After Friday's positive close, the start of the week brought disappointment for the DAX. The German blue-chip index failed to find any clear direction on Monday, resulting in a virtual break-even day. A barely noticeable gain of 0.02 percent saw the index close at 23,745.02 points. This left many investors frustrated after hoping for more momentum following the positive momentum from the end of last week. The DAX's search for direction continues into another week.
Could Weak Labor Data Boost Stocks? The Market's Hopeful Wager
Speculation this week will heavily focus on US labor market data. Market participants are clinging to the hope that a weakening labor market will force the Federal Reserve (Fed) to signal or implement another interest rate cut. The market logic is simple: a weak economy leads to fewer jobs, which translates to lower rates and, consequently, growth in equity markets. The market is already pricing in a high probability, over 87 percent, of another rate cut on October 29, 2025. However, investors are advised to closely monitor comments from Fed members to avoid disappointment, as the risk of an erratic market sell-off upon a letdown cannot be ruled out—a scenario that would likely affect the DAX as well.
Heidelberg Materials Under Fire: Is a Downtrend Looming?
Among individual stocks, Heidelberg Materials raised concerns, finishing at the bottom of the DAX list with a 2.4 percent loss. While a single down day isn't an alarm bell, the stock is approaching a critical technical support level. A break below this mark could easily initiate a sustained downtrend. Compounding the issue, Heidelberg Materials has come under political scrutiny due to rumors that a subsidiary is involved in settlement construction in Israeli-occupied Palestinian territories.
Turnaround Tuesday? Watching the Middle East Peace Plan
Following the short-term trading patterns of the DAX, a weak Monday could potentially be followed by a positive Tuesday. A possible catalyst could be the US peace plan for the Gaza Strip. The hope that German companies might participate in reconstruction efforts could inject fresh optimism and provide the DAX with the much-needed impulse to break its holding pattern.
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