DAX opens higher as AI earnings restore some optimism

After the recent market declines, investors are getting some much-needed relief from the technology sector. Better-than-expected quarterly earnings and an encouraging outlook for further AI investment have lifted sentiment on Wall Street and across Asian markets. Hopes are growing that the multibillion-dollar investment cycle in artificial intelligence remains intact despite the doubts that have emerged in recent weeks.

Results from Super Micro Computer support the view that demand for AI infrastructure remains strong for now. Meanwhile, Netflix's weaker-than-expected earnings have been overshadowed by renewed enthusiasm for technology stocks, even though its shares came under significant pressure in after-hours trading. Investors now have an initial reason to reconsider their recent scepticism towards the AI boom. However, this does not yet amount to a sustainable turnaround. Other companies will need to deliver convincing results and, above all, reassuring investment outlooks before confidence can be fully restored.

Elevated oil prices remain the biggest headwind for European equity markets. With Brent crude trading above $111 a barrel, rising energy costs are increasingly threatening to feed through into producer and consumer prices. Any confidence restored by positive technology earnings could quickly be eroded by renewed inflation fears. Today's UK inflation data are therefore likely to attract particular attention, especially as the rest of the economic calendar offers few potential catalysts.

The ongoing earnings season remains the decisive factor. Nearly 14% of S&P 500 companies are scheduled to report their quarterly results this week, while the reporting season in Germany will only gather momentum next week. At the same time, developments in the Middle East and their impact on energy prices remain a major source of uncertainty. From a technical perspective, the DAX is expected to trade within a range of 25,250 to 25,550 points today.