DAX seen opening slightly lower as Fed keeps rate hike option alive

Fed keeps tightening option alive

The DAX is expected to open modestly lower after the Federal Reserve left interest rates unchanged but stopped short of ruling out further monetary tightening.

While policymakers kept the federal funds rate on hold, they reiterated that inflation remains under close scrutiny and warned that higher energy prices continue to pose upside risks to the inflation outlook. The 9–3 voting split against a rate hike also attracted attention, highlighting that the prospect of a more restrictive policy stance in the coming months remains firmly on the table.

Meta and Microsoft deliver mixed signals

Corporate earnings painted a mixed picture overnight. Meta Platforms and Microsoft delivered sharply contrasting results.

At Meta, soaring investment and operating costs weighed on profitability as the company continues to aggressively expand its AI capabilities regardless of expense. Investors responded negatively to the elevated spending trajectory.

By contrast, Microsoft impressed with another strong performance in its cloud business, providing reassurance to investors who had become increasingly cautious in recent weeks. Similar to SAP, the software giant appears to have overcome an overly pessimistic market narrative.

Asian markets show signs of stabilisation

Asian equity markets showed early signs of stabilisation in response.

Strong quarterly results from Samsung Electronics also supported sentiment across South Korea and Japan, helping technology shares recover after recent weakness.

Airbus results meet expectations

In Germany, Airbus attracted attention following the release of solid quarterly figures.

While the results met expectations, they failed to provide a meaningful upside surprise, prompting some investors to lock in profits after the stock's strong run-up ahead of the announcement.

BoE decision and US data dominate the agenda

Today's trading session promises to be particularly eventful. Alongside the Bank of England's interest rate decision, investors will digest a broad range of macroeconomic releases, including Eurozone GDP, German consumer price inflation, and US labour market data.

In the United States, both the core PCE price index, the Fed's preferred inflation gauge, and second-quarter GDP will be published. After the US market closes, attention will shift to earnings from Apple and Amazon, which could provide further direction for global equity markets.

DAX expected to trade between 25,100 and 25,500

From a technical perspective, the DAX is expected to trade within a range of 25,100 to 25,500 points during today's session.