DAX retreats below 25,000 as Apple rekindles inflation concerns

Yesterday’s euphoria has quickly given way to renewed caution. The same enthusiasm that followed Micron Technology’s blockbuster earnings has faded just as rapidly, with investors once again taking profits in technology stocks.

Apple’s announcement of price increases has hit the market at its most vulnerable point: inflation. Higher semiconductor costs will force the company to raise prices for Macs and iPads for the first time without introducing new product generations. It is a clear reminder that someone ultimately has to pay for the AI investment boom. Many investors appear to be waking up to the reality that those costs are likely to be passed on to consumers, who are already under pressure. As a result, semiconductor prices are increasingly replacing energy costs as the market's primary inflation concern.

Against this backdrop, Japan’s latest inflation figures also failed to reassure investors. While headline data broadly met expectations, underlying price pressures remain stubborn in several categories, reinforcing expectations that the Bank of Japan may need to continue tightening monetary policy. The broader macroeconomic picture prompted another round of profit-taking across Asian equity markets, particularly in semiconductor and AI-related stocks.

The DAX is unlikely to be affected as severely given its relatively limited technology weighting, but investors in Europe will nevertheless keep a close eye on inflation developments. The already fragile consumer environment is facing another important test. Trading in Frankfurt is therefore likely to remain subdued, with sideways price action the most probable scenario. Ahead of the weekend, further profit-taking is also likely to remain on the agenda.

From a technical perspective, the DAX is expected to trade within a range of 24,650 to 24,900 points, while the 25,000threshold is likely to remain out of reach for the time being.