Fed Cut Sparks 3 Key Market Reactions as Europe Opens Flat
European stocks open mixed after the Fed’s latest rate cut, triggering global market reactions as investors brace for uncertainty and limited future reductions.
LONDON — European stocks are expected to open flat to lower on Thursday as investors process the U.S. Federal Reserve's latest rate cut and commentary.
According to IG data, the U.K.'s FTSE index is opening slightly below the flat line, Germany's DAX down 0.3%, France's CAC 40 flat, and Italy's FTSE MIB down 0.18%.
Global markets are reacting to the Fed's third interest rate cut of the year yesterday. The U.S. central bank reduced the federal funds rate by 25 basis points to 3.5%-3.75%, but outlined a difficult path to further reductions.
Fed Chair Jerome Powell said in his post-meeting press conference that the cut has put the Fed in a comfortable position on rates.
Powell said, "We're well-positioned to wait and see how the economy progresses," adding that President Donald Trump's tariffs have fueled inflation.
Powell is nearing the end of his second term as chairman and has just three meetings left before he must make way for Trump's nominee.
Asia-Pacific markets lost early gains and traded mostly lower overnight, while S&P and Nasdaq futures fell Wednesday night as Oracle's results rekindled fears about high-flying tech stocks, even though the Fed's rate cut boosted U.S. equity markets in the previous session.
There will be no major earnings or data releases in Europe on Thursday. Switzerland's central bank will publish its latest monetary policy decision, but it is expected that the bank will keep rates unchanged.
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