The Spanish stock market index IBEX 35 opened almost unchanged on Thursday, after having dropped below the 11,000-point level on Tuesday, as investors reacted to the US Federal Reserve's decision to keep interest rates unchanged.

After a Labor Day holiday in Spain, the markets were awaiting comments from the president of the US central bank, Jerome Powell, who on Wednesday played down the risks of a rate hike.

"There are ways not to cut and there are ways to cut. It will all depend on the data," Powell said, which traders interpreted as ruling out a rate hike.

However, Powell insisted that persistent inflation meant that cuts could be a long time coming.

"The key is that the Fed still thinks the next move is much more likely to be a cut than a hike and the door is wide open," said Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney.

Across the Atlantic, the European Central Bank's head of monetary policy and governor of the Bank of Spain, Pablo Hernandez de Cos, said the ECB is increasingly confident that eurozone inflation could fall to its 2% target by mid-2025, after a bumpy few months between now and then.

On the macroeconomic front, attention will turn to the release of manufacturing PMIs for Spain, France, Germany and the eurozone, while later on Thursday investors will be looking ahead to Apple's results, where markets have been bracing for a big drop in sales.

At 0702 GMT on Thursday, Spain's selective IBEX 35 stock index was up 26.00 points, or 0.24%, to 10,880.40 points, while the FTSE Eurofirst 300 index of large European stocks was up 0.04%.

In the banking sector, Santander rose 0.75%, Caixabank advanced 1.29%, Bankinter gained 1.27%, and Unicaja Banco rose 2.28%.

BBVA fell 2.51%, after Wednesday's 12 billion euro bid for Sabadell, which rose 8.57%.

Among the large non-financial stocks, Telefónica gained 0.17%, Inditex advanced 0.49%, Iberdrola gained 0.48%, Cellnex gained 0.29%, and the oil company Repsol lost 1.49%.

Aena gained 3.44% after announcing on Tuesday after the markets closed that its quarterly profit doubled thanks to record passenger traffic.

Red Eléctrica advanced 0.32%, after reporting a 26.7% drop in its net profit in the first quarter.

ArcelorMittal added 0.98%, after presenting its first quarter results above analysts' expectations.

(Information by Benjamín Mejías Valencia; edited by Javi West Larrañaga)