European equity markets are in the red this morning in the wake of last night’s Federal Reserve meeting.

The US central bank didn’t rule out three more interest rate hikes this year, but at the same time it wasn’t overly bullish in terms of its growth outlook.

The sell-off in the US last night, and Asia overnight, triggered selling in Europe this morning. It is worth nothing that European indices like the FTSE, DAX and CAC 40 all hit multi-month highs yesterday, so a correction isn’t much of a surprise.

Just Eat shares are higher this morning after JP Morgan raised its price target for the stock from 656p to 775p. Yesterday, Berenberg upped its price target to 880p from 840p. Earlier this week, just Eat announced impressive first-quarter results and reiterated its full-year profit target. The stock is up 0.3% at 801p.

Smith & Nephew lowered its full-year outlook after the first-quarter was a little on the soft side. The company now predicts revenue growth of 2-3%, compared with the previous guidance of 3-4%. CEO Olivier Bohuon described the first-quarter performance as ‘mixed’, and also warned that it will miss its profit margin target. The stock rallied over 16% between February and May, so it would appear that investors had high hopes for today’s update. The stock is down 6.4%.

The US dollar index is a touch softer this morning after the Fed update last night. The US central bank seems to be neutral when it comes to policy, and seeing as it wasn’t as hawkish as traders had hoped, the greenback has waned today. Traders are still divided over whether the Fed will hike two or three more times this year.

GBP/USD slipped after UK services PMI in April came in at 52.8, weaker than economists’ expectations for a reading of 53.5, but above March’s 51.7 – which was the lowest figure since July 2016.

EUR/USD lost some ground after the eurozone announced the latest inflation figures. The CPI reading fell to 1.2% from 1.3%, and economists were expecting 1.3%.

At 1.30pm (UK time) the latest US jobless claims are released, and the consensus is for a reading of 225,000, which would be higher than the previous report of 209,000.

We are expecting the Dow Jones to open up 16 points at 23,940 and we are calling the S&P 500 up 2 points at 2637.

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