Dax Index News: Forecast Eyes 24,500 as Tech Gains and Tariff Talks Lift Sentiment

DAX Climbs on US-EU Trade Developments

Reports of the US proposing a 10% baseline tariff, with some exceptions, fueled hopes about a US-EU trade deal. The DAX gained 0.24% to 24,132 in early trading on Tuesday, July 8, building on Monday’s gains.

CN Wire remarked on the latest US-EU trade developments, stating:

“The United States has proposed a deal to the European Union, maintaining a 10% baseline tariff on all EU goods, with some exceptions for sectors like aircraft and spirits, according to EU diplomats and national officials. The Trump administration announced on Sunday that it would delay the return of tariffs until August 1, at which point they would revert to April 2 rates for countries that fail to finalize new trade deals.”

CN Wire commented on politically sensitive sectors and tariffs, adding:

“The terms of any trade agreement remain uncertain and dependent on Trump’s approval. The U.S. has not indicated it will exempt politically sensitive industries such as cars, steel, aluminum, or pharmaceuticals, as the EU requested. France, Italy, and Ireland are expected to welcome exemptions for spirits and aircraft.”

German Exports Slide as Demand Wanes

Germany’s trade surplus widened from €14.6 billion in April to €18.4 billion in May. Exports slid 1.4% month-on-month in May after dropping 1.7% in April, while imports plunged 3.8% (April: +3.9%).

With tariffs in focus, exports to the US dropped 7.7% month-on-month in May, while imports from the US plunged 10.7%. Trade terms with EU countries also weakened, underscoring a deteriorating demand environment.

Sector Performance: Tech Stocks Advance

Tech stocks posted early gains on July 8 as investors tracked trade developments. Infineon Technologies and SAP rose 0.36% and 0.10%, respectively.

However, uncertainty about tariff exemptions on auto exports weighed on carmaker shares. BMW dropped 0.32%, with Mercedes-Benz Group, Porsche, and Volkswagen also posting early losses.

Wall Street Drops on Trump’s Tariff Announcements

US markets posted losses on July 7 as investors reacted to trade developments. The Dow and the Nasdaq Composite Index fell 0.94% and 0.92%, respectively, while the S&P 500 dropped 0.79%.

US President Trump announced 25% tariffs on South Korea and Japan, mirroring the April 2 (Liberation Day) levies, impacting sentiment. However, Trump also stated that tariffs could be adjusted depending on trade relations. These tariffs are scheduled to take effect on August 1 unless trade agreements are finalized beforehand.

US Consumer Inflation Expectations and the Fed in Focus

Later in the Tuesday session, US inflation will be in the spotlight. Economists expect consumer inflation expectations to remain steady at 3.2% in June. A higher print may temper Fed rate cut bets, pressuring risk assets such as the DAX. By contrast, a lower reading could reinforce expectations of a more dovish Fed stance, lifting equities.

While the economic data will influence risk appetite, trade developments remain crucial for the DAX.

Near-Term Outlook

The DAX’s trajectory hinges on US-EU trade developments, US economic data, and central bank signals.

• Bearish Scenario: Rising US-EU trade tensions, strong US inflation data, or hawkish central bank guidance. Under these scenarios, the DAX could drop toward 23,750, exposing the 50-day EMA.
• Bullish Scenario: Progress toward a US-EU trade deal, cooler US inflation expectations, and dovish central bank cues may drive the DAX toward the June high of 24,479.

DAX Technical Indicators

Daily Chart

Despite tariff uncertainty, the DAX remains above the 50-day and 200-day Exponential Moving Averages (EMA), signaling a bullish bias.

A breakout above 24,150 could bring the June 5 high of 24,479 into play. Sustained buying pressure may drive the DAX toward 24,750.

On the downside, a break below 24,000 could signal a fall toward 23,500 and the 50-day EMA.

The 14-day Relative Strength Index (RSI), at 58.37, suggests the DAX could climb to 24,479 before entering overbought territory (RSI > 70).

Final Thoughts

Volatility may build as investors digest trade headlines, key economic data, and central bank rhetoric.

Traders should monitor both technical and fundamental drivers and consult our economic calendar.