European Markets Struggle to Gain Momentum as Fed Rate Cut Fails to Lift Global Sentiment
European markets are poised for a muted open on Thursday as investors sift through the U.S. Federal Reserve’s latest interest rate cut and cautious forward guidance. The move, which was widely anticipated, appears to have done little to brighten overall market sentiment. Early forecasts point to a weaker start for major European indexes, with London’s FTSE expected to hover just below the flatline and Germany’s DAX eyeing a 0.3% decline.
France’s CAC 40 is set to open flat, while Italy’s FTSE MIB is projected to slip about 0.18%, according to early data from IG. The subdued outlook follows the Fed’s decision to cut rates for a third time this year, trimming the Federal Funds rate by 25 basis points to a range of 3.5% to 3.75%. While the cut had been priced in by traders, the central bank’s tone signaled a potentially slower path ahead for future reductions.
Fed Chair Jerome Powell underscored that the central bank now feels “well-positioned to wait and see” how economic conditions evolve, noting that President Donald Trump’s tariffs have continued to add pressure to inflation. Powell, nearing the end of his second term, has just three policy meetings left before stepping aside for Trump’s nominee — a shift that could influence how aggressively the Fed approaches its next moves.
Across the Asia-Pacific region, markets gave up earlier gains and closed mostly lower overnight. U.S. futures also retreated, with both S&P and Nasdaq futures sliding Wednesday night. The pullback came after weak quarterly results from Oracle reignited concerns about stretched tech valuations, even as the Fed’s cut had briefly lifted U.S. stocks in the earlier session.
Investors in Europe are facing a relatively quiet day on the data front, with no major economic releases expected. The main regional event will come from Switzerland’s central bank, which is set to publish its latest monetary policy decision. Economists broadly expect Swiss policymakers to keep rates unchanged as they monitor global developments and domestic inflation trends.
source: cnbc