As the labor market shows signs of softening and the economy cools, traders are increasingly confident that the Federal Reserve will cut interest rates in september.

Sentiments of a softening labor market and cooling economy have fueled a rally in stocks while keeping the dollar under pressure. Nevertheless, there are lingering concerns that instead of achieving a "soft landing," the economy might veer towards a recession.

Futures suggest that European stock markets are poised for a higher opening, with the STOXX 600 expected to rebound after Tuesday's drop. Investors are eagerly awaiting PMI data from the Eurozone, France, and Germany. Additionally, Thursday's meeting of the European Central Bank is likely to keep risk appetite in check, as traders seek clarity on the central bank’s actions following the widely anticipated rate cut this week.

Asian stocks overall advanced after U.S. job openings in April fell more sharply than expected, reaching their lowest level in over three years. These figures led markets to price in a 65% chance of a rate cut by the Fed in September and a total of 45 basis points of easing this year. As a result, Treasury yields dropped, and the dollar wavered near a two-month low. Attention is now shifting to the upcoming non-farm payroll data set for release on Friday.

In Asia, focus remains on Indian markets after a sharp decline on Tuesday following election results that showed a narrower than expected lead for Prime Minister Narendra Modi. The Nifty 50 index exhibited volatility at the start of trading.