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US stock futures surge on Meta, Microsoft ( MSFT ) earnings

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Dollar hovers near two month highs after Fed holds rates

(Updates prices throughout, adds new detail on BOJ)

By Nell Mackenzie and Gregor Stuart Hunter

LONDON/SINGAPORE, July 31 (Reuters) - World stocks were

mixed Thursday, with markets mulling a raft of economic

indicators including central bank rate decisions, inflation data

and last-minute trade deal negotiations ahead of U.S. President

Donald Trump's August 1 deadline.

The most recent development came from the Bank of Japan,

which held interest rates and increased its inflation forecast,

casting cautious optimism on Japan's economic prospects.

Japan's shorter-dated bond yields at one point rose to their

highest since early April, but walked that back after the BOJ's

policy statement led market participants to push out

expectations for any future interest rate hike.

The yen also gave back early gains and was last

steady on the day at 149.73 per U.S. dollar, while the Nikkei

index closed up just over 1%.

Earnings were also top of mind for investors, and Nasdaq

futures gained 1.4% after better than expected results

from Microsoft ( MSFT ) and Meta Platforms ( META ). S&P 500

futures advanced over 1%.

"Meta and Microsoft ( MSFT ) have just delivered the kind of earnings

most companies can only dream of," said Dan Coatsworth,

investment analyst at AJ Bell.

"They've smashed market forecasts by a country mile and

caused investors to scream with joy."

Earnings also underpinned stock indexes in Europe. The

pan-European Stoxx 600 index was steady around 1025

GMT.

The index is on track to end the month 1.6% higher as easing

trade worries, better than expected U.S. and European economic

data and largely upbeat earnings reports bolstered sentiment.

The region's banks rose over 1.5% on Thursday after

positive results from Standard Chartered and France's

Societe Generale.

But MSCI's broadest index of world shares

was flat, weighed down by falls in Chinese stocks after official

PMI gauges showed weaker than expected economic activity during

July. China's blue chip CSI 300 ended 1.8% lower, its biggest

single day drop since April 7, and Hong Kong's index

closed 1.6% lower.

Investors in Asia also mulled the implications of a trade

deal between the U.S. and South Korea as well as whether Trump's

initial announcement of a 25% tariff for India should be taken

seriously, especially as it was announced in the middle of trade

negotiations.

Shares in India recovered earlier losses, with the benchmark

Nifty 50 just in positive territory.

The Korean won gained 0.3% after Trump said the

U.S. would charge a 15% tariff on imports from South Korea,

which would in return invest $350 billion in U.S. projects and

purchase $100 billion in U.S. energy products.

The announcement is the latest in a series of trade deals

rushed out before Friday's deadline to avert the imposition of

Trump's April 2 "Liberation Day" tariffs.

Meanwhile, copper futures plunged 19.4% after Trump

said the U.S. would impose a 50% tariff on copper pipes and

wiring, falling short of the expectation of sweeping

restrictions.

ON HOLD

The Federal Reserve's rate-setting committee voted 9-2 on

Wednesday to hold U.S. rates steady for the fifth consecutive

meeting, with two Fed governors dissenting for the first time in

more than three decades.

Fed Chair Jerome Powell's comments after the decision

undercut confidence that borrowing costs would fall in

September.

The dollar index steadied at 98.718, knocked from the

two-month high of 99.987 it touched on Wednesday. The index is

set for a 3.1% gain for the month, its first in 2025.

"Although the Federal Reserve decided to keep rates steady

at its recent rate setting decision, the chance of rate cuts at

upcoming meetings remains live as they balance softening

economic data with the potential for persistent inflation," said

Manusha Samaraweera, fixed income investment director at Capital

Group.

U.S. gross domestic product growth rebounded more than

expected in the second quarter, but the details of the report

painted a picture of an economy losing steam and plagued by

uncertainty from Trump's protectionist trade policies.

Brent crude futures for September delivery were down

26 cents to $72.98 a barrel, while U.S. West Texas Intermediate

crude for September fell 25 cents to $69.75 a barrel as

traders exited positions set to expire on Thursday.

Brent October crude futures also fell 33 cents to

$72.13 amid reports that proposed EU tariffs on crude palm

kernel and oil might be removed.