Dax Index News: Trade Deal Buzz Fuels Bullish DAX Forecast Toward 23,500 Today

DAX Climbs on Trade Deal Buzz as Markets Eye US-EU Breakthrough Blueprint

A surge in trade optimism lifted the DAX on Thursday, May 8, as reports of a first major US trade deal reignited risk appetite. The index opened 0.68% higher at 23,274, with investors betting that a US-China trade thaw could pave the way for a broader US-EU agreement.

On Wednesday, May 7, US President Trump announced a press conference, stating:

“Big News Conference tomorrow morning at 10:00 A.M., The Oval Office, concerning a MAJOR TRADE DEAL WITH REPRESENTATIVES OF A BIG, AND HIGHLY RESPECTED, COUNTRY. THE FIRST OF MANY!!!”

A first trade agreement could form the blueprint for a US-EU deal, bolstering demand for German-listed stocks.

Markets shrugged off upbeat German trade and industrial production data. Pre-US tariff front-loading likely skewed the March numbers. German exports rose 1.1% in March after a 1.8% increase in February, while industrial production surged 3% (February: -1.3%).

Oliver Rakau, Chief Germany Economist and ECB Commentator at Oxford Economics, commented on March’s factory order numbers, stating:

“I am not too excited about the jump in German factory orders in March. Alternative core measures show that the jump in core orders is driven by just a few sectors like pharma. And this data predates liberation day of course.”

Sector Performance

Optimism toward a US-EU trade deal drove demand for auto stocks. BMW rose 1.29%, with Porsche and Volkswagen posting early gains. Mercedes-Benz Group was an outlier, tumbling 7.15% after cutting its dividend.

Amid ongoing tariff developments, corporate earnings may affect market trends. Rheinmetall, Siemens Energy, Infineon Technologies, and Heidelberg Materials released earnings reports on May 8.

Notably, Heidelberg Materials rose 2.78% after beating earnings forecasts. Siemens Energy rallied 3.86% after announcing tariffs were likely to have a limited impact.

US Markets Gain on AI News and Earnings

Wall Street posted gains in a choppy session on Wednesday, May 7, as investors weighed Fed Chair Powell’s press conference, AI developments, and earnings. The Dow rallied 0.70%, while the S&P 500 and the Nasdaq Composite Index gained 0.43% and 0.27%, respectively.

Fed Chair Powell warned about the potential impact of tariffs on inflation and the economy, while signaling a wait-and-see policy stance, weighing on risk assets.

However, US markets rebounded on reports of the Trump administration planning to lift AI chip curbs. Disney (DIS) shares jumped 10.76% after beating earnings estimates, contributing to the Dow’s gains.

US Labor Market in Focus

Later on May 8, the focus will shift to US labor market data. Economists forecast initial jobless claims to fall from 241k (week ending April 27) to 230k (week ending May 3). A lower reading would support Fed Chair Powell’s caution about cutting rates too early, potentially weighing on risk assets. Conversely, higher jobless claims may boost Fed rate cut bets and support risk appetite.

Other stats include Q1 2025 nonfarm productivity and unit labor costs. However, the numbers will likely play second fiddle to the jobless claims data.

Meanwhile, FOMC member commentary and trade-related headlines could further influence risk sentiment.

Near-Term Outlook

The DAX’s near-term outlook depends on economic indicators, trade headlines, and central bank cues.

• Bearish Scenario: Rising US-EU tensions, weak economic data, and hawkish central bank commentary could send the DAX below 23,000.
• Bullish Scenario: Hints of a US-EU trade deal, positive economic data, and dovish central bank guidance fuel a rally toward 23,500.

DAX Technical Indicators

Daily Chart

The DAX trades above the 50-day and 200-day Exponential Moving Averages (EMA), preserving a bullish trend despite two consecutive daily losses.

A breakout above 23,350 could open the door to the record high of 23,476, with 23,750 in sight on sustained momentum.

On the downside, a drop below 23,000 could enable the bears to target 22,750, with 22,500 the next support level.

The 14-day Relative Strength Index (RSI) at 64.49 suggests the DAX could climb toward 23,476 before entering overbought territory (RSI > 70).

Final Thoughts

With trade developments and central bank signals influencing risk appetite, volatility may linger. US-EU and US-China trade developments remain pivotal. Meanwhile, Germany’s fiscal support ambitions could provide some buffer against external headwinds.

As monetary policy signals, earnings updates, macro data, and geopolitical news continue to influence sentiment, traders should closely monitor technical and fundamental shifts.