Dax Index News: Will Earnings and Trade Data Shift the DAX Forecast? Outlook Today

DAX Under Pressure Amid Trade Uncertainty

Overnight US trade developments capped the upside for European markets on Tuesday, May 6. The DAX opened the Tuesday session up 0.17% to 23,384. Uncertainty about the Fed’s policy outlook also limited early gains as Wednesday’s Fed interest rate decision and press conference loomed.

US President Trump proposed a 100% tariff on foreign-made films on May 5, signaling a readiness to escalate trade tensions. However, optimism about a US-China trade deal boosted risk sentiment during the Asian session, spilling into the European session.

Earnings in Focus

Amid tariff uncertainty, corporate earnings will influence market trends. MTU Aero, Continental AG, and Fresenius Medical Care are among the big names releasing earnings reports on May 6.

Continental AG rallied 2.77%, with Fresenius Medical Care gaining 2.09% after topping profit estimates, Meanwhile MTU Aero tumbled 3.06% after highlighting the potential impact of US tariffs on the aviation industry.

Meanwhile, auto stocks posted gains at the open. BMW and Porsche advanced 0.59% and 0.52%, with Mercedes-Benz Group and Volkswagen also in positive territory.

US Markets Drop on Trade Developments and Fed Rate Cut Doubts

US equity markets posted losses on Monday, May 5, amid falling bets on an H1 2025 Fed rate cut and Trump’s tariff announcement. The Dow and the S&P 500 dropped 0.24% and 0.64%, respectively, snapping nine-day winning streaks. Meanwhile, the Nasdaq Composite Index dropped 0.74%.

Trump’s 100% tariff proposal sparked risk aversion, sending gold prices higher. US economic data dampened bets on an H1 2025 Fed rate cut, also weighing on risk assets. The ISM Services PMI increased from 50.8 in March to 51.6 in April, beating a forecast of 50.6. April’s survey revealed a pickup in price pressures, raising concerns about inflation. Higher services inflation could lower expectations of Fed rate cuts as tariffs begin influencing economic data trends.

A higher-for-longer Fed rate path may increase borrowing costs, affecting corporate earnings and risk sentiment.

US Trade in Focus

Later today, US trade data will draw interest. Economists expect the US trade deficit to widen from $122.78 billion in February to $129 billion in March. A higher deficit could draw Trump’s attention, raising the risk of fresh tariffs. However, a lower reading may ease tariff risks, potentially boosting demand for risk assets such as German-listed stocks.

With US trade data in focus, investors should monitor trade headlines, crucial for market trends. Wall Street Journal Chief Economic Correspondent Nick Timiraos underscored the interplay between tariffs and Fed policy, stating:

“The Fed’s dilemma: Navigate a recession or a period of stagflation. The result: ‘This is not going to be a cycle where the Fed pre-emptively cuts because there’s a forecast of a slowdown. They’re going to actually need to see it in the tangible data’.”

Near-Term Outlook

The DAX’s near-term trajectory hinges on economic indicators, trade developments, and central bank guidance.

• Bearish Scenario: An escalation in US-EU trade tensions, weak economic data, and hawkish central bank commentary could send the DAX below 23,000.
• Bullish Scenario: Progress on a US-EU trade deal, upbeat economic data, and dovish central bank rhetoric could drive the DAX toward 23,500.

DAX Technical Indicators

Daily Chart

The DAX trades above the 50-day and 200-day Exponential Moving Averages (EMA), maintaining a bullish bias after a nine-day rally.

A breakout above the record high of 23,476 could open the door to 23,750, with 24,000 in sight on sustained momentum.

On the downside, a fall below 23,000 could bring 22,750 into play, with the next support at 22,500.

The 14-day Relative Strength Index (RSI) at 67.04 indicates the DAX could move toward 23,500 before entering overbought territory (RSI > 70).

Final Thoughts

With trade tensions and central bank signals influencing risk appetite, volatility is likely to persist. US-EU and US-China trade negotiations remain pivotal. At the same time, progress on Germany’s supportive fiscal policies could help counterbalance tariff headwinds.

Corporate earnings, ECB and Fed guidance, and US trade data will further influence sentiment, making vigilance crucial as traders navigate a fluid macro landscape.

With central bank communication and geopolitical headlines crucial to risk appetite, traders should stay alert to shifts in sentiment and technical trends.