LONDON — European stocks are expected to open flat to lower on Thursday as investors digest the U.S. Federal reserve’s latest rate cut and commentary.
The U.K.’s FTSE index is seen opening slightly below the flatline, Germany’s DAX 0.3% lower, France’s CAC 40 flat and Italy’s FTSE MIB down 0.18%, according to data from IG.
Global markets are reacting to the Fed’s third interest rate cut of the year yesterday. The U.S central bank trimmed the Federal Funds rate by 25 basis points to 3.5%-3.75% but signaled a tougher road ahead for further reductions.
Fed Chair Jerome Powell, at his post-meeting news conference, said the reduction puts the Fed in a comfortable position as far as rates go.
“We are well-positioned to wait and see how the economy evolves,” Powell said, noting that President Donald Trump’s tariffs had fueled inflation.
Powell is nearing the end of his second term as chair and has just three meetings left before he makes way for Trump’s nominee.
Asia-Pacific markets gave up earlier gains to trade mostly lower overnight, while S&P and Nasdaq futures fell Wednesday night as Oracle’s results reignited fears about high-flying tech stocks, even after the Fed’s rate cut gave a boost to U.S. equity markets in the prior session.
There are no major earnings or data releases in Europe on Thursday. Switzerland’s central bank publishes its latest monetary policy decision but the bank is expected to leave rates unchanged.
