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MORNING BID-Riding the Fed dragon

By Stephen Culp

Feb 2 (Reuters) - A look at the day ahead in markets from Stephen Culp, New York stock market reporter.

Asian markets are set for an upbeat Thursday as U.S. stocks whipsawed to a higher close after the Federal Reserve delivered an expected 25 basis point interest rate hike and warned it still expects 'ongoing increases' as it battles inflation.

All three major U.S. stock indexes reversed earlier losses to sail across the finish line in positive territory, under assurances from Fed Chairman Jerome Powell that he believes price growth can be tamed "without a significant economic decline."

In his remarks and Q&A session following the policy decision, Powell said "there's more work to do," before its goals are met, but acknowledged data shows inflation is beginning to cool.

"The door is cracking open to end rate hikes, but they still have a chance for one more rate hike at the next meeting," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "Inflation data continues to show major improvements, which is exactly what the Fed needs to take their foot off the pedal."

The European Central Bank and the Bank of England are expected to hike their key interest rates by 50 basis points on Thursday.

On the economic front, restrictive central bank policies appear to be dampening factory activity, with purchasing managers' indexes around the world either in contraction or struggling to expand.

Fourth-quarter earnings season is running on all cylinders, with 190 of the companies in the S&P 500 having reported already. Of those, 69% have delivered consensus-beating profits, according to Refinitiv.

Shares of Meta Platforms Inc jumped more than 18% in extended trading after the social media bellwether forecast first-quarter revenue above Wall Street estimates, signaling a rebound in demand for digital ads after months of weak sales.

Healthcare companies BristolMeyers-Squibb Co, Eli Lilly and Co and Merck & Co are due to report before trading commences on Wall Street on Thursday, with the heavy-hitting triple play of Apple Inc, Amazon.com and Alphabet Inc expected after the session ends.

Elsewhere, the U.S. dollar lost ground against a basket of world currencies, while crude prices settled sharply lower due to a buildup of U.S. oil stocks.

Here are some key developments that could provide more direction to markets on Thursday:

- South Korea releases CPI inflation data (Jan)

- Australia posts building approvals (Dec)

- U.S. planned layoffs (Jan), weekly jobless claims land before the opening bell, factory orders (Dec) shortly after

(Reporting by Stephen Culp; Editing by Deepa Babington)