Dax Index News: Forecast Eyes Breakout as US-EU Deal and Fed Speeches Drive Outlook

DAX Breaks Higher as Markets Cheer US-UK Deal; Eyes on EU Pact

A US-UK trade deal boosted hopes for a US-EU trade agreement on Thursday, May 8, driving demand for German-listed stocks. The DAX rallied 1.02%, with upbeat corporate earnings contributing to the gains.

Earnings Impress Amid Cooling Trade Tensions

Corporate earnings bolstered risk sentiment. Heidelberg Materials jumped 4.8% after beating earnings forecasts. Rheinmetall rallied 4.13% after reaffirming its outlook to surpass 2025 guidance. Siemens Energy gained 3.32% after topping earnings estimates.

Easing trade tensions also fueled demand for auto stocks. Volkswagen and BMW posted gains of 3.64% and 2.81%, respectively. However, Mercedes-Benz Group bucked the trend, sliding 5.78% after cutting its dividend.

Commerzbank’s earnings on May 9 will draw attention next.

German Data Points to Strong Q1 Finish

Meanwhile, positive trade and industrial production data had a limited impact on demand, with markets likely attributing the upswing to pre-tariff front-loading. Exports increased 1.1% in March after rising 1.8% in February, while industrial production soared 3% in March (February: -1.3%).

Oliver Rakau, Chief Germany Economist and ECB Commentator at Oxford Economics, commented:

” Big surge in German IP in March. The 20% surge in pharma was likely due to US tariff front-running. But gains were broad-based. Easter in April may be another reason. Surveys/orders speak against this surge lasting. But scale of rise also in exports may trigger Q1 GDP revision?”

US Markets Rally on Trade Optimism

Wall Street extended gains from Wednesday as the US-UK trade deal fueled demand for risk assets on Thursday, May 8. The Nasdaq Composite Index rallied 1.07%, while the Dow and the S&P 500 gained 0.62% and 0.58%, respectively.

US economic data took a backseat on May 8, as trade developments continued dictating risk sentiment and market trends.

Fed Speakers in Focus

In today’s US session, FOMC members’ speeches and trade developments will influence risk appetite. Members Goolsbee, Waller, and Williams are on the calendar to speak. Views on inflation, the economy, and monetary policy could affect demand for DAX-listed stocks.

However, investors should closely monitor trade headlines. Progress toward a US-EU trade deal ahead of US-China talks would trigger a DAX breakout. Conversely, rising tensions may sink German-listed export stocks.

DAX Outlook: Trade and Central Banks in Focus

The DAX’s trajectory depends on trade developments, corporate earnings, and FOMC member commentary.

• Bullish Case: Resumed US-China trade talks, upbeat earnings, and a dovish Fed stance could drive the DAX above 23,476.
• Bearish Case: Escalating US-China trade tensions, US recession fears, or a hawkish Fed stance could drag the DAX toward 22,750.

As of Friday morning, the DAX futures were up 49 points, while the Nasdaq 100 mini climbed 42 points, signaling a positive start to the session.

Technical Setup Suggests Cautious Optimism

Following Thursday’s rally, the DAX trades well above the 50-day and the 200-day Exponential Moving Averages (EMA), indicating positive momentum.

• Upside Target: A break above the record high of 23,476 could open the door to testing resistance at 23,750. A decisive move through 23,750 may bring 24,000 into sight.
• Downside risk: A drop below 23,150 could enable the bears to target 23,000, with stronger selling pressure putting 22,750 into play.

The 14-day Relative Strength Index (RSI) at 65.21 indicates the DAX has room to climb to the record high of 23,476 before entering overbought territory (RSI > 70)

Conclusion: Monitor Macro Themes and Trade News

DAX traders should remain alert to trade headlines, Fed chatter, ECB guidance, and earnings results, which could dictate short-term market direction.

Don’t miss our exclusive forecast on whether trade optimism can fuel a DAX breakout. Click here to explore our latest DAX research, macro insights, and emerging market coverage.