DAX Index Forecast: Fresh Record This Week on Soft Inflation, Rate Cut Hopes, and Ukraine Optimism?
After stumbling in April and facing turbulence in early August, German equities have staged a remarkable rebound, with the DAX index pushing
Quick overview
- German equities have rebounded significantly, with the DAX index reaching record levels due to stronger corporate earnings and dovish monetary signals.
- The DAX PERFORMANCE-INDEX closed the week at 24,359.30, reflecting renewed investor confidence after a volatile start to August caused by trade tensions.
- Lower borrowing costs and declining bond yields have shifted investor preference back to equities, supporting demand for DAX-listed shares.
- Geopolitical optimism following a constructive Trump–Putin meeting has further bolstered market sentiment, positioning German equities for potential new highs.
Live DAX Chart
After stumbling in April and facing turbulence in early August, German equities have staged a remarkable rebound, with the DAX index pushing to fresh record levels on the back of stronger corporate earnings, dovish monetary signals, and easing geopolitical concerns.
Market Recovery and Economic Drivers
The DAX PERFORMANCE-INDEX climbed 153 points, or 0.63%, closing the week at 24,359.30, reaffirming investor confidence after a volatile start to August. That earlier selloff was largely triggered by the implementation of new tariffs on August 1, heightened trade friction, and political unease that briefly soured sentiment.
Support soon re-emerged, however, as German wholesale and inflation figures came in softer than expected, bolstering expectations of a more accommodative stance from the European Central Bank. Investors now anticipate further policy support, with markets already pricing in two rate cuts from the U.S. Federal Reserve in 2025 and holding strong conviction in a September move.
Central Bank Policy and Investor Appetite
The ECB has already cut rates several times this year, bringing the official cash rate down to 2%. Lower borrowing costs and declining bond yields have shifted the balance back toward equities, keeping demand for DAX-listed shares strong.
From a technical perspective, the index had dipped below its 50-week SMA in April, but it managed to regain momentum as the 20-week SMA held firm as support. By August, the recovery had gathered pace, and the benchmark now hovers just shy of its record peak at 24,550 points, a level that could be tested in the coming sessions.
Technical Outlook and Market Sentiment
Geopolitical Tailwinds
Investor confidence also drew strength from the weekend’s Trump–Putin meeting, which ended on a constructive note. U.S. President Donald Trump’s comment that there is “a very good chance of getting peace in Ukraine” injected a dose of optimism into global markets, helping to reduce geopolitical risk premiums that had weighed on European equities earlier this summer.
Outlook: While risks remain from trade disputes and political maneuvering, the DAX’s upward momentum is firmly supported by a combination of dovish central bank policy, resilient earnings, and easing inflation pressures. Should external risks continue to moderate, German equities appear well-positioned to extend their advance and set fresh highs in the weeks ahead.
German Stock Index DAX 40 Live Chart
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