A look at the day ahead in European and global markets from Stella Qiu

After relentlessly pushing higher and higher, global share markets seem to have run out of reasons to rally further as investors come to grips with how stretched valuations are.

Wall Street closed lower for a second day and that provided little direction for Asia, with stocks here mostly sticking to tight ranges. Chinese bluechips, however, were an exception, up 0.9%, catching up on the global AI surge.

Europe is also set for a flat open, with EUROSTOXX 50 futures little changed. Wall Street futures were up 0.2%.

Maybe it was month-end or quarter-end rebalancing flows - after all Asian shares have rallied 9% for the quarter and Japan's Nikkei up 13%. Or it could be more Fed speakers sounding a little cautious on the prospects of rate cuts.

Futures still imply a 92% chance for a rate cut from the Fed in October, but the total expected easing has faded to 100 bps, from 125 bps a few weeks ago.

San Francisco Fed President Mary Daly echoed other central bankers by suggesting while further rate cuts are needed, their timing remains unclear. More Fed officials will be speaking during the day, including New York President John Williams, and we will get to see how many doves there are under President Donald Trump's unprecedented scrutiny of the board.

Treasury Secretary Scott Bessent will start interviewing candidates next week to replace Jerome Powell as the Fed Chair.

The dollar held onto its mysterious bounce overnight, up 0.6% against major peers, but its short-term technical outlook is still dim. Still, the bounce has left yen bulls reeling after some traders piled into long yen positions following the Bank of Japan's hawkish policy meeting last week.

That spilled into yen crosses, with the Swiss franc hitting an all-time high on the yen and the euro hovering at over a one-year peak at 174.66, just below a record top of 175.90.

Next up, we have weekly U.S. jobless claims and the final estimate for the second quarter U.S. GDP, before the all-important Personal Consumption Expenditures (PCE) on Friday.

A sharp rise in jobless claims - which has gained some added significance given the focus on the labour market - would reinforce the case of two more cuts this year, while a strong result would likely bolster the dollar and send short-term yields higher.

Key developments that could influence markets on Thursday:

-- U.S. data, including trade, weekly jobless claims, durable goods

--Six Federal Reserve officials scheduled to speak: Austan Goolsbee, John Williams, Jeffrey Schmid, Michelle Bowman, Michael Barr and Mary Daly

-- U.S. Treasury auctions $44 billion of 7-year notes

(Editing by Sam Holmes)