DAX Eyes 22,500 as Tariffs and Earnings Take Center Stage
US tariff news lifted risk sentiment on Tuesday, April 29. The DAX climbed 0.46% to 22,374 at the open as investors reacted to President Trump’s plans to ease auto sector tariffs.
The Trump administration will reportedly lower tariffs on foreign car part imports to support domestic car manufacturing. Investors viewed the latest move as further evidence of Washington’s softening stance on trade policies.
Sector Performance: Autos Slide on Tariff Jitters
Despite plans to lower tariffs on auto parts, planned levies on car imports continued to pressure Germany’s carmakers amid demand concerns. Mercedes-Benz Group slid 2%, with Porsche, Volkswagen, and BMW posting early losses.
On the earnings calendar, Adidas and Deutsche Bank are among the big names releasing results. Deutsche Bank rallied 2.07% at the open, while Adidas dropped 0.18%.
German Consumer Confidence Unexpectedly Improves
Ahead of the European opening bell, the GfK Consumer Confidence Index climbed to -20.6 in May, up from -24.3 in April. Economists had forecast a decline to -26.
Income expectations and the willingness to buy showed marked increases, with economic expectations improving marginally.
DAX Price Forecast
Every new DAX analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all DAX forecastsNuremberg Institute for Market Decisions (NIM) Consumer Expert Rolf Burkl commented:
“It is clearly more important to German consumers at present that a government will be formed quickly. As a result, a key driver of previous uncertainty has lost significance – and the willingness to save has declined accordingly.”
US Markets Start the Week Mixed Amid Tariff Uncertainties
Amid ongoing tariff uncertainty, US equity markets posted mixed results on April 28, capping the DAX’s gains. The Dow and the S&P 500 gained 0.28% and 0.06%, respectively, extending their winning streaks to five sessions. Meanwhile, the Nasdaq Composite Index fell 0.10%, ending its four-day rally.
Despite the softer stance on auto tariffs, concerns about the US-China trade war tested investor sentiment. This week, Beijing canceled a sizable pork shipment, targeting Trump’s farming constituency, potentially escalating tensions. The move followed recent tariff cuts on select US imports to tackle rising domestic prices and support the economy.
US Consumer Confidence and Labor Market in Focus
Later today, US consumer confidence data will influence market sentiment. Economists forecast the CB Consumer Confidence Index to slide from 92.9 in March to 87 in April. A sharp drop may signal a pullback in spending. Given private consumption contributes over 60% to US GDP, weaker sentiment may fuel recession fears and impact risk assets.
Labor market data will also be in focus. Economists expect JOLTs job openings to fall from 7.568 million in February to 7.5 million in March. A weaker labor market may impact wage growth, consumer confidence, and consumption.
The Kobeissi Letter recently reported on the chances of a US recession, stating:
“1-year recession odds priced by the S&P 500 earnings yield and the BBB-rated corporate bond spread have jumped to 60%, the highest since 2022. Over the last few weeks, the probability of a downturn has TRIPLED. In the past, every time this metric surpassed 80%, the US economy was in a recession.”
Rising recession risks could heighten market sensitivity to economic data, earnings, and central bank guidance.
Near-Term Outlook
The DAX’s near-term trajectory hinges on economic indicators, trade headlines, and central bank guidance.
- Bearish Scenario: Rising US-EU trade tensions, weak economic data, and hawkish central bank commentary could send the DAX below 22,000.
- Bullish Scenario: Progress on a US-EU trade deal, strong economic reports, and dovish central bank rhetoric could drive the DAX toward 22,500.
DAX Technical Indicators
Daily Chart
The DAX remains above the 50-day and 200-day Exponential Moving Averages (EMA), supporting a bullish outlook after a five-day winning streak.
A breakout above the April 1 high of 22,574 could open the door toward 22,750. A decisive move through 22,750 may enable the bulls to target 23,000.
On the downside, a fall below 22,000 could expose the 50-day EMA. A sustained break below the 50-day EMA may bring the 21,500 handle into sight.
The 14-day Relative Strength Index (RSI) at 57.81 suggests the DAX could climb toward the record high of 23,476 before entering overbought territory (RSI > 70).
Final Thoughts
Market volatility remains elevated as trade developments continue to influence market sentiment. US-EU and US-China trade headlines require close monitoring, with stalled talks likely to impact risk sentiment. However, progress toward supportive German fiscal policies could mitigate tariff risks.
Additionally, corporate earnings, ECB policy guidance, and upcoming US labor market data will also steer near-term direction. With central bank communication and geopolitical headlines likely to influence sentiment, traders should stay vigilant to shifts in sentiment and technical trends.
