Enthusiasm over AI helped propel tech stocks higher and Wall Street to fresh records on Thursday while European stocks advanced as central banks made interest rate calls.
A day after a public holiday, Wall Street's S&P 500 and Nasdaq Composite pushed higher at the open Thursday from record closes on Tuesday, setting new all-time highs.
"US markets reopened after a day’s holiday and AI chip giant Nvidia continued its ascent," said Dan Coatsworth, investment analyst at AJ Bell.
Market enthusiasm for artificial intelligence has driven a surge in tech stocks, in particular for Nvidia which produces high-end processors prized for AI applications.
Nvidia's market capitalisation edged past Microsoft on Tuesday to become the world's most valuable publicly traded company and its shares struck a fresh record on Thursday.
But the gains on the Nasdaq and S&P 500 faded as the morning wore on, with analysts not convinced the rally has legs to finish the day higher.
"This morning's economic data was aligned with an economic slowing that could raise questions about the achievability of earnings growth expectations and the Fed's decision to keep its policy rate higher for longer," said market analyst Patrick O'Hare at Briefing.com.
Initial jobless claims for last week came in slightly higher than expected while housing starts fell.
Data showing slowing growth gives the Federal Reserve some freedom to ease monetary policy, but so far US central bank officials have indicated they wanted to see more evidence of inflation coming down before committing to an interest cut.
Analysts say this means there will be two reductions at most, with many predicting just one this year -- in line with the Fed's "dot plot" gauge released last week.
- Central banks -
Interest rate calls by central banks in Europe animate trading across the Atlantic, helping stocks rise across the region.
Switzerland's franc dipped against the dollar after the Swiss National Bank (SNB) announced its second straight interest-rate cut, having become in March the first Western central bank to slash borrowing costs that had been raised to battle inflation.
The Bank of England (BoE) held rates steady as expected ahead of UK's July 4 general election, as did Norway's central bank.
The BoE's decision to keep its key rate at a 16-year high came just a day after official data showed UK headline consumer inflation had finally come down to the bank's two percent target.
But the statement following the meeting opened the door to a rate cut in August, however, according to Kathleen Brooks, research director at trading firm XTB, pleasing the stock market but hitting the pound.
"The market has taken today's news as a step in the direction of a rate cut at the next BoE meeting. The market is now pricing in a 60 percent chance of a rate cut in August, up from a 35 percent chance before the meeting," she said.
The European Central Bank cut its rate earlier this month, while the US Federal Reserve is expected to introduce only one rate reduction this year.
- Key figures around 1530 GMT -
New York - Dow: UP 0.2 percent at 38,892.00 points
New York - S&P 500: UP less than 0.1 percent at 5,491.87
New York - Nasdaq Composite: FLAT at 17,867.73
London - FTSE 100: UP 0.8 percent at 8,272.46 (close)
Paris - CAC 40: UP 1.3 percent at 7,671.34 (close)
Frankfurt - DAX: UP 1.0 percent at 18,254.18 (close)
EURO STOXX 50: UP 1.3 percent at 4,947.73 (close)
Tokyo - Nikkei 225: UP 0.2 percent at 38,633.02 (close)
Hong Kong - Hang Seng Index: DOWN 0.5 percent at 18,335.32 (close)
Shanghai - Composite: DOWN 0.4 percent at 3,005.44 (close)
Euro/dollar: DOWN at $1.0717 from $1.0745 on Wednesday
Euro/pound: UP at 84.56 pence from 84.44 pence
Dollar/yen: UP at 158.68 yen from 157.90 yen
Pound/dollar: DOWN at $1.2674 from $1.2726
West Texas Intermediate: UP 0.5 percent at $82.00 per barrel
Brent North Sea Crude: UP 0.3 percent at $85.35 per barrel