DAX rallies on Middle East ceasefire hopes as oil prices retreat

DAX moves back above 25,000

Renewed hopes for a ceasefire in the Middle East have lifted equity markets at the start of the new trading week, pushing the DAX comfortably back above the 25,000-point mark.

Lower oil prices lift risk appetite

Sentiment had already improved across Asian markets overnight as the absence of further US military strikes against Iran over the weekend encouraged investors to return to risk assets.

The primary catalyst was a sharp decline in oil prices, with Brent crude falling by more than 5%. The retreat in energy prices has eased concerns over inflation and, in turn, reduced pressure on central banks to tighten monetary policy further.

Semiconductors lead gains in Asia

Technology and semiconductor stocks once again led gains in both China and Japan. The spectacular stock market debut of Chinese memory chipmaker CXMT, whose shares surged by more than 500% on their first day of trading, highlighted the continued enthusiasm surrounding the semiconductor sector.

Ceasefire durability remains key

For the DAX, lower energy prices are expected to provide the key catalyst for today's advance above the psychologically important 25,000-point threshold.

Whether this move develops into a sustained breakout will largely depend on the durability of the latest ceasefire and whether diplomatic negotiations in the Middle East produce tangible progress.

Precious metals also move higher

Precious metals have also responded positively to the latest geopolitical developments, with both gold and silver posting solid gains at the start of the week as investors continue to balance improving risk sentiment with ongoing demand for safe-haven assets.

Fed and tech earnings dominate the week ahead

The week ahead promises to be a pivotal one for financial markets. Alongside the Federal Reserve's policy meeting, earnings reports from major US technology companies including Meta, Microsoft, Amazon, and Apple will dominate investor attention.

In Germany, Mercedes-Benz is among the companies scheduled to report quarterly results and provide updated guidance. Today's economic calendar also features Germany's IFO Business Climate Index and US durable goods orders, both of which should offer fresh insights into the strength of the global economy.

From a technical perspective, the DAX is expected to trade within a range of 25,250 to 25,500 points during today's session.