Dax Index News: Outlook Hinges on Tariffs, Powell, Ceasefire—Forecast Volatile

DAX Hits Eight-Day High as Iran and Israel Agree to Ceasefire

European equity markets rebounded on news of an Iran-Israel ceasefire. On Tuesday, June 24, the DAX rallied 1.60%, reversing Monday’s 0.35% loss to close at 23,642.

US President Trump announced an Iran-Israel ceasefire shortly after the US market close on June 23, driving demand for risk assets. WTI crude oil prices slid 3.41% on June 24 to close at $64.495 after plunging 9.22% on June 23. Easing fears of Iran closing the Strait of Hormuz impacted oil prices.

The sharp drop in oil prices eased fears of an inflation spike and potential Fed and ECB rate hikes to tame inflation.

Upbeat German business sentiment data contributed to the session gains. The Ifo Business Climate Index rose to 88.4 in June, up from 87.5 in May. The Ifo Institute noted that expectations brightened, with the German economy slowly building confidence.

Sector Performance: Banks Lead Auto Stocks Higher

Deutsche Bank led the gains on June 24, soaring 5.34%, while Commerzbank rallied 2.28%.

Meanwhile, Daimler Truck Holding jumped 3.52%, with Mercedes-Benz Group, BMW, and Volkswagen posting gains. However, uncertainty about US-EU trade policies capped gains for BMW and Volkswagen, while Porsche ended the session in the red.

Wall Street Rallies on Middle East Truce and Fed Chair Powell Testimony

US markets rallied on June 24 as investors reacted to the Iran-Israel ceasefire. The Nasdaq Composite Index climbed 1.43%, while the Dow and S&P 500 advanced 1.19% and 1.11%, respectively.

Fed Chair Powell’s testimony also bolstered demand for risk assets, including the DAX. Powell downplayed the chances of a July rate cut but left a September move on the table.

US economic data supported a more dovish Fed stance. The Conference Board Consumer Confidence Index slid from 98.4 in May to 93 in June. Notably, the June survey signaled weakening sentiment toward the labor market and a softer inflation outlook.

Fed Chair Powell Testimony – Day Two in Focus

Later in the June 25 session, Fed Chair Powell will deliver a second day of testimony on Capitol Hill. Investors should watch for any deviation from Tuesday’s script. More compelling arguments to cut rates in September could lift sentiment, potentially sending the DAX higher. However, greater caution about cutting rates may pressure risk assets.

While Powell’s testimony needs consideration, trade developments and updates from the Middle East remain crucial. Key German sectors, including autos, healthcare, and tech, face uncertainty as the July 9 end to the 90-day tariff pause looms.

Outlook: Key Catalysts for the DAX

The DAX’s near-term trajectory hinges on Middle East developments, trade headlines, and central bank commentary.

• Bullish Case: Progress toward a US-EU trade deal, an upheld Iran-Israel ceasefire, and dovish central bank cues could drive the DAX toward 24,000.
• Bearish Case: Renewed Iran-Israel tensions, stalled US-EU trade talks, or hawkish central bank rhetoric may drag the DAX toward the 50-day EMA.

At the time of writing on June 25, the DAX futures gained 47 points, while the Nasdaq 100 was down 5 points. The Futures markets signaled a choppy start to the mid-week session.

Technical Setup Suggests Cautious Optimism

After Tuesday’s rebound, the DAX trades above the 50-day and 200-day Exponential Moving Averages (EMA), indicating bullish momentum.

• Upside Target: A breakout from 23,750 could support a move to 24,000. A sustained move through 24,000 could enable the bulls to target the June 5 high of 24,479.
• Downside risk: A break below 23,500 would expose the 50-day EMA. Sustained selling pressure may bring the crucial 23,000 support level into sight.

The 14-day Relative Strength Index (RSI), at 51.18, suggests the DAX could climb to 24,479 before entering overbought territory (RSI > 70).

Middle East, Tariffs, and Central Banks

Traders should closely monitor the headlines from the Middle East, tariff developments, and central bank cues. Renewed Iran-Israel tensions and stalled US-EU trade talks could impact risk assets, overshadowing central bank guidance.

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.