BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European stocks are seen opening flat to slightly higher on Thursday as investors react to the U.S. Federal Reserve's widely expected decision to hold rates unchanged and await the outcome of an ECB policy meeting later in the day amid France's deepening fiscal woes and political gridlock.
Investors widely expect a rate hold from the European Central Bank but still look for clues on the trajectory going forward amid questions about bond-market turmoil in France.
U.S. stock futures were mixed, with Nasdaq 100 futures sliding more than 1 percent as disappointing earnings from Samsung and Alphabet revived doubts over whether the billions of dollars companies are pouring into artificial intelligence (AI) will deliver sufficient returns to shareholders.
Shares of Samsung Electronics fell nearly 5 percent in South Korea due to investor disappointment over a lack of detail about returns to shareholders.
Google parent Alphabet shares slumped more than 10 percent in after-hours trading as the company came up short of Wall Steet expectations despite posting strong revenue growth in its third quarter. The company's search and advertising sales missed estimates.
On the contrary, Microsoft shares jumped over 5 percent. The technology giant delivered better-than-expected earnings and revenue in its fiscal 2027 first quarter and kept its capital expenditures in check, offering some respite to investors worried over rising AI spending.
Asian markets were mixed in cautious trade, while the U.S. dollar struggled for direction ahead of the release of PCE inflation data, which could sway the Fed's future decisions.
Gold was subdued below $4,050 an ounce after the Fed offered little clarity on its next move.
Brent crude prices fell more than 1 percent below $114 barrel, moving away from four-year highs following fresh diplomatic efforts to end the war in the Middle East.
Iran's Foreign Minister Abbas Araghchi said Teheran continued to give diplomacy a chance. According to the Wall Street Journal, U.S. President JD Vance had reached out to Iranian national security official Mohsen Rezaei.
U.S. President Donald Trump confirmed that negotiations were underway through mediators but stressed he didn't know whether they would bear fruit.
Elsewhere, Yemen's Houthis launched an attack on the Aden airport on Wednesday after issuing evacuation warnings due to escalating violence.
Global commodity prices are set to surge 23 percent in 2026 as a result of global conflicts and EI Nino, the World Bank said in a report.
Overnight, U.S. stocks rose for a third straight session as investors cheered strong earnings from AI-related companies and the Federal Reserve's decision to hold rates at 3.75-4 percent in a 10-2 split vote before midterm elections.
The yield on the 10-year Treasury remained elevated above 5 percent and Brent crude oil surged to a six-month high after reports of Houthi attacks on Saudi Arabi's biggest oil refinery and a decline in U.S. crude inventories, limiting potential gains.
The Fed upgraded its assessment of economic activity to 'strong' from 'solid,' while acknowledging inflation remains elevated.
Chair Kevin Warsh gave no clear signal of a December hike, reiterating opposition to issuing forward guidance.
According to the CME FedWatch Tool, markets currently expect a 78 percent probability of a December rate hike, down from about 84 percent before the meeting.
While the Dow edged up 0.2 percent, the S&P 500 and the tech-heavy Nasdaq Composite both added around 0.3 percent.
European stocks ended on a muted note on Wednesday, with a sharp rise in oil prices and caution ahead of key central bank decisions keeping investors nervous.
The pan-European STOXX 600 ended flat with a positive bias. While France's CAC 40 finished marginally lower, the U.K.'s FTSE 100 inched up 0.1 percent and the German DAX rose 0.4 percent.
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