Global Shockwaves: DAX Capitulates as Trump Swings the Tariff Hammer
It was the nightmare scenario many had feared: the announcement of new punitive tariffs by US President Donald Trump has triggered a massive wave of selling across global stock markets. On Tuesday, indices worldwide plummeted. After the DAX already started the week with a 1.3% loss, it shed another 1.6% on Tuesday. Closing at 24,702.12 points, the leading German index hit its lowest level since early January and is now heading dangerously fast toward the 24,000-point mark.
Geopolitical Orchestration: Greenland as the Tipping Point
It may sound unsettling, but Donald Trump is currently positioning himself as the relentless conductor of a geopolitical world orchestra. Under his leadership, the global order is being reshuffled: anyone who opposes US plans to acquire Greenland is being threatened with draconian tariffs.
Investors are well aware that tariffs are a double-edged sword. While the US uses them as leverage, it remains heavily dependent on imports. Should trading partners retaliate with counter-tariffs, a dangerous price spiral looms, potentially reigniting global inflation. While the ongoing World Economic Forum in Davos provides a platform for compromise, Trump’s strategy is a familiar one: the "carrot and stick" approach, applied persistently until he achieves his objective.
Technical Breakdown: Is a Drop to 20,000 Points on the Horizon?
From a technical perspective, the DAX is severely battered. There is currently no sign of a market bottom forming. Even short-lived recovery phases should not be over-interpreted in this environment. Market observers are already drawing comparisons to the "Tariff Chaos" of last April, when the index collapsed by over 18%.
If history repeats itself and diplomatic efforts in Davos fail, the DAX could potentially be pushed down toward the 20,000-point region. The current support level around 24,500 points acts as the final bastion before a deeper fall. Caution remains the top priority—the bottom is not yet in sight.
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