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.
Chief Market Analyst
Equities shrug off geopolitical risks
It is remarkable how global equity markets continue to shrug off geopolitical risks and push to fresh record highs.
Equity indices in Japan and South Korea extended their gains today, although an increasingly pronounced divergence is emerging between traditional technology stocks and the broader market.
AI demand supports technology stocks
Semiconductor and AI-related stocks were once again in strong demand after US companies CoreWeave and Super Micro Computer reported better-than-expected quarterly results after yesterday's closing bell.
Chinese equity markets, by contrast, moved lower as investors there placed greater emphasis on the risks associated with rising commodity prices.
Oil prices become a visible headwind
For Europe, the continued rise in oil prices is also becoming an increasingly visible headwind for inflation and, ultimately, consumer spending.
Investors face a choice between betting on geopolitical de-escalation and a subsequent decline in energy prices, or adopting a more cautious stance while continuing to ride the technology boom. For now, investor composure helped propel the DAX to another all-time high yesterday, highlighting the index's remarkable relative strength in the current environment.
US inflation data could reset rate expectations
Today's US consumer price data could take some of the shine off the bullish mood and bring interest-rate concerns back to the forefront.
US inflation most recently stood at 3.5% year-on-year, well above the Federal Reserve's 2% target. In Germany, consumer prices came in broadly in line with expectations, rising 2.9% year-on-year and 0.9% month-on-month.
German earnings round out the agenda
The earnings season will also provide a final round of corporate impulses in Germany today, with investors focusing on quarterly results from Hannover Re, TUI, Indus and Brenntag at the start of trading.
From a technical perspective, the DAX is expected to trade within a range of 26,250 to 26,500 points during today's session.
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.
DAX still searching for direction as Middle East talks remain uncertain
The DAX is still searching for direction as weaker US labour market data support risk appetite but Middle East talks remain fragile. Investors are also weighing higher oil prices, Japanese trade data and an earnings season that has so far remained broadly encouraging.