GLOBAL MARKETS-European stocks hit one-month high, Wall Street futures down after tech selloff

By Elizabeth Howcroft

PARIS, Dec 12 (Reuters) - European stocks rose in early trading on Friday, on track for a third weekly gain, as the Fed's recent rate cut supported sentiment, though Wall Street futures pointed to some lingering caution after the previous session's tech-stock selloff.

The Nasdaq fell on Thursday after cloud computing company Oracle ORCL.N flagged massive spending and weak forecasts, which added to fears about whether big bets on AI were paying off and sent tech stocks lower. The move had a limited impact on wider risk appetite, as the S&P 500 and Dow still hit record highs. Wall Street futures were down during Asian trading, as some tech fears lingered, and still struggled to make gains during European trading.

The U.S. Federal Reserve cut interest rates by 25 basis points on Wednesday, in a 9-3 split decision, leaving traders optimistic about more cuts in 2026, even though policymakers signalled that it will put further reductions on pause for now.

At 1038 GMT, the pan-European STOXX 600 was up 0.3% on the day, having hit its highest in a month .STOXX. The FTSE 100 was up 0.2% .FTSE, Germany's DAX was up 0.3% .GDAXI and France's CAC 40 was up 0.7% .FCHI. The MSCI World Equity Index was up 0.2% .MIWD00000PUS.

S&P 500 futures were down 0.2% EScv1, while Nasdaq futures were down 0.5% NQc1.

Ed Hutchings, head of the developed market rates desk at Aviva, said traders may avoid making big moves on Friday as they brace for next week's rate decisions from the Bank of England, European Central Bank and Bank of Japan.

"It's a bit of pause-for-thought post the Fed," he added.

The BoE is expected to cut rates next Thursday. The ECB, which also meets on Thursday, is expected to keep them steady, although traders are suddenly speculating that it could hike rates in 2026. The BoJ, which meets on Thursday, is expected to hike rates, after strong signals from Governor Kazuo Ueda.

DOLLAR DOWN, POUND FALLS SLIGHTLY ON UK DATA

The U.S. dollar was steady, with the dollar index up around 0.1% on the day at 98.462 =USD. Still, it was within reach of the previous session's low, which was the lowest in nearly eight weeks, and on track for a third weekly decline in a row, having been hurt by the Fed's less-hawkish-than-expected outlook on rates, as well as U.S. jobless claims data, which showed that the number of Americans filing new applications for unemployment benefits increased by the most in nearly 4-1/2 years last week.

The euro was down 0.1% at $1.1726 EUR=, and sterling was down 0.1% on the day at $1.3369 GBP=, falling only slightly after data showing that Britain's economy shrank by 0.1% in the three months to December, in the run-up to the UK budget.

Germany's government bond yields rose, on track for their largest weekly rise since March, as traders started to price in a rise in euro zone rates following comments from influential ECB policymaker Isabel Schnabel earlier in the week. The 10-year Germany government bond yield was at 2.856% DE10YT=RR.

OIL RISES, COPPER HITS RECORD HIGH

Oil prices rose in early trading, receiving support from concerns about disruptions to supply in Venezuela as the U.S. prepares to intercept more ships transporting Venezuelan oil, but then erased these gains, and was on track for a weekly decline as a possible Russia-Ukraine peace deal remains in focus.

Ukraine's government bonds rallied after the country sent the United States a revised proposal for ending the war with Russia.

Investors are also watching the progress of European Union proposals to use frozen Russian assets, many of which are held at Brussels-based financial institution Euroclear. Leaders of the "Coalition of the Willing" group of nations discussed progress in a virtual meeting on Thursday. Russia's central bank said on Friday that the plans were illegal.

Copper SCFcv1 hit a record high after China, a top copper-consumer, promised to maintain a "proactive" fiscal policy next year. Gold was up around 1% on the day, at $4,325.59 XAU=.