European Shares Seen Mostly Higher In Cautious Trade

(RTTNews) - European stocks may open broadly higher on Wednesday after fresh records for the Dow and the S&P 500 overnight.

U.K. stocks may drift lower at open after closing at a record high on Tuesday, led by gains in retailer Next and drug stocks, GSK and AstraZeneca.

U.S. equity futures were mixed this morning as investors tracked the latest updates from tech companies at the CES trade show in Las Vegas and awaited key U.S. economic readings for direction.

Countering fears about an AI spending bubble, Nvidia Chief Financial Officer, Colette Kress said that the future data center chips are in such high demand that the $500 billion revenue projection through the end of 2026 has already been exceeded.

In economic releases, trading later in the day may be impacted by reaction to reports on U.S. private sector employment, job openings and service sector activity.

Friday's closely watched monthly jobs report could impact the outlook for interest rates ahead of the Federal Reserve's next monetary policy meeting later this month.

While the Fed is likely to leave rates unchanged at its January 27-28 meeting, the central bank is widely expected to cut rates by at least another quarter point in the coming months.

Closer home, inflation data from the euro area along with unemployment and retail sales figures from Germany will be in the spotlight later today.

Official data released on Tuesday showed inflation in Germany and France slowed in December, supporting the European Central Bank's view on interest rates.

Asian stocks were mixed after four days of gains. A cautious undertone prevailed after China banned exports of dual-use goods that can serve both civilian and military purposes to Japan, citing national security concerns amid escalating tensions over Taiwan.

Gold slipped from a one-week high as the dollar held overnight gains ahead of key U.S. jobs data due this week.

Stephen Miran, a former economic advisor to U.S. President Donald Trump and a Federal Reserve governor, said on Tuesday that aggressive rate cuts exceeding 1 percentage point are necessary within this year.

Oil prices were down more than 1 percent, extending losses from the previous session after Trump said Venezuela would turn over as many as 50 million barrels of sanctioned oil and it will be taken by storage ships and brought directly to unloading docks in the United States.

Overnight, U.S. stocks notched fresh records as investors continued to shrug off worries about the U.S. attack on Venezuela over the weekend and looked ahead to the release of key economic data this week that could influence the Federal Reserve's rate trajectory.

Data showed the U.S. service sector expanded at the weakest pace of growth since April, bolstering rate cut hopes.

The Dow rallied 1 percent and the S&P 500 gained 0.6 percent to reach new record closing highs while the tech-heavy Nasdaq Composite advanced 0.7 percent.

European stocks closed higher on Tuesday as investors digested regional PMI and inflation readings, and closely followed the latest developments in Venezuela.

The pan European Stoxx 600 added 0.6 percent. The German DAX finished marginally higher and France's CAC 40 rose 0.3 percent while the U.K.'s FTSE 100 climbed 1.2 percent to reach a new closing high.