Investing.com — Wall Street is seen trading slightly lower Thursday, with disappointing sales guidance from software giant Adobe weighing on sentiment. Bitcoin has climbed above $100,000 again, while the European Central Bank is expected to ease monetary policy again after the Swiss National Bank cut by a hefty 50 basis points.
1. ECB to cut, but by how much?
Central banks are very much in the focus as the year comes to the end, with the European Central Bank’s latest policy meeting set to conclude later in the session, ahead of the Federal Reserve next week and after the Swiss National Bank cut by a hefty 50 basis points.
The ECB is widely expected to reduce interest rates later Thursday, and the real question within the market is by how much?
The central bank has already cut rates at three of its last four meetings, and is widely expected to commit to another 25 basis points of easing this time around.
That said, there has been significant debate over whether it is easing policy fast enough to support an economy that is at risk of recession, and facing political instability at home and the prospect of a fresh trade war with the United States – particularly with inflation nearly back to target.
Whichever way the ECB goes today, further easing is undoubtedly coming: Markets are priced for reductions at every meeting until June, followed by at least one additional cut in the final half of 2025.
The Swiss central bank started the rate-cutting ball rolling earlier Thursday, reducing its key interest rate by 50 basis points as it attempted to tackle a strong Swiss franc as well as depressed inflation.
Switzerland became the first major economy to loosen its reins on monetary policy in March, implementing four reductions this year in the battle to tame the national currency’s appreciation and declines in consumer prices.
SNB Chairman Martin Schlegel recently invoked the possibility of a return to negative rates if needed to dampen investor appetite for the safe-haven franc.
2. Futures slightly lower; Adobe slumps
US stock futures slipped slightly Thursday, handing back some of the previous session’s gains after the tech-heavy Nasdaq closed above the 20,000 level for the first time ever.
By 04:05 ET (09:05 GMT), the Dow futures contract was done 90 points, or 0.2%, S&P 500 futures dropped 10 points, or 0.2%, and Nasdaq 100 futures fell 45 points, or 0.2%.
The Nasdaq Composite surged almost 1.8% Wednesday, topping the 20,000 threshold and posting an all-time high, after the November consumer price index report came in line with expectations, leading investors to anticipate another rate cut from the Federal Reserve at its policy meeting next week.
The broad market S&P 500 added 0.8%, while the blue chip Dow Jones Industrial Average underperformed, falling 0.2%.
In the United States, the latest inflation data revealed a 0.3% increase in consumer prices month-on-month, with an annual growth rate of 2.7%.
Both figures aligned with economists’ forecasts, offering some relief to markets after recent volatility.
The main economic release is the November producer prices report, which is expected to show that monthly prices remained unchanged at 0.2%, confirming expectations for a Federal Reserve rate cut next week.
On the corporate earnings front, Adobe (NASDAQ:ADBE) will be in the spotlight after the software giant disappointed with its sales guidance, while the likes of chip giant Broadcom (NASDAQ:AVGO), home furnishings company RH (NYSE:RH) and retailer CostCo are due to report after the close.
3. Adobe’s sales outlook disappoints
Adobe stock slumped in premarket trading after the software giant issued a disappointing annual sales outlook, indicating that the company’s recent measures to incorporate artificial intelligence into its offerings were taking longer than expected to generate returns.
The company forecast annual revenue for 2025 between $23.30 billion and $23.55 billion, compared with estimates of $23.78 billion, according to data compiled by LSEG.
Adobe, known for its software for creative professionals, has ramped up its investments in AI amid increased competition from smaller players such as Stability AI and Midjourney, whose image generating software is expected to eat into Adobe’s market share.
But the company is still struggling to monetize its AI features, with revenue failing to pick up substantially despite the introduction of Adobe’s own image and video generation features.
Adobe stock is down almost 8% so far this year, and is indicated a further 9% lower in premarket trading.
4. Bitcoin back above $100,000 despite Microsoft (NASDAQ:MSFT) blow
Bitcoin surged higher Thursday, extending an overnight rebound as risk appetite was boosted by in line U.S. consumer inflation data, which kept investors largely betting on a December interest rate cut.
The world’s largest cryptocurrency had now recouped all of its losses made over the past week, while also appearing to have broken out of a $90,000 to $100,000 trading range seen in recent weeks.
At 04:05 ET (09:05 GMT), Bitcoin rose 2.9% to $101,000.0.
The prospect of friendlier US crypto regulations under a Donald Trump presidency have kept most major cryptos sitting on strong gains through the past week.
However, bitcoin bulls received a blow after Microsoft shareholders voted against a proposal for the company to consider adding the digital currency to its balance sheet this week.
The proposal was put forward by a think tank – the National Center for Public Policy Research – and called on the tech giant to consider investing in Bitcoin, arguing that it was a dependable inflation hedge.
But shareholders rejected the proposal, with Microsoft’s board also having recommended against its approval. The company has signaled in the past that while it does consider crypto as an investment, it prefers less volatile assets.
5. Oil steadies amid myriad of different factors
Crude prices were little changed Thursday, as traders digested a number of factors, including the potential for more US oil sanctions, fresh stimulus measures in China and a dour outlook on oil demand from OPEC.
By 04:05 ET, the US crude futures (WTI) gained 0.3% to $70.50 a barrel, while the Brent contract rose 0.3% to $73.77 a barrel.
Prices steadied after rising sharply in the prior session on expectations of tighter global supplies, after the US was seen preparing more oil sanctions against Russia. Prices were also sitting on gains made after top importer China signaled more incoming economic support earlier this week.
US Treasury Secretary Janet Yellen stated on Wednesday that a weaker global oil market could present a chance for additional action against Russia’s energy sector.
On the flip side, the Organization of the Petroleum Exporting Countries, known as OPEC, cut its forecasts for oil demand growth in 2024 and 2025, on Wednesday, its fifth consecutive downward revision.
Government inventory data released on Wednesday showed that US oil inventories unexpectedly grew more than expected in the week to Dec. 6.