US OPEN: Bearish Friday on hotter PCE. Magnificent 7 extends losses 📉

Wall Street opened on the low note following a hotter PCE reading supporting Fed’s cautious stance on sticking to the current level of interest rates. Nasdaq and S&P500 are down 0,35%, DJIA loses 0,45% and Russell 2000 trades 0,25% lower.

The Fed’s preferred inflation gauge showed prices rising more than expected in February, with core PCE up 0.4% from the prior month and 2.8% year-over-year, exceeding forecasts. Reading was driven mainly by price pressures in specialised services like finance, healthcare, insurance). Higher inflation may keep the Fed cautious on rate cuts, especially given the uncertainty over the true economic effect of subsequent tariffs coming into effect.

Personal spending rose 0.4%, missing estimates, following January’s surprise decline. Economists warn that rising prices and slowing consumption could dampen growth. The report follows the Fed’s decision to hold rates steady while lowering its 2025 growth forecast and raising inflation projections. Officials still anticipate two rate cuts this year.

Volatility currently observed in the U.S. Source: xStation5

US100 (D1)

US100 extends losses from yesterday, as “there’s no Tesla” to counterbalance the selloff of other Big Tech stocks. Amid Mag7 companies, only Nvidia trades higher (NVDA.US: +0.4%) on expected chip tariffs. RSI remains neutral, slightly below 50, while further price pressure below faster EMA30 (light purple) heralds a potential test of the support around 19,4K.

Source: xStation5

Company news:

• Beam Therapeutics (BEAM.US) is up 1% after Bank of America upgrades it to buy, citing promising trial data for BEAM-302 in alpha-1 antitrypsin deficiency. Analyst sees it as a key value unlock. Beam also announced FDA clearance for its investigational drug, with more trial data expected in H2 2025.

• CureVac (CVAC.US) jumps 10% after the European Patent Office upheld its mRNA patent in a legal dispute with BioNTech. Analysts call it a positive milestone, though an infringement ruling on July 1 remains key. A favorable ruling could lead to damages assessment proceedings.

• Lexicon Pharmaceuticals surges 60% after securing an exclusive license deal with Novo Nordisk (NOVOB.DK) for obesity drug LX9851. The deal includes up to $1B in payments, with $75M in near-term milestones. Lexicon will complete pre-IND activities, while Novo Nordisk handles development and commercialization.

• Lululemon (LULU.US) drops 14% after issuing weak guidance, fueling US growth concerns.  Analysts cite sluggish American demand, margin pressures, and rising competition. Q1 revenue forecast of $2.34B–$2.36B missed estimates of $2.39B, and EPS guidance of $2.53–$2.58 fell short of the $2.78 estimate. Full-year EPS guidance of $14.95–$15.15 also missed the $15.38 consensus.

• Nippon Steel and US Steel (X.US) are in talks to salvage their merger, with Nippon offering to raise its planned $2.7B factory investment to as much as $7B. The deal, facing political scrutiny, has been delayed again, now expected to close in Q2 2025.

• Rocket Lab (RKLB.US)  add 2.5% after being selected for the US Space Force’s $5.6B National Security Space Launch program. Citi calls it a positive surprise, noting earlier-than-expected inclusion. Rocket Lab plans to have three Neutron rockets ready in 2026 and five more in 2027.