U.S. stock futures are edging lower in premarket trading after tumbling Wednesday on the back of a hotter-than-forecast inflation reading that dampened hopes that the Federal Reserve will cut rates any time soon. Benchmark 10-year U.S. Treasury yields are little changed after the sticky and surprising Consumer Price Index numbers sent them to their highest levels of the year, with the Producer Price Index on deck today; shares of Alpine Immune Sciences (ALPN) are surging after Vertex Pharmaceuticals (VRTX) offered $4.9 billion for the biotech firm; shares of Regeneron Pharmaceuticals (REGN) are falling as the Department of Justice accuses it of price gouging for its vision drug Eylea; and Amazon (AMZN) Chief Executive Officer (CEO) Andy Jassy says the tech giant is committed to cost cutting while investing heavily in artificial intelligence (AI). Here’s what investors need to know today.
1. US Stocks Point Lower After Wednesday’s Inflation-Fueled Sell-Off
U.S. stock futures were pointing lower after tumbling Wednesday following the hot inflation reading that dampened hopes that the Federal Reserve—which has kept rates at a 23-year high to reduce inflationary pressure—will cut rates any time soon. Major U.S. equities indexes fell after the latest Consumer Price Index (CPI) data showed inflation rose 3.5% year over year in March, up from February’s reading of 3.2%. The S&P 500 dropped 1.0%, the Dow 1.1%, and Nasdaq 0.8% on Wednesday amid growing uncertainty on the path of interest rate cuts from their decades-long high.
2. Treasury Yields Little Changed, With PPI On Deck
U.S. government bond yields were little changed after soaring Wednesday to their highest levels of the year following Wednesday’s hot CPI data. The benchmark 10-year Treasury yields settled at 4.559% after its biggest one-day gain since Sept. 2022. Bond traders are readying for 10-year yields surpassing 5% amid a scenario that the Federal Reserve doesn’t cut interest rates this year, according to Bloomberg. While not usually as closely watched as the CPI, the March Producer Price Index from the the Bureau of Labor Statistics at 8:30 a.m. ET may give more clues on the Fed’s rate path. Economists surveyed by The Wall Street Journal and Dow Jones Newswires expect wholesale prices to have grown monthly by 0.3% in March, and 0.2% when excluding food and energy.
3. Alpine Immune Stock Soars on Vertex’s $4.9 Billion Offer
Shares in Alpine Immune Sciences (ALPN) were up 37% about two hours before the opening bell after Vertex Pharmaceuticals (VRTX) announced it is buying the clinical-stage immunotherapy company in a deal valued at around $4.9 billion. Vertex shares were down less than 1%. The transaction, which will give Vertex access to the biotech’s protein-based immunotherapies to treat autoimmune and inflammatory diseases, values each Alpine share at $65, representing a 38% premium to Wednesday’s closing price of $47.04.
4. Regeneron Falls After DOJ Accuses Biotech Firm of Fraudulent Price Reporting
Shares of Regeneron Pharmaceuticals (REGN) were down 1.7% in premarket trading after the U.S. Department of Justice accused the drug maker of fraudulent practices around its blockbuster vision-impairment drug Eylea to keep prices high. The agency alleged that Regeneron “fraudulently inflated Medicare reimbursement rates for Eylea by knowingly submitting false average sales price reports to the Centers for Medicare and Medicaid Services that excluded certain price concessions.” Eylea treats a vision disease known as wet macular degeneration.
5. Amazon CEO Andy Jassy Seeks More Cost Cuts as Firm Focuses on AI
Amazon (AMZN) Chief Executive Officer (CEO) Andy Jassy said he will keep looking to reduce costs even as the company continues its focus on artificial intelligence (AI). “We believe we can lower costs even further while also delivering faster for customers,” he said in his annual shareholder letter published Thursday. He said the company’s “next pillar” of growth following Marketplace, Prime, and AWS, is Generative AI. He also said had “increasing conviction that Prime Video can be a large and profitable business on its own,” and that Amazon is on track to launch its first production satellites in 2024. Amazon shares were down slightly in premarket trading.
