DAX resumes record chase as fear and greed switch places in rapid succession

The DAX is expected to open today's trading session at around 26,570 points, putting its previous record highs firmly back within reach. The outlook for German blue-chip stocks remains promising. Positive cues from Asian markets and hopes of a further easing of tensions in the Middle East are sustaining buying interest. Following the strong recovery of recent trading sessions, investors appear increasingly willing to take on greater risks. The bulls have regained control of the market, and within just a few days, last week's fear has given way to greed: the pursuit of higher returns.

Diplomatic hopes support market sentiment

Geopolitical developments, in particular, are currently providing important arguments in favour of rising equity prices. The US appears to have ruled out further military action against Iran for the time being. Instead, diplomatic efforts are moving to the forefront, although negotiations are likely to remain difficult and protracted. For financial markets, the mere prospect of de-escalation is already providing considerable relief. Declining geopolitical risk premiums and the resulting easing of tensions in energy markets are reducing inflation concerns while simultaneously improving the outlook for businesses and consumers. Hopes of peace are increasingly becoming a major driving force behind the equity market rally.

Infineon impresses as Henkel faces mixed conditions

Alongside geopolitics, the ongoing earnings season is once again moving into sharper focus. Infineon and Henkel, two major DAX constituents, are reporting their quarterly results today. Infineon has exceeded analysts' expectations, reinforcing its position as one of the potential beneficiaries of the global artificial intelligence (AI) investment boom. This could help push recent doubts about the technology sector's growth momentum further into the background. At Henkel, however, the picture is more mixed. Like other companies in the consumer goods sector, the group is struggling with a challenging market environment in which positive developments are being offset by persistent headwinds.

US inflation data could test the recovery

On the economic front, attention today will focus particularly on US consumer price data and the weekly ADP employment figures. Following the surprisingly robust labour market data released recently, inflation developments are likely to be scrutinised especially closely. Easing price pressures could reinforce hopes of a less restrictive monetary policy stance. Conversely, should the figures point to renewed inflation risks, concerns about further interest rate hikes could quickly resurface. For highly valued technology stocks in particular, the direction of interest rates remains a decisive factor.