European Stocks Poised for Mixed Start Ahead of U.S. PCE, Q1 GDP and Jobless Claims Data

European stocks are expected to open mixed on Thursday as investors balance strong guidance from Micron and Qualcomm against the prospect of potential Federal Reserve interest-rate hikes this year.

Micron Technology reported record quarterly earnings and issued better-than-expected guidance, alleviating investor concerns about stretched AI-driven valuations in the technology and chipmaking sectors.

Qualcomm has shared a series of updates regarding its artificial intelligence roadmap following strong earnings results.

Meanwhile, inflation concerns persist despite oil prices extending their slide to levels observed prior to the Middle East conflict.

In a CNBC interview on Wednesday, U.S. Treasury Secretary Scott Bessent praised Federal Reserve Chair Kevin Warsh’s plan to reduce forward rate guidance, but emphasized that the Fed should remain open-minded regarding the inflationary impact of high energy prices stemming from the Iran conflict.

Investors are awaiting the U.S. PCE price index data for May, a final reading on Q1 GDP, and weekly jobless claims figures later today for further insight into the outlook for interest rates and economic growth.

The PCE inflation report is expected to show a 0.3 percent increase in core prices for May, bringing the annual rate to 3.4 percent.

The headline inflation rate is projected to rise 0.5 percent on a monthly basis and 4.1 percent year-over-year.

The CME FedWatch tool indicates that markets are now pricing in at least one interest rate increase this year.

Asian markets showed mixed results, with technology stocks rallying in South Korea and Japan as strong earnings and bullish forecasts from Micron and Qualcomm helped alleviate concerns about AI demand, elevated valuations, and the sustainability of the artificial intelligence trade that has driven global stocks to record highs.

The dollar index was on track for its sharpest monthly gain in nearly a year, while gold remained little changed below $4,000 an ounce.

Oil prices extended their decline, with Brent crude futures falling nearly 2 percent below $73 a barrel, marking a fourth consecutive session of losses as tanker traffic through the Strait of Hormuz increased.

Overnight, U.S. stocks relinquished early gains to close mixed as investors rotated out of high-flying technology and artificial intelligence stocks into other beaten-down sectors.

Traders also digested disappointing data showing that U.S. new home sales unexpectedly fell in May for the second consecutive month.

While the Dow Jones Industrial Average rose 0.4 percent, the tech-heavy Nasdaq Composite declined 0.4 percent and the S&P 500 slipped 0.1 percent amid lingering inflation and rate hike concerns.

European stocks ended mixed on Wednesday following a cautious session amid reports of disagreements between Washington and Tehran over certain key terms of their peace agreement.

The pan-European STOXX 600 edged up 0.1 percent, while the German DAX fell 0.6 percent, dragged down by declining defense stocks.

The U.K.’s FTSE 100 gained 0.3 percent, and France’s CAC 40 increased by 0.5 percent.

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