European stocks may open on a sluggish note Thursday after the U.S. Federal Reserve gave mixed signals on interest-rate plans.
After delivering another quarter-point rate hike, the Fed signaled a potential pause in its tightening cycle depending on incoming data on inflation and other factors.
Also, Fed Chair Jerome Powell said the U.S. central bank is unlikely to be able to shield the U.S. economy from the fallout of a failure to raise the federal debt ceiling.
Meanwhile, PacWest Bancorp shares slumped 60 percent in after-hours U.S. trading and shares of other regional lenders also fell after PacWest Bancorp said that it is exploring strategic options, including a potential sale or capital raise.
The focus now shifts to a European Central Bank meeting later in the day, with analysts expecting a 25-bps rate hike.
Across the Atlantic, weekly jobless claims data due later in the day and Friday’s jobs data will be key.
In terms of earnings, Moderna will unveil its earnings results before the U.S. opening bell, while Apple along with Lyft, DraftKings and Coinbase will report their earnings after the market close.
Asian markets recovered from an early slide to trade mostly higher despite weak China data. A private survey showed China’s manufacturing activity slid back into contraction in April.
The dollar held losses, helping gold prices trade near record high levels. Oil prices recovered some lost ground, after having fallen around 4 percent overnight to extend steep losses from the previous session.
Overnight, U.S. stocks slipped into the red overnight to extend losses from the previous session.
The Dow shed 0.8 percent, the tech-heavy Nasdaq Composite gave up half a percent and the S&P 500 declined 0.7 percent amid continuing debt-ceiling worries.
European stocks rose on Wednesday after logging their biggest fall in a month the previous day.
The pan European STOXX 600 gained 0.3 percent. The German DAX rose 0.6 percent, France’s CAC 40 added 0.3 percent and the U.K.’s FTSE 100 inched up 0.2 percent.
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