Dax Index News: Inflation, PMI, and Fed Outlook to Guide DAX Forecast This Week

DAX Steadies After Two Days of Heavy Losses

The DAX rose 0.27% on Friday, May 30, partially reversing Thursday’s 0.44% loss to close at 23,998.

Investors initially brushed aside the Court of Appeals’ ruling, reinstating Liberation Day tariffs. However, sentiment shifted after Trump accused China of breaking the 90-day truce agreement by delaying exports of rare earth minerals.

Despite renewed tariff tensions, hopes for a US-EU trade agreement and expectations of multiple ECB rate cuts buoyed demand for DAX-listed stocks.

Auto and Tech Stocks Cap Gains

An escalation in the US-China trade war weighed on demand for auto and tech stocks.

Infineon Technologies dropped 1.21%, while Porsche declined 1.04%. Volkswagen, BMW, and Mercedes-Benz Group also posted losses.

Meanwhile, Zalando led the gains, rallying 1.89% on softer inflation data and sentiment toward the ECB rate path.

German Retail Sales and Inflation Fuel ECB Rate Cut Bets

Retail sales slid 1.1% month-on-month in April, reversing a 0.9% rise in March, supporting a more dovish ECB stance. Weak consumer spending may dampen inflationary pressures, supporting rate cuts.

Meanwhile, underlying inflation eased from 2.2% in April to 2.1% in May, nearing the ECB’s 2% target. The softer inflation print raised expectations of multiple ECB rate cuts, driving demand for DAX-listed stocks.

German Manufacturing PMI in Focus

On Monday, June 2, Germany’s finalized manufacturing PMI data will require consideration. According to the flash survey, the HCOB Manufacturing PMI rose from 48.4 in April to 48.8 in May. A higher PMI reading may ease concerns about the impact of tariffs, boosting demand for German stocks. However, a lower print may raise recession risks, potentially sending the DAX lower.

Wall Street Mixed as Economic Data Send Mixed Signals

US markets posted mixed results on May 30 as investors considered crucial economic data and trade headlines. The Dow gained 0.13%, while the Nasdaq Composite Index and the S&P 500 fell 0.32% and 0.01%, respectively.

The US Core PCE Price Index rose 2.5% year-on-year in April, down from 2.7% in March, highlighting easing price pressures. However, personal income jumped 0.8% month-on-month in April, up from a 0.7% rise in March. Rising income could fuel consumer spending and inflationary pressures.

April’s figures failed to boost hopes for a Q3 2025 Fed rate cut, weighing on risk sentiment. The Fed’s Mary Daly remarked on the inflation report, reportedly stating:

“The inflation number that printed today, that’s good relief for American consumers,” but added that the data was an “incomplete picture of what we have to look at as policymakers; we have to look forward, and there are risks.”

ISM Manufacturing PMI in Focus

Later in the June 2 session, US manufacturing sector data will be in the spotlight. Economists forecast the ISM Manufacturing PMI will remain at 48.7 in May. A steady headline PMI would shift the focus to employment, new orders, and price sub-components.

Rising employment, new orders, and prices could ease recession concerns, supporting risk assets, including the DAX. Conversely, weaker figures may increase recession risks, impacting risk sentiment.

Beyond the data, traders should monitor Fed reactions to Friday’s inflation report.

Outlook: What Could Drive the DAX Next?

The DAX’s near-term outlook hinges on Eurozone inflation data, private sector PMIs, US labor market data, trade developments, and central bank signals.

• Bullish Case: Easing trade trends, softer inflation, upbeat PMI and labor market data, and dovish central bank cues could send the DAX toward 24,500
• Bearish Case: Rising trade tensions, hotter inflation, weak PMI and labor market data, or hawkish central bank rhetoric may send the DAX toward 23,750.

As of Monday morning, the DAX futures were down by 13 points, while the Nasdaq 100 mini dropped 80 points, reflecting sentiment toward trade developments.

Technical Setup Suggests Cautious Optimism

The DAX trades above the 50-day and the 200-day Exponential Moving Averages (EMA), indicating underlying bullish momentum.

• Upside Target: A climb to the May 28 record high of 24,326 could signal a move toward 24,500. A sustained breakout above 24,500 would bring 24,750 into sight.
• Downside risk: A drop below 23,750 exposes the May 23 low of 23,275, with 23,000 the next key support level.

The 14-day Relative Strength Index (RSI), at 61.69, suggests the DAX has room to revisit 24,326 before entering overbought territory (RSI > 70).

Conclusion: Eyes on Data and Trade Headlines

Traders should closely monitor key economic data releases, central bank signals, and trade developments for guidance.

Explore our exclusive forecasts to see whether trade optimism can send the DAX to new highs. Refer to our latest forecasts and macro insights here for further analysis, and consult our economic calendar.