Dax Index News: Today’s DAX Forecast Hinges on Trade Talks and Inflation Data

DAX Extends Gains Amid Easing Trade Tensions

The DAX extended its winning streak on Friday, May 16, as a rare alignment of trade deals and rate cut hopes reignited investor confidence. The DAX rose 0.30%, adding to Thursday’s 0.72% gain to close at 23,767.

The US-China trade truce and the US-UK trade deal boosted demand for German-listed stocks. However, economists suspect the US may have less urgency to sign an EU trade deal, testing demand for export-related stocks.

Meanwhile, US inflation data supported a 2025 Fed rate cut, adding to the positive sentiment. Crucially, economists expect the US-China trade truce to materially lower the risk of a US recession.

Stock Movers: Defense Stocks Extend Gains

The failed meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky raised concerns about a peace deal, boosting demand for defense stocks. Rheinmetall led the gains on May 16, rising 2.44%.

Meanwhile, German auto stocks faced selling pressure amid concerns about a US-EU trade deal. Mercedes-Benz Group fell 1.37%, with Volkswagen, BMW, and Porsche posting losses.

Eurozone Trade Surplus Jumps on Export Surge

The Eurozone’s trade surplus widened from €24.8 billion in February to €36.8 billion in March. Exports surged 13.6% year-on-year in March, while imports rose 8.8%. The jump in exports likely stemmed from tariff front-running. EU export data to the US showed a 59.5% year-on-year surge in March 2025, driving the EU’s trade surplus with the US to €40.7 billion (March 2024: €16.7 billion).

March’s trade figures could face more US scrutiny. Last week, President Trump said that trading with the EU was worse than trading with China, signaling potentially heated trade negotiations.

Eurozone Inflation in Focus

On Monday, May 19, finalized Eurozone inflation figures could influence the ECB rate path and demand for DAX-listed stocks. According to preliminary data, the core inflation rate accelerated from 2.4% in March to 2.7% in April. A higher print could dampen bets on multiple ECB rate cuts, pressuring rate-sensitive stocks. Conversely, a lower reading may boost risk sentiment.

Wall Street Gains Despite US Downgrade

Wall Street posted gains on May 16, amid easing US-China trade tensions. The Nasdaq Composite Index gained 0.52%, while the Dow and S&P 500 rose 0.78% and 0.70%, respectively.

Economic data sent gloomy signals. While consumer sentiment weakened, one-year inflation expectations unexpectedly jumped 6.5% in April to 7.3% in May, testing bets on a Q3 2025 Fed rate cut. The combination raised stagflation concerns as the Fed continues sending rate hold signals.

Meanwhile, Moody’s downgraded the US credit rating from Aaa to Aa1, impacting risk sentiment by denting demand for risk assets.

Fed Speakers in Focus

In the May 19 US session, Fed speakers will be in focus. Views on the labor market, inflation, and tariffs could give insights into the Fed’s interest rate outlook. Support for a Q3 2025 rate cut may boost demand for risk assets, while hawkish rhetoric could pressure rate-sensitive stocks.

While US labor market data has shown resilience, inflationary pressures have softened.

Beyond the data, trade headlines remain a key driver for risk appetite, especially for the DAX.

DAX Outlook: Trade and Central Banks to Dictate Trends

The DAX’s short-term outlook depends on several factors, including trade developments, economic data, corporate earnings, and central bank guidance.

• Bullish Case: Easing trade tensions, positive earnings, upbeat US data, and dovish central bank rhetoric could send the DAX toward the May 12 high of 23,912.
• Bearish Case: Rising trade friction, weak earnings, disappointing data, or hawkish central bank chatter could send the DAX toward 23,000.

As of Monday morning, the DAX futures were up by 7 points, while the Nasdaq 100 mini slid 252 points, suggesting a cautious start.

Technical Setup Suggests Cautious Optimism

After Friday’s gains, the DAX remains well above the 50-day and the 200-day Exponential Moving Averages (EMA), indicating bullish momentum.

• Upside Target: A break above the May 16 high of 23,887 would enable the bulls to target the record high of 23,912. Increasing buying pressure could signal a move toward 24,150.
• Downside risk: A break below 23,750 may bring 23,500 into play, with 23,000 as the next key support.

The 14-day Relative Strength Index (RSI) at 68.17 indicates the DAX has room to climb toward 23,912 before entering overbought territory (RSI > 70).

Conclusion: Monitor Macro Themes and Trade News

DAX traders should track trade headlines, key economic indicators, central bank comments, and earnings reports for market trends.

Explore our exclusive forecasts to see whether trade optimism can send the DAX to new highs. Click here to explore our latest DAX research, macro insights, and emerging market coverage.