BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks may drift lower at open on Thursday as investors weigh escalating Middle East tensions and ponder the Federal Reserve's monetary policy road map.
Regional losses, if any, may remain limited as U.S. stock futures rebounded and Asian markets stabilized after a recent chip-led sell-off.
Helping sentiment, Microsoft posted strong quarterly earnings, driven by massive Azure growth and expanding AI user adoption.
Samsung Electronics forecast strong AI chip demand and claimed that the memory chip shortage will deepen through 2028 after its semiconductor arm reported a more than 250-fold jump in Q2 profit.
Meta Platforms, however, issued a weaker-than-expected revenue forecast and narrowed its 2026 annual capex forecast.
Asian markets were broadly lower, reversing early gains as investors reacted to escalating Middle East tensions and fretted about the future path of U.S. monetary policy.
Brent crude futures fell nearly 1 percent below $90 a barrel in Asian trade after climbing 7.9 percent in the U.S. trading session. WTI crude futures were down 0.7 percent at $83.90 after rallying 6.6 percent overnight.
The United States carried out fresh strikes on Iran on Wednesday, further intensifying a five-month-old war that is spreading beyond its main fronts to embroil more countries across the region.
The latest escalation came after a drone struck a U.S.-owned gas storage tanker at Egypt's Mediterranean port of Damietta and Iran fired missiles targeting U.S troops in Jordan.
The dollar was on the defensive while gold edged up slightly to $4,077 an ounce as yields on longer-dated U.S. Treasuries hit 19-year highs.
U.S. stocks tumbled overnight as long-term Treasury yields surged on concerns that the Fed may be falling behind in its fight against inflation.
The bond market sold off, with the 30-year Treasury yield reaching its highest level since 2007, as the Fed held its federal funds target range steady at 3.5-3.75 percent despite three officials voting for an increase in rates. The rare 9-3 split vote highlighted internal divisions over the path forward for policy.
Fed Chair Kevin Warsh pledged an unwavering commitment to bring inflation down but said little about the mix of risks and nothing about the outlook for the policy rate.
Inflation worries were compounded by a sharp increase in crude oil prices after President Trump vowed to hit Iran 'hard' in response to attacks on American forces in the Middle East.
U.S. and Saudi fighter aircraft struck multiple terrorist logistics and weapons sites across eastern Iraq in a strong response to over 30 IRGC-directed aerial drone attacks in the last 72 hours, Centcom said.
The Dow slumped 2.2 percent in its worst session since April 2025 while the S&P 500 shed 1.5 percent to reach its lowest level in more than a month.
The tech-heavy Nasdaq Composite gave up 1.7 percent to hit a three-month closing low as semiconductor shares extended recent losses on valuation concerns, doubts about returns from massive artificial intelligence investments and signs of increasing competition from China.
European stocks closed mostly lower on Wednesday as fresh U.S.-Iran tensions drove oil prices sharply higher.
The pan-European STOXX 600 slipped 0.3 percent. While the U.K.'s FTSE 100 rose 0.3 percent, the German DAX finished marginally lower and France's CAC 40 dipped 0.6 percent.
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