Market report: DAX likely to fall back at the end of the week

Losses Expected — DAX Set to Fall Back at Week's End

At least the start of trading looks set to be bumpy for the DAX today. Falling oil prices should actually provide support. Signals from the US and Asia are also strong — but uncertainty remains high.

Yesterday, the DAX closed trading up 0.7 percent at 25,716 points. Falling oil prices had generated a positive mood. The US Federal Reserve's interest rate hike was received calmly. "Investors found it reassuring that the Fed stood firm in the face of Donald Trump's loud calls for lower interest rates, which strengthens the Fed's credibility," said Susannah Streeter, Chief Investment Strategist at Wealth Club.

From the commodities market, there are at least no further negative signals at present. Hopes of alternative supply routes for oil from the Middle East are providing slight relief, with oil prices falling for the third consecutive time. The North Sea crude grade Brent fell 0.8 percent to $103.94 per barrel (159 litres). US oil WTI was trading 0.7 percent weaker at $101.15.

However, the question arises as to what significance should still be attributed to movements in the oil market. US major bank JP Morgan says it no longer has a clear forecast for oil markets for the first time since the start of the Iran war.

"We simply don't know how to model the outcome," the bank's analysts wrote in a study. Six months after the conflict began, many economic red lines had been crossed with no solution in sight.

Signals from Asia and the US are positive. Easing oil prices and robust labour market data had given Wall Street a boost. Investors bought heavily into technology stocks in particular. The Dow Jones index of blue-chip stocks closed 0.6 percent higher at 51,778 points. The broader S&P 500 advanced 1.1 percent to 7,638 points. The Nasdaq technology exchange index gained 1.7 percent to 26,418 points.

In Asia, the Nikkei is currently up nearly two percent. The recovery in technology stocks is also pulling Japan's benchmark index higher. The focus of attention was the Bank of Japan (BOJ), which raised its key interest rate as expected to a 31-year high of 1.25 percent. "What is crucial for markets is not only whether the BOJ raises rates, but also how it does so and how Governor Kazuo Ueda communicates the path forward," said MUFG currency strategist Michael Wan.

Growth prospects are brightening, according to the Federation of German Industries. The BDI is raising its growth forecast for the current year. The German economy is expected to grow by one percent this year. The BDI had previously forecast growth of 0.6 percent. Economic research institutes had also recently raised their expectations for 2026, though they were more optimistic than the BDI now is.

The BDI points out that growth would be driven primarily by government spending — that is, investment in infrastructure and defence. Private investment, by contrast, remains weak.