European stocks are projected to open broadly higher on Thursday, buoyed by the U.S. Federal Reserve hinting at a potential rate cut in September. Additionally, Meta, the parent company of Facebook, reported favorable results for the June quarter and provided a positive outlook for Q3, driven by strong digital ad spending on both Facebook and Instagram.
Later today, notable earnings reports from Apple and Amazon.com are expected.
On the economic data front, investors are likely to focus on U.S. reports covering weekly jobless claims, labor productivity and costs, manufacturing activity, and construction spending. These precede the critical non-farm payrolls data for July, which will be released on Friday.
In the U.K., there is speculation on whether the Bank of England will announce its first rate cut since the pandemic, following recent unexpected rises in services inflation.
Data on U.K. Nationwide house prices, Eurozone unemployment figures, and the final factory PMI data from the euro area may also influence trading sentiment as the session continues.
Asian stocks showed mixed performance; Chinese and Hong Kong markets fluctuated as a private survey revealed China's manufacturing sector unexpectedly contracted in July, underlining the need for more robust stimulus measures. Japan’s Nikkei index fell nearly 3 percent as the yen surged to a four-and-a-half month high, impacting the outlook for the country's exporters.
The dollar experienced losses, while gold prices slipped slightly after reaching a two-week high. Oil prices extended gains, having surged around 4 percent in the prior session due to supply disruption fears linked to the killing of a Hamas leader in Iran.
U.S. stocks rallied overnight, with investors encouraged by Fed Chair Jerome Powell’s dovish remarks and strong earnings from AMD, Starbucks, and DuPont.
After keeping the key interest rate steady at a 23-year high, Powell indicated that recent progress on inflation and a cooling labor market might make a rate cut in September a possibility.
The Nasdaq Composite surged 2.6 percent, driven by a resurgence in tech stocks led by Meta and Nvidia. The S&P 500 gained 1.6 percent, marking its best daily performance since February, while the Dow increased by 0.2 percent.
European stocks extended their gains for the second consecutive session on Wednesday. Strong corporate earnings helped mitigate concerns over an unexpected rise in Eurozone inflation in July.
The pan-European STOXX 600 rose by 0.8 percent. The German DAX increased by 0.5 percent, France’s CAC 40 added 0.8 percent, and the U.K.’s FTSE 100 climbed by 1.1 percent.
