DAX Index Today: Earnings and PMIs Set the Stage for Next Market Moves

The Overview of the DAX Performance

The DAX fell by 0.25% on Wednesday (May 22). Following a 0.22% loss on Tuesday (May 21), the DAX ended the session at 18,680.

US Housing Sector Data and Fed Jitters

On Wednesday (May 22), US housing sector data drew investor interest. Existing home sales declined by 1.9% in April after sliding by 3.7% in March. Economists expected a 0.5% increase. The markets consider the US housing sector a litmus test of the US economy. The weaker-than-expected numbers could impact consumer confidence and spending.

Investor jitters about the FOMC Meeting Minutes also pressured buyer appetite for riskier assets. The Fed released the FOMC Meeting Minutes after the European closing bell. Significantly, the Minutes showed that Fed members remained willing to hike rates to bring inflation to the 2% target.

The more hawkish-than-expected FOMC Meeting Minutes impacted buyer demand for riskier assets.

On Wednesday (May 22), the Dow declined by 0.51%. The Nasdaq Composite Index and S&P 500 saw losses of 0.18% and 0.27%, respectively.

However, the earnings results from NVIDIA (NVDA) impressed after the US market close. While down 0.49% during regular trading hours, NVDA rallied 6.71% in after-hours trading, ending the session at $1,012.86.

The Wednesday Market Movers

Infineon Technologies rallied 3.74% as investors awaited the earnings results from NVIDIA.

However, auto stocks suffered as the markets reacted to suggestions of China hiking gasoline-power car tariffs.

BMW and Porsche declined by 1.71% and 1.64%, respectively, with Mercedes Benz Group falling by 1.57%. Volkswagen fell by 0.63%.

Private Sector PMIs for May in Focus

Preliminary private sector PMI numbers for Germany and the Eurozone will warrant investor attention on Thursday (May 23).

Economists forecast the German Manufacturing PMI to increase from 42.5 to 43.1 in May. Furthermore, economists expect the German Services PMI to rise from 53.2 to 53.5.

Economists forecast the Eurozone Manufacturing PMI to increase from 45.7 to 46.2. Moreover, economists predict the Services PMI to rise from 53.3 to 53.5.

Better-than-expected numbers could test investor bets on post-June ECB rate hikes. However, investors should consider the sub-components, including prices, new orders, and employment. Higher prices would likely attract the ECB’s attention.

Beyond the numbers, investors should monitor any ECB reaction to the PMI numbers.

US Economic Calendar: US Jobless Claims and the Services PMI

Later in the Thursday session, US jobless claims and Services PMI numbers also need consideration. Tighter labor market conditions and a pickup in US service sector activity could fuel speculation about a Fed rate hike.

Economists forecast initial jobless claims to fall from 222k to 220k in the week ending May 18. Moreover, economists expect the US Services PMI to remain steady at 51.3 in May.

Near-Term Outlook

Near-term trends for the DAX will hinge on the private sector PMI numbers and central bank commentary. Better-than-expected PMI numbers for Germany, the Eurozone, and the US could temper expectations of ECB and Fed rate cuts. More hawkish rate paths could impact buyer demand for DAX-listed stocks.

On the Futures markets, the DAX and the Nasdaq mini were up 33 and 177 points, respectively.

DAX Technical Indicators

Daily Chart

The DAX sat comfortably above the 50-day and 200-day EMAs, affirming the bullish price signals.

A DAX breakout from the 18,750 handle could give the bulls a run at the May 15 all-time high (18,893). A DAX return to the all-time high could signal a move toward the 20,000 handle.

Private sector PMIs, US labor market data, and central bank commentary need investor consideration.

However, a DAX drop below the 18,650 handle could give the bears a run at the 18,500 handle.

The 14-day RSI at 60.43 indicates a return to the May 15 all-time high before entering overbought territory.

4-Hourly Chart

The DAX hovered above the 50-day and 200-day EMAs, confirming the bullish price signals.

A DAX return to the 18,800 handle could support a move to the all-time high (18,893).

Conversely, a DAX break below the 18,650 handle could bring the 18,500 handle into play.

The 14-period 4-hour RSI at 51.52 indicates a DAX move to the May 15 all-time high before entering overbought territory.