DAX still searching for direction as US economy remains resilient
The DAX remains trapped around the 25,000-point level as semiconductor profit-taking, Middle East uncertainty and a still-resilient US economy keep investors cautious ahead of another busy US data calendar.
Chief Market Analyst
Semiconductor profit-taking weighs on Asia
Profit-taking in the semiconductor sector continued across Asian equity markets today. Following the release of TSMC's official quarterly results, which largely confirmed the company's preliminary figures, investors were left with little new to digest.
Despite another quarter of strong revenue and earnings growth, scepticism persists over the sustainability of demand for AI-related infrastructure and data-centre investments as the semiconductor cycle moves into its later stages. That caution is also relevant for technology-sensitive benchmarks such as the Nasdaq 100, where expectations around AI infrastructure spending remain high.
US economy remains resilient
Geopolitical tensions in the Middle East remain elevated. Investors are closely monitoring the next steps taken by the United States in the region, with growing concern over the potential consequences for the global economy.
For now, however, the Federal Reserve's latest Beige Book continues to paint a constructive picture of the US economy. Eleven of the twelve Federal Reserve districts reported either moderate economic growth or signs of ongoing stabilisation, reinforcing the view that the US economy remains fundamentally resilient.
US data moves into focus
Attention now turns to a busy US macroeconomic calendar. Weekly jobless claims, retail sales and the Philadelphia Fed Manufacturing Index are all expected to provide further insight into the strength of domestic demand and economic activity.
The data may be particularly important because markets are trying to judge whether the US economy can continue to absorb higher geopolitical risk, elevated technology valuations and uncertainty over the next steps from the Federal Reserve.
DAX remains trapped around 25,000
From a technical perspective, the DAX is likely to remain confined to its narrow trading range between 24,900 and 25,150 points. The 25,000 level remains the key pivot for sentiment, with neither buyers nor sellers yet able to force a decisive break.
A sustained move away from 25,000, regardless of direction, would likely provide the catalyst for a more decisive market move. Until then, the index may continue to search for direction.
DAX oscillates around 25,000 as US earnings season gets underway
The DAX remains anchored around the 25,000-point level as Middle East risks, higher Brent crude prices and the start of US earnings season shape sentiment. Investors are also watching US inflation data, Federal Reserve testimony and Wednesday's Beige Book.
FTSE 100 trades lower at midday as rising oil prices fuel inflation concerns
The FTSE 100 is trading around 10,440 at midday as higher oil prices revive inflation concerns and keep investors cautious. Energy and commodity stocks are finding support, while weaker-than-expected UK retail-sales data is weighing on consumer names.
Brent oil extends rebound after holding key support
Brent crude has rebounded sharply from support around $70.50 and moved into the mid-$80s as geopolitical risk returns to energy markets. Momentum indicators have improved, but the market now needs to hold above the former $82.50 resistance area to keep the bullish setup intact.