The DAX began the week with slight losses, underscoring investors' cautious stance. The leading index closed down 0.34 percent at 24,081.34 points. Market participants are still proceeding with caution, basing their decisions on the next potential impulses from both geopolitical and economic fronts.
Uncertainty persists regarding the peace efforts in Ukraine. Europe feels obviously sidelined by the US in these negotiations. At the same time, the economic impact of the increased tariffs remains unclear, as they only recently took effect. It's therefore unlikely, if not impossible, to see any data points related to these inflationary developments just yet.
The Fed's Dilemma: Is a Rate Cut Just a Hope?
This time lag raises the question of whether the Federal Reserve will continue its wait-and-see approach. While equity markets are pricing in a September rate cut, this might prove to be a mistake.
Among individual stocks, Commerzbank shares were once again in demand, rising 3.9 percent by the end of trading and reaffirming their strong uptrend. Siemens Energy also had an excellent start to the week with a 3.7 percent price increase, while Deutsche Telekom rounded out the top three with a 1.6 percent gain.
DAX at a Crossroads: Which Way Will the Breakout Go?
The signs for cautious trading are unmistakable. On the positive side, the DAX is holding above its 20-day moving average, giving it an excellent starting position to attack previous highs. A sustainable break above those levels could encourage investors and make a further price increase more likely. However, a drop below the average is also possible at any time, which would raise the question of whether it is just a brief dip in search of buyers or a sign of a corrective move by market participants.
Can the DAX use its positive starting position to break out to the upside?
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