US pre-open: Stocks set for weaker open as Fed-fuelled rally fades

US stocks were set to open lower on Thursday, giving back gains fuelled by the Federal Reserve in the previous session.

At 1110 GMT, Dow Jones Industrial Average and S&P 500 futures were down 0.3%, while Nasdaq futures were 0.4% lower.

At the same time, European equity markets were firmly in the red, reversing opening gains as the euro strengthened against the greenback, hitting exporters.

Oil prices were in the black, however, with West Texas Intermediate up 1.6% at $39.08 a barrel and Brent crude 1.3% firmer at $40.85.

On Wednesday, the Federal Reserve left the target range for the benchmark federal funds rate unchanged at 0.25% to 0.5%, as widely expected, but the accompanying statement was less hawkish than anticipated.

The Fed, which lifted interest rates for the first time in nearly a decade back in December, now expects two rate rises in 2016, down from the four projected at the end of last year.

"Proceeding cautiously will allow us to verify that the labour market is continue to strength given the economic risk from abroad," said chairwoman Janet Yellen.

“Such caution is appropriate given short term interest rates are still near zero, which means monetary policy has greater scope to respond to upside than downside changes in the outlook,” she said.

The Fed's decision was in contrast to recent moves from the Bank of Japan and the European Central Bank, both of which took interest rates into negative territory.

The US central bank said that although the labour market was improving, it was still looking for inflation to reach its 2% target and reckoned the economy would continue to expand at a moderate pace.

Societe Generale now expects one rate hike in 2016.

In corporate news, Caterpillar shares slid in pre-market trade after the construction equipment company cut its first-quarter earnings and revenue guidance.

FedEx was likely to be in focus after its third-quarter results released late on Wednesday came in better than expected.

Office Depot rallied in pre-market trade after The New York Post said Amazon.com might bid for its corporate business unit.

On the macroeconomic calendar, the Philadelphia Fed survey is at 1230 GMT, along with initial jobless claims and the current account balance.

The jobs data is expected to show that 268,000 Americans filed for unemployment claims last week, which is a 9,000 increase from the previous week.

In currencies, the dollar was 0.7% weaker against the pound, 1% lower versus the euro and 1.3% weaker against the yen.