First, you've omitted an important piece of the puzzle: you are not going to get the New Event to stretch unless you pin its left side, which you have neglected to do.
Second, the labels are both already trying (at a low level of priority) to size themselves to fit their text. It is impossible for them to do that and for them to be pinned at both ends and to one another.
The solution is to nudge the horizontal hugging priority of one of them, to be greater than the other. In your case, the New label needs a higher horizontal hugging priority; one point added will do. Keep the New Event label at its default horizontal hugging priority (probably 250) and set the New label to one point higher (probably 251).