European Shares Seen Opening Mixed As Recession Fears Mount

European stocks may open on a cautious note on Thursday as the latest signals from the bond market pointed to a heightened risk of a recession

Amid increased uncertainty about the U.S.-Chinese tariff war, analysts believe that the Federal Reserve may be compelled to cut short-term interest rates to support the economy.

"We are winning, big time, against China…Our problem is with the Fed," U.S. President Donald Trump said on Twitter Wednesday. Trump also said Fed Chairman Jerome Powell was "clueless."

Asian markets slid on global growth woes, while oil extended losses after having dropped 3 percent in the previous session on data showing an unexpected rise in U.S. crude inventories and amid mounting fears of a recession.

Retail sales data from the U.K. is due later in the day, headlining a light day for the European economic news. Economists expect retail sales to fall 0.2 percent sequentially in July following a 1 percent rise in June.

Across the Atlantic, reports on weekly jobless claims, retail sales and industrial production are likely to be in the spotlight, although data on regional manufacturing activity, labor productivity and costs, business inventories and homebuilder confidence may also attract attention.

Retail giants Walmart and J.C. Penney are among the companies due to report their results before the U.S. opening bell.

Overnight, U.S. stocks succumbed to heavy selling pressure amid concerns about an imminent recession after long-dated Treasury yields inverted for the first time in 12 years.

The Dow Jones Industrial Average plunged as much as 3.1 percent and the S&P 500 lost 2.9 percent to end at their lowest closing levels in over two months, while the tech-heavy Nasdaq Composite tumbled 3 percent.

European markets tumbled on Wednesday as Brexit jitters coupled with weak data from China and Germany spurred fresh concerns about the global economic outlook.

The pan-European Stoxx Europe 600 index fell 1.7 percent to hit a six-month low. The German DAX gave up 2.2 percent, France's CAC 40 index shed 2.1 percent and the U.K.'s FTSE 100 tumbled 1.4 percent.