• Global stocks fell Thursday, with US futures showing a pullback from the prior day's rally ahead.
  • Focus is on the ECB, which is set to hike interest rates for the first time in over a decade at its meeting later today.
  • Investors' hopes for an earnings season boost for stocks have ebbed after reports of hiring freezes and mixed quarterly updates.

Global stocks slipped on Thursday, with the focus on Europe as the region's central bank readies its first interest-rate hike in over a decade and as investors' hopes for upbeat US corporate earnings ebbed.

Meanwhile, network data showed Nord Stream 1 flows of natural gas from Russia to Europe had resumed after a 10-day shutdown for maintenance, temporarily easing fears of an imminent energy crisis on the continent. 

In the US, stocks were poised to lose grip of the prior day's tech-led rally, after reports of a Microsoft hiring freeze and Tesla's mixed earnings results dampened optimism.

S&P 500 futures were down 0.17% shortly after 6 a.m. ET, while Dow Jones futures were 0.25% lower and Nasdaq 100 futures were broadly flat.

Google joined Microsoft in saying it would hit pause on hiring Wednesday, a sign of building cost pressures on big companies. 

"More job cuts continue to be announced, signaling cost pressures will remain the key highlight of the Q2 earnings season," strategists at Saxo Bank said. 

Tesla beat Wall Street targets with second-quarter earnings of $1.95 a share, compared with expectations for $1.81, thanks to higher prices for its cars and the sale of 75% of its bitcoin holdings. But its gross margin slipped.

That and mixed after-hours earnings reports from United Airlines and others sapped some of the hopes for corporate health that had helped ease investors' concerns about the risk of recession. 

AT&T, Philip Morris, Mattel and American Airlines are on the earnings docket on Thursday.

With no new clues on the US economy likely with the Federal Reserve in a quiet period, attention was firmly on Europe.

The resignation of Italian Prime Minister Mario Draghi on Thursday morning heightened political uncertainty in the region. CMC Markets strategist said the move will come as a "huge blow" to the European Central Bank, which is due to release a monetary policy update later in the day.

The ECB is expected to raise interest rates by 25 basis points for its first hike in 11 years. But markets are pricing in a more than one-in-three chance for a 50 basis point hike after reports that policymakers are considering a bigger move, ING analysts said.

"Unusually for a major central bank decision, there's serious doubt about what's going to happen," Deutsche Bak strategist Jim Reid said. 

The euro was trading about 0.1% higher at $1.0188 ahead of the ECB meeting, after rebounding earlier thanks to the restoration of natural gas flows through Nord Stream 1. 

In Europe, the pan-continental Stoxx 600 was broadly flat in choppy trading. Milan's FTSE MIB was 1.72% lower on fears for a snap election. In London, the FTSE 100 fell 0.46% as the race for next UK prime minister was cut to the final two candidates.

Asian stocks were also mostly downbeat, with the Shanghai Composite down 0.99% and Hong Kong's Hang Seng closing 1.51% lower. But Tokyo's Nikkei 225 was up 0.44% after the Bank of Japan left its dovish monetary policy unchanged.

Here are how other key assets performed:

  • Brent crude oil fell 4.12% to $102.52 a barrel, while WTI crude was down 4.23 % to $96.65 thanks to weakening gasoline demand.
  • The US dollar index was slightly higher, up 0.07% at 107.15.
  • Bitcoin was 1.3% lower at $23,000 after Tesla sold the majority of its holdings.
  • Benchmark Dutch natural gas futures fell 5% in early trading to around 148 euros per megawatt hour ($151) after the Nord Stream news.
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