Dax Index News: Forecast Eyes 24,500 Amid Putin-Trump Peace Talks, Fed Pivot

DAX Extends Rally on Earnings, War Hopes – Will It Break 24,500?

Markets cheered signs of peace, extending the DAX’s winning streak. The DAX rallied 1.12% on Thursday, August 7, following Wednesday’s 0.33% gain, closing at 24,193.

Reports of President Trump and Russian President Vladimir Putin planning to meet fueled speculation about an end to the Russia-Ukraine war.

German trade data showed a sharp drop in exports to the US and a surge in imports from the US, potentially easing trade tensions. The trade data coincided with US tariff hikes, effective August 7.

German exports increased 0.8% month-on-month (MoM) in June after declining 1.4% in May, despite exports to the US falling 2.1% (MoM). Meanwhile, imports surged 4.2%, with shipments from the US soaring 19.8%. EU countries boosted demand for German goods, easing concerns about US tariffs impacting the economy.

Oliver Rakau, Chief German Economist and ECB Commentator at Oxford Economics, remarked:

“German exports remained resilient to the drag from tariff front-running, reversing in June as exports to the US plunge 19% in three months.”

Hopes for a September Fed rate cut continued to bolster demand for risk assets, contributing to Thursday’s gains.

Russia-Ukraine War Headlines and Corporate Earnings Spotlight the DAX

Heidelberg Materials led the gains on Thursday, jumping 6.04% on reports of the Trump-Putin meeting. Bank stocks also benefited from the potential end of the Ukraine war. Commerzbank rallied 4.94%, while Deutsche Bank gained 2.64%.

Allianz SE (+4.11%) and Siemens AG (+3.7%) contributed to the session gains after posting upbeat earnings results. However, Rheinmetall AG (-7.99%) and Deutsche Telekom (-4.98%) tumbled after releasing disappointing earnings, capping the Index’s gains.

Munich Re will release its earnings results today.

Wall Street Mixed as US Labor Market and Corporate News Test Sentiment

Investors brushed aside trade developments as US economic data signaled deteriorating labor market conditions. However, market relief that US tech firms will avoid levies bolstered demand for tech stocks. The Nasdaq Composite Index gained 0.35%, while the Dow and the S&P 500 fell 0.51% and 0.08%, respectively.

US initial jobless claims rose from 219k (week ending July 26) to 226k (week ending August 2). Unit labor costs increased by 1.6% quarter-on-quarter in Q2, down from a 6.9% rise in Q1. Weaker labor market conditions could signal a sharp pullback in consumer spending, potentially weighing on the US economy. However, the data bolstered bets on a September Fed rate cut, cushioning the impact of the data on sentiment.

According to the CME FedWatch Tool, the chances of a September Fed move stood at 92.7% on August 7, down from 94.6% on August 6.

Fed in Focus as Labor Market Weakens

On Friday, August 8, Fed commentary could influence sentiment. Support for a September rate cut and further policy easing in Q4 could boost demand for risk assets such as the DAX. On the other hand, hawkish rhetoric in response to Thursday’s tariff hikes could weigh on sentiment. Higher tariffs may fuel inflation, potentially affecting the timing of Q4 rate cuts.

Outlook: Key Catalysts for the DAX

The DAX’s near-term outlook hinges on geopolitical headlines, trade developments, and central bank commentary.

• Bullish Case: Hopes for an end to the Ukraine war, easing trade tensions, and dovish central bank cues. These factors could send the DAX toward the crucial 24,500 resistance level.
• Bearish Case: Stalled Trump-Putin talks, rising trade friction, or hawkish central bank rhetoric may drag the DAX below 24,000, exposing the 50-day EMA.

At the time of writing on August 8, the DAX futures advanced 68 points, while the Nasdaq 100 climbed 63 points. Easing geopolitical risks and a more dovish Fed rate path lifted risk sentiment.

DAX Technicals

After the four-day winning streak, the DAX trades above the 50-day and 200-day EMAs, signaling bullish momentum.

• Upside Target: A breakout above the August 7 high of 24,392 could enable the bulls to target the 24,500 resistance level. A sustained move through 24,000 may pave the way to the July 10 record high of 24,639.
• Downside risk: A break below the 24,000 level would bring the 50-day EMA into play. If broken, the bears may target the crucial 23,500 support level.

DAX Outlook Summary: Trade Developments, Earnings, and Central Bank Rhetoric

Traders should closely monitor Russia-Ukraine-related headlines, corporate earnings, trade developments, and central bank commentary. Geopolitical-related updates and central bank guidance are likely to have great weight on the Index.

Explore our exclusive forecasts to assess whether improving trade sentiment could lift the DAX to new highs. Refer to our latest forecasts and macro insights here for further analysis, and consult our economic calendar.