It was a classic "fake-out" on the Frankfurt floor. The DAX started Tuesday with promising momentum, successfully breaching the psychologically significant 25,000-point mark in early trading. However, the celebration was short-lived. A sharp afternoon reversal sent the index into a tailspin, ultimately closing with a slight loss of 0.07% at 24,780.79 points. For now, the prestigious 25,000-level remains an unyielding fortress.
Nvidia and Microsoft Stall the Bulls
What triggered this sudden shift in sentiment? A glance across the Atlantic provides the answer. Despite a friendly start for US markets, tech titans Nvidia and Microsoft buckled significantly. This weakness in AI heavyweights correlated directly with the DAX's retreat, as the "risk-off" contagion spread. Within hours, the hard-earned gains of the morning were pulverized. Fears are now mounting that this correction could be a harbinger of a broader market slide.
Brenntag Finds a Floor – Scout24 Plummets
The DAX leaderboard on Tuesday was a study in contrasts. Scout24 was hit particularly hard, sliding by over 5% to take the "wooden spoon" as the day's worst performer. On the flip side, Brenntag shares sparkled with a 2.2% gain. The chemical distributor appears to be finally finding a bottom after weeks of turbulence. Nevertheless, the technical outlook remains cautious: a decisive breakout above the resistance at roughly €52 is still pending.
Yield Anomaly: Bunds Defy the ECB
Ahead of the upcoming ECB meeting, the bond market is producing some eyebrows-raising data. 30-year German Bund yields hit a record high—a development that runs counter to the general policy goals of the central bank in Frankfurt. It will be fascinating to see if Christine Lagarde addresses this phenomenon during her press conference tomorrow.
For today, Wednesday, expect continued volatility. With AMD shocking the semiconductor sector with a weak outlook, Infineon will be under the microscope. Furthermore, US labor market data this afternoon could provide the next major impulse—for better or worse.
Technical Summary: The bears sent a clear warning signal on Tuesday with what chartists call a "Shooting Star" formation. If the DAX fails to counter today, technical selling could easily accelerate.
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