People pass by an electronic screen showing Japan's Nikkei share price index inside a conference hall  in Tokyo
People pass by an electronic screen showing Japan's Nikkei share price index inside a conference hall in Tokyo, Japan June 14, 2022. Reuters

U.S. stocks were mixed and European shares ended nearly flat on Thursday as investors balanced mixed earnings reports and economic data, while the pound retreated from mid-September highs.

Oil prices extended their rally on optimism over record U.S. crude exports. The U.S. dollar gained against major currencies.

The ECB raised rates by 75 basis points, in line with expectations, and signaled it was keen to start shrinking its bloated balance sheet.

The more dovish tone pushed the euro back below parity against the U.S. dollar. Yields on the benchmark 10-year German bund dropped to a three-week low of 1.978%.

U.S. treasury yields slid further after data showed growth in U.S. consumer spending slowed in the third quarter, a sign inflation is peaking and the Federal Reserve can soon ease its aggressive hiking of interest rates.

The Dow Jones Industrial Average rose 0.61% following a slew of upbeat earnings reports and data that showed U.S. economic growth rebounded in the third quarter.

The S&P 500 lost 0.61% and the Nasdaq Composite dropped 1.63%, pressured by weak tech sector earnings, including a slump in shares of Facebook owner Meta.

"The U.S. is not currently in recession, given the strength of the consumer sector. However, excluding the more volatile categories, the trajectory for growth looks weak," Jeffrey Roach, Chief Economist for LPL Financial, said.

"A silver lining is markets have possibly priced in much of the near-term recession risks."

The MSCI world equity index, which tracks shares in 47 countries, fell 0.57%.

Asian markets benefited from speculation among investors that major central banks are considering slowing their aggressive interest hikes, given signs of an economic slowdown.

Europe's STOXX 600 ended slightly lower after recovering most of the session's losses. It touched its highest level since Sept. 20 as the European Central Bank President Christine Lagarde spoke.

London's FTSE 100 was up 0.25% while Germany's DAX was up 0.12%, both recovering earlier losses.

Investors are focused on the outlook for future rate hikes.

"We expect the ECB to slow its pace of rate rises, hiking 'only' another 50 bps in December," said Altaf Kassam, head of EMEA investment strategy and research at State Street Global Advisors.

Caterpillar Inc and McDonald's Corp rose after reporting earnings, while Facebook-parent Meta Platforms Inc slumped on a drop in third-quarter profit.

Emerging market stocks extended gains to a third straight session. MSCI's index of EM stocks was up 0.9%.

The Bank of Canada delivered a smaller-than-expected rate hike late on Wednesday, bolstering investors' hopes that central banks would slow their aggressive pace of rate hikes.

Data on Thursday also showed the Federal Reserve's interest rate increases hurt consumer spending.

The Fed is expected to deliver a 75-bps hike in November.

The yen gave back early gains seen ahead of Friday's Bank of Japan meeting. Most analysts expect the central bank to maintain its ultra-low interest rates.

Gold eased, weighed by the greenback's advance. U.S. gold futures GCv1 settled at $1,665.60, 0.2% lower on the day. Spot prices were down 0.18%. [GOL/]

Brent crude settled up $1.27, or 1.3%, to $96.96 a barrel while U.S. West Texas Intermediate (WTI) crude settled up $1.17, or 1.3%, to $89.08 a barrel.[O/R]