European stocks may open a tad higher on Thursday as investors react to the Fed policy decision overnight and await further direction from the ECB rate announcement later in the day.
Overnight, the Fed showed reluctance to alter its hawkish stance until there is progress in reducing price pressures.
The European Central Bank looks all but certain to hike the deposit rate by 25 bps but there is considerable uncertainty about the central bank’s guidance for September’s monetary policy.
Elsewhere, the Bank of Japan’s policy decision is due on Friday, with traders looking for any hints of a shift in its yield-curve control policy.
Trading later in the day may be impacted by reaction to U.S. reports on second quarter GDP, durable goods orders, initial jobless claims and pending home sales.
On the earnings front, shares of Facebook parent Meta Platforms soared more than seven percent in after-market trades after the company predicted an upbeat third-quarter revenue fueled by digital advertising growth and an improving economic environment.
Comcast, McDonald’s and Honeywell are among the prominent U.S. companies that will unveil their quarterly earnings results before the U.S. opening bell later today.
Asian stocks traded mostly higher as a positive outlook from Samsung Electronics boosted technology stocks in the region.
There was also some cheer on the data front, with China’s industrial profits showing a slight recovery through June.
Gold benefited from a weaker dollar and falling Treasury yields, while oil prices rose about 1 percent after ending notably lower overnight on data showing a much smaller than expected drop in U.S. crude inventories in the week ended July 21st.
Overnight, U.S. stocks saw wild swings before ending narrowly mixed after the Federal Reserve announced a 25-bps rate hike and left the door open for future hikes.
In his post-meeting press conference, Fed Chair Jerome Powell noted that a rate cut is unlikely this year and the central bank will make decisions meeting by meeting after watching incoming economic data.
The Dow edged up 0.2 percent to extend its winning streak to 13 sessions, while the S&P 500 and tech-heavy Nasdaq Composite finished marginally lower.
European stocks closed firmly in the red on Wednesday as investors reacted to a mixed batch of corporate earnings and awaited the Fed move on rates.
The pan European STOXX 600 gave up half a percent. The German DAX dropped half a percent, France’s CAC 40 lost 1.4 percent and the U.K.’s FTSE 100 slipped 0.2 percent.
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