A look at the day ahead in U.S. and global markets from Mike Dolan

The worst day for the S&P500 since 2022 and mounting central bank easing bets suggest markets' serene 'soft landing' scenario is being questioned as China growth worries and U.S. election risks mount.

Even though a withering swoon in megacap tech stocks this week comes in the thick of the corporate earnings season, the incoming aggregate profit growth picture remains buoyant overall. A first cut of second-quarter U.S. GDP estimates later on Thursday will hold that further up to the light.

Jitters about the lofty valuations of the so-called Magnificent Seven stock leaders, worries about excessive spend in artificial intelligence and exposure to China's stuttering economy have all been cited variously for the sharp pullback.

Wednesday's Wall Street stock rout, which saw the S&P 500 mark its first 2%-plus loss in 356 sessions after sharp post-earnings losses for Tesla and Alphabet, sent shares tumbling around the world overnight.

The VIX volatility gauge topped 19 for the first time since April even as stock futures tried to find a foothold on Thursday.

But aided by stepped-up Federal Reserve interest rate cut bets, a second Bank of Canada rate cut of the year on Wednesday and after China's central bank added more cuts to this week's surprise monetary easing, there appeared to be a dash for safety in bonds and havens like Japan's yen and the Swiss franc surged.

Despite a heavy diary of new Treasury sales this week, two-year U.S. yields fell to their lowest since February and the yield curve steepened. Partly on post-election fiscal worries, the 2-to-30-year yield curve has turned positive to its steepest in almost two years.

And a discombobulating twist behind the soaring yen, which hit its best levels since early May, was rising speculation about a Bank of Japan interest rate rise as soon as next week just when all its peers are in reverse mode.

Sources told Reuters that the central bank is likely to debate whether to raise rates next week and unveil a plan to roughly halve bond purchases in coming years.

China's yuan, recently tied at the hip yen trends, also jumped.

And yet worries about the world's second largest economy - which potentially faces a ratcheting of trade tariffs and curbs after the U.S. election - was a theme through the stock wobble too.

Europe's China-exposed luxury sector, reeling from this week's earnings disappointment from LVMH, took another hit on Thursday as Gucci-owner Kering missed and its stock plunged 8%.

Another standout loser in Europe was Universal Music, which plummeted 26% after reporting a slowdown in its subscription and streaming segment.

Key developments that should provide more direction to U.S. markets later on Thursday:

* US Q2 GDP, weekly jobless claims, June durable goods orders, July Kansas City Fed manufacturing survey

* US corporate earnings: AbbVie, American Airlines, Southwest Airlines, Dow, Eastman Chemical, Honeywell, Union Pacific, Northrop Grumman, PG&E, Dover, Norfolk Southern, Valero Energy, DTE Energy, CMS Energy, Baker Hughes, CBRE, Hasbro, Keurig Dr Pepper, Cincinnati Financial, Principal Financial ( PFG ), Dexcom, Deckers Realty, Juniper Networks, L3Harris, Verisign, Weyerhaeuser, Wills Towers Watson etc

* European Central Bank President Christine Lagarde speaks

* US Treasury sells $44 billion of 7-year notes and $90 billion of 4-week bills

(By Mike Dolan, editing by Christina Fincher; [email protected])