DAX record run triggers vertigo as profit-taking sets in
The DAX continues to benefit from global risk appetite and the strength of semiconductor and AI stocks, but repeated record highs are beginning to trigger profit-taking. Investors are watching US labour market data and producer prices for signs that higher input costs are still being absorbed by companies rather than passed on to consumers.
Chief Market Analyst
Investors bet inflation pressure can be absorbed
Sentiment across global equity markets remains positive. Investors are betting that higher energy prices will not translate into a renewed inflationary spiral, but will instead be largely absorbed by companies.
That would allow the economic recovery to continue as consumers gradually regain their appetite to spend.
AI and semiconductor stocks drive the rally
Recent quarterly results from numerous companies in the United States and Europe support this view. For now, however, semiconductor and AI stocks remain the main drivers of the current rally.
The exceptionally strong momentum in these sectors is generating significant revenue and earnings growth across industries directly exposed to the AI investment boom. Amid all the enthusiasm, however, investors should not lose sight of the fact that every cycle eventually comes to an end, particularly as a number of self-reinforcing effects are currently emerging through cross-holdings and interconnected business relationships.
DAX rally begins to trigger vertigo
The spillover from soaring US technology stocks and elevated valuations is providing fresh momentum for German equities, repeatedly pushing the DAX to new record highs.
At these levels, however, some investors are beginning to suffer from a degree of vertigo. With few fresh positive catalysts available, profit-taking is starting to set in.
US labour market and producer prices in focus
Today's focus will be primarily on US labour market data and producer prices. Following yesterday's consumer inflation figures, which were broadly in line with expectations but remained above the Federal Reserve's 2% target, investors will now be looking for evidence that companies are indeed continuing to absorb higher input costs rather than passing them on.
However, the latest renewed increase in energy prices is too recent to be fully reflected in today's data.
DAX expected to stay near record territory
From a technical perspective, the DAX is expected to trade within a range of 26,250 to 26,550 points during today's session.
DAX quietly extends record run as US inflation data could set the tone
The DAX pushed to another all-time high as investors continued to look past geopolitical risks and rising oil prices. Strong demand for AI and semiconductor stocks is helping sustain risk appetite, but today's US consumer price data could revive interest-rate concerns and set the tone for the next market move.
DAX keeps record high in sight as investors avoid profit-taking
The DAX remains within reach of its record high just below 26,450 points as investors continue to bet on an extension of the rally that began at the start of August. Geopolitical risks around Iran and the Strait of Hormuz are still having little impact, while AI enthusiasm, hopes of a European recovery and tomorrow's US inflation data remain in focus.
DAX starts the week quietly as policy and geopolitics stay in focus
The DAX traded in a narrow range of just over 100 points on Monday as investors slipped back into summer mode after the index's recent record-breaking run. Attention remains focused on the Iran conflict, energy prices and monetary policy, while AI stocks, precious metals and rare earths continue to attract selective interest.