloud company forecast first-quarter adjusted profit below Wall Street estimates.

(Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru, and by Noel Randewich in San Francisco; additional reporting by Sinead Carew in New York; Editing by Pooja Desai and David Gregorio)

 

Virginia data center tax reform passes House as other sales tax bills stall

SUMMARY: 

RICHMOND — Two pieces of legislation introduced by Del. Rip Sullivan, D-Fairfax, to update the state’s sales tax were heard in the House and met with different outcomes. 

House Bill 897 and House Bill 900, both patroned by Sullivan, looked to adjust Virginia’s sales and use taxes.

“Our structure is badly outdated in Virginia,” Sullivan said. “It’s been way too long since we’ve taken any real action to update it.”

HB 897 requires data centers to utilize noncarbon emitting generators and backup sources as well as demonstrate a commitment to clean energy in order to qualify for existing data center sales and use tax exemptions.

“HB 897 is built on a very simple premise — that if the data centers here in Virginia want this tax exemption, this enormously valuable tax exemption, they have to make good on their supposed commitment to us,” Sullivan said.

Virginia has incentivized data center development. The state gave $5.2 billion in tax incentives and grants between fiscal years 2015 and 2024, according to a 2025 report by the Joint Legislative Audit and Review Committee. During this period, data center and use tax exemptions totaled $2.7 billion, accounting for more than half of the state’s total incentive spending.

Freedom Virginia is a nonpartisan advocacy organization focused on affordability and financial stability for families across the commonwealth. Co-Executive Director Ryan O’Toole emphasized the importance of bills like HB 897 and holding data centers accountable.

“That’s nearly $2 billion the state did not make, that it could have otherwise used to make life more affordable for people by investing in affordable child care, affordable health care, affordable housing, all things that people are struggling with these days,” O’Toole said.

Freedom Virginia is not opposed to data centers.

“They’re a good tool for the commonwealth,” O’Toole said. “But they should be paying for the energy that they use and the costs associated with that energy.”

HB 897 passed the House on a 61 to 34 vote.

State sales and use tax

Legislation regarding wider tax restructuring remains stalled over debate between Republicans and Democrats, despite headway with data center tax reform.

HB 900 aimed to decrease the state’s retail sales and use tax from 4.3% to 4% while expanding taxes to additional services like recreational and sports facilities, salons, dry cleaning and streaming services, among others. The bill also proposed a 20 cent delivery fee and additional transportation taxes in Northern Virginia.

“It’s inefficient, it’s inequitable and HB 900 … would modernize Virginia’s sales tax structure while lowering the overall sales tax around the commonwealth,” Sullivan said. “That would have direct benefits for residents as well as local and state economies, not to mention our aging infrastructure.”

HB 900 and legislation like it have been contentious among lawmakers. The bill, along with several others, were continued to 2027.

There was much debate around HB 978, sponsored by Del. Vivian Watts, D-Fairfax. The bill would have broadened the sales and use tax base to goods and services similar to those included in Sullivan’s measure, while eliminating the grocery tax.

Terry Rephann, a regional economist at the Weldon Cooper Center for Public Service, said such wholesale changes to tax codes were unlikely to succeed.

“There’s going to be a powerful constituency opposed to that, and that’s anyone that’s working in these industries,” Rephann said. “That’s a lot of folks, that’s a lot of workers, it’s a lot of business owners.”

However, many economists advocate for broadening the sales tax base to services for a variety of different reasons, according to Rephann.

“Because it’s more equitable to do that and also for practical reasons, and that is that an increasing percentage of the consumption is in these services,” Rephann said.

Senate Minority Leader Ryan McDougle, R-Hanover, flanked by Republican lawmakers at a press conference earlier in the month, spoke firmly against such expansion because it goes against the affordability Virginians need and Democrats campaigned on.

“The argument that the Democrats are making is if we make you pay taxes on more things, and that tax is higher and it takes more money out of your pocket, somehow that’s affordable,” McDougle said. “That is ridiculous.”

The bills proposing sales tax expansion would cost Virginians an estimated $765 in additional expenses, while Republicans say they have worked to reduce the tax burden.

“They are all simply necessitated in order to fund the budget-busting excesses of our friends on the other side,” said Sen. Mark Obenshain, R-Harrisonburg.

Even with progress on many of the tax bills halted this session, Rephann still expects to see an expansion of the state’s tax base at some point in the future.

“I think there will come a time when the revenue needs exceed the revenue capacity,” Rephann said.

Capital News Service is a program of Virginia Commonwealth University’s Richard T. Robertson School of Communication. Students in the program provide state government coverage for a variety of media outlets in Virginia.