The start of the new trading week was reserved for the DAX. Although the leading index gained 0.64 percent to close at 23,239.18 points, investors were accompanied by strong uncertainty throughout the day. After reaching the intraday high shortly after the market opened, the price oscillated until closing. While the NASDAQ surged with a gain of 2.7 percent, this left both the Dow Jones and the DAX cold. Investors currently appear directionless without clear guardrails.
Fed Reversal: Weak US Data Fuels Massive Rate Hopes
Suddenly, markets have regained hope for another interest rate cut: the Fed Watch Tool currently indicates a probability of almost 81 percent for an imminent rate cut. This sudden shift is triggered by surprisingly weak US labor market data, fueling the market's expectation. Should this wave of rate optimism spill over into Europe, hopes for a DAX year-end rally could intensify again.
Bayer Soars to Annual High – Rheinmetall Suffers Under Peace Pressure
Bayer AG stock celebrated a "golden day" yesterday. Fueled by a pharmaceutical success, the stock shot up by 10.9 percent to a new annual high. Bayer is back in the game; the security ranks 5th in the 3-month performance ranking of all DAX stocks, with a yearly growth of 53.5 percent. Siemens Energy also recorded a value increase of 5.6 percent. In contrast, Rheinmetall stock had to carry the red lantern with a loss of 5 percent due to continued diplomatic pressure on Ukraine and Russia.
DAX Trapped: Freedom Only Possible via Resistance Break
Technically, the DAX remains trapped in the trading range established by the deep-red Thursday. To break free, the German stock index would have to sustainably exceed the high of this range on a daily closing basis. The resistances around the 20-day moving average could prove problematic on this path. The situation in the DAX remains critical, but it is not hopeless, especially if the potential rate effect from the US spills over into the European markets.
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