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U.S. Stock Futures Hold Steady Amid Geopolitical Tensions and Fed’s Hawkish Stance

U.S. stock index futures showed modest gains in after-hours trading on Thursday, as investors awaited the release of nonfarm payrolls data to gauge the possibility of interest rate adjustments later this year.

Following a volatile session that saw significant declines in Wall Street indexes, driven by a combination of escalating geopolitical tensions between Israel and Iran and hawkish statements from Federal Reserve officials, futures markets stabilized.

S&P 500 Futures edged up 0.06% to reach 5,200.25 points, while Nasdaq 100 Futures climbed 0.07% to 18,087.75 points as of 20:01 ET (00:01 GMT). Dow Jones Futures remained steady around 38,927.0 points.

Investors were eagerly anticipating the release of March’s nonfarm payrolls data on Friday, hoping for insights into the labor market’s trajectory. Any signs of a slowdown in job growth could provide further motivation for the Federal Reserve to consider interest rate cuts, especially in the context of concerns about inflation and employment dynamics.

Despite recent positive surprises in nonfarm payrolls, indicating ongoing strength in the U.S. labor market, attention remained focused on upcoming inflation data for March, expected to shed additional light on the Fed’s policy direction.

Sentiment on Wall Street was dampened earlier in the week by comments from several Fed officials expressing concerns about persistent inflationary pressures. Minneapolis Fed President Neel Kashkari’s remarks on Thursday, suggesting that stubborn inflation might postpone rate cuts entirely in 2024, contributed to a sharp market retreat during the session.

The S&P 500 dropped 1.2% to 5,147.21 points, while the NASDAQ Composite declined 1.4% to 16,049.08 points, and the Dow Jones Industrial Average fell 1.4% to 38,596.98 points.

Earlier in the day, Richmond Fed President Thomas Barkin underscored the Fed’s willingness to maintain interest rates steady as it monitored inflationary developments.

In addition to concerns about monetary policy, apprehensions about a potential escalation of tensions between Israel and Iran weighed on investor sentiment. Reports of an alleged Israeli attack on an Iranian consulate in Syria fueled fears, pushing oil prices to levels not seen in over five months, potentially exacerbating inflationary pressures in the months ahead.

Boehringer Ingelheim to Downsize Salesforce Due to Weak U.S. Sales of Humira Biosimilar

Boehringer Ingelheim announced plans to lay off part of its sales team due to disappointing U.S. sales of its biosimilar version of AbbVie’s Humira, a popular arthritis treatment. The German pharmaceutical company intends to transition to a hybrid sales model by June 30, combining in-person and virtual approaches, in response to pharmacy benefit managers (PBMs) continuing to favor branded Humira for reimbursement.

This preference has hindered the adoption of biosimilar alternatives like Boehringer’s Cyltezo in the U.S. market. While specific layoff figures were not provided, Boehringer, which employs 53,000 people globally, aims to streamline its customer-facing operations.

Despite the launch of nine biosimilars in the U.S. last year, AbbVie has retained over 98% of the Humira market share. Boehringer introduced Cyltezo in July but has only recorded 1,487 prescriptions since then, compared to nearly 2.8 million Humira prescriptions during the same period.

Humira, once the world’s bestselling prescription medication with annual sales of $22 billion in 2022, has faced competition from Merck & Co’s Keytruda. Unlike traditional generic pills, biosimilars cannot be replicated exactly due to their complex biologic nature.

Boehringer priced its branded and unbranded versions of the drug at a 5% and 81% discount, respectively, to Humira’s 2023 list price of $6,922 per month. Swiss drugmaker Sandoz and Amgen also launched biosimilars at similar price points.

Boehringer’s Cyltezo stands out as the first biosimilar designated interchangeable by the U.S. FDA, meaning it can be substituted for the original Humira without consulting the prescriber. Despite this designation, prominent PBMs like UnitedHealth Group’s Optum Rx and Cigna’s Express Scripts have chosen to include Cyltezo on their reimbursement lists alongside Humira and other biosimilars.

Fridays on the stock market are like the grand finale of a thrilling rollercoaster ride, where investors strap in for the last exhilarating loop-de-loop of the week. It’s the day when financial wizards either breathe a sigh of relief or clutch their calculators in suspense, as the markets decide whether to dance to the tune of bull horns or bear growls. With traders playing a high-stakes game of musical chairs, Fridays become the stage for the ultimate showdown between market optimism and weekend escapism. So, fasten your seatbelts and hold onto your hats, because on Fridays, the only thing predictable is the unpredictability.