Investing.com – Wall Street is expected to rebound on Thursday after the Fed-led rout in the previous session, as the Bank of England will be the next central bank in line to deliver policy decisions. Apple is tied to Chinese partners regarding its AI options, while Micron is disappointing with its guidance.
1. The Bank of England is the next central bank in line
The central bank's offer continues on Thursday, the day after it cuts interest rates, but it expects the pace of monetary easing to slow in 2025.
Next will come, later in the session, and unlike the Fed, it is expected to keep interest rates unchanged and adopt a very gradual stance on easing the country's monetary conditions.
The UK rate rose to 2.6% in November from 2.3% the previous month, according to data released earlier this week, moving further away from the Bank of England's 2.0% medium-term target.
In addition, British wages rose more than expected in the three months to October, raising concerns about underlying inflation pressures.
Fifty basis points of cuts from the Bank of England are priced in until 2025, with the first cut of 25 basis points fully for May. That may change if policymakers appear particularly hawkish after the announcement.
Thursday also witnesses central bank meetings in and.
Norway's central bank is expected to keep interest rates unchanged, while Sweden's central bank is likely to cut its key interest rate by a quarter of a percentage point.
It kept interest rates unchanged earlier Thursday, with the benchmark short-term interest rate remaining at 0.25%, as policymakers remained cautious about Japan's economic outlook and inflation path.
The Bank of Japan said it expects CPI inflation to rise in 2025, amid a virtuous cycle of rising wages and increasing private consumption.
The bank meets on Friday and is also widely expected to leave key lending rates unchanged.
2. Futures bounce after technology-led rout; GDP data is due
US stock futures rose on Thursday, rebounding after the previous session's sharp sell-off in the wake of the Federal Reserve's revised forecast for interest rates next year.
By 04:40 EST (08:40 GMT), the contract was up 155 points, or 0.4%, up 20 points, or 0.4%, and up 85 points, or 0.4%.
Wall Street's main indexes fell on Wednesday after the US central bank cut interest rates, but also indicated it was likely to cut interest rates only twice next year, down from the four cuts seen in September's forecast.
The blue-chip stock fell more than 1,000 points, or 2.6%, its 10th straight loss, while it fell nearly 3% and fell 3.6%, its worst day since late July.
Wedbush analysts said this pullback in technology stocks presents a buying opportunity, with artificial intelligence expected to post further gains next year.
The sell-off represents a “buying opportunity to own technology winners poised to play in a powerful AI revolution through 2025,” Wedbusg said in a note issued late Wednesday.
The list of economic data centers around the third-quarter release, which is expected to show that annual growth fell to 2.8% in the quarter, down from 3.0% in the previous quarter.
3. Apple is looking to partner with Chinese partners in the field of artificial intelligence
Apple (NASDAQ:) is in talks with its local partners, Tencent and ByteDance, about integrating their AI models into iPhones sold in China, Reuters reported, a key market for the tech giant.
Apple began rolling out OpenAI's ChatGPT on its devices this month, but regulatory requirements in China stipulate that generative AI services must receive government approval before public release, forcing Apple to seek local partners for its AI features.
Reuters said that Apple's discussions with ByteDance, owner of Tencent and TikTok, regarding the use of its artificial intelligence models are still at a very early stage, but it seems likely that they will be part of the American company's plans to increase revenues when its market share in the second-largest economy is declining.
4. Micron's guidance is disappointing
Micron (NASDAQ:) stock fell pre-market after the chipmaker issued weak guidance for the second quarter after the close on Wednesday, disappointing investors despite a recent earnings beat.
The company reported first-quarter earnings ahead of expectations, but also significantly lowered its forecast for the first quarter of next year amid slowing demand for the chips it makes, which are used for personal computers and smartphones.
Micron shares are up more than 20% so far this year, but were down more than 16% on Thursday, with its guidance suggesting that although enthusiasm for AI remains strong, semiconductor sales outside of that space are facing… Difficulties.
5. Oil prices decline amid Fed hawkishness
Crude oil prices fell on Thursday, weighed down by demand concerns after the Federal Reserve became more hawkish, which could stifle growth in the world's largest consumer.
By 03:40 EST, US crude futures (WTI) were down 1.4% at $69.62 per barrel, while the contract was down 0.5% at $73.00 per barrel.
Traders fear global economic growth will slow with relatively higher rates, limiting demand, in the wake of the Federal Reserve meeting.
The US dollar also rose, rising to its highest level in more than two years, putting pressure on the oil complex by making the commodity more expensive for international buyers.
In addition, official data released on Wednesday showed US crude inventories falling by 934,000 barrels in the week ending December 13, compared to expectations for a decline of 1.6 million barrels.
