While the DAX was able to recover on Tuesday, it took a sharp turn downward again on Wednesday. Before the index could even approach its record high, investors and traders took profits, sending the index significantly into the red. The DAX closed Wednesday with a loss of over 1.17%, well below the 23,000 mark, at 22,839 points.
In addition to the ongoing uncertainty surrounding the U.S. government's stance on tariffs, investors are lacking positive catalysts that would restore confidence in the market's ability to continue rising. "Uncertainty" is perhaps the word that best describes the current situation. As such, it can be expected that in the coming trading days, the only reliable aspect of the index may be its volatility.
While Rheinmetall shares gained over 2.5% during yesterday's session, stocks like Sartorius, Infineon, and SAP took a hit. The drop in SAP shares, down more than 3.3%, particularly weighed on the index. As a heavyweight in the DAX and the most valuable company in Europe, SAP has a significant impact on the overall index performance.
DAX Possibly Facing a Significant Correction
From a technical standpoint, after yesterday’s trading session, there are growing concerns that the DAX may be entering a larger correction phase, especially after falling below the previous day’s low. In the short term, the index again closed below the 20-day moving average, raising the likelihood of a drop toward 22,200 points. If this support level does not hold, the next level of support is expected at 22,000 points. Should this level also fail to hold, investors may need to start considering the possibility of a medium-term correction for the first time since August 2024.
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