The DAX is expected to open Thursday's session at around 25,200 points. Investor nervousness is increasingly spilling over into selling pressure after higher-than-expected US consumer price index (CPI) figures added to an already tense market environment. Fears of interest rate rises, growing doubts about the AI-driven rally and persistent tensions in the Middle East have created a difficult combination for equity markets.
Even convincing quarterly results are barely enough to turn sentiment around. Better-than-expected earnings from Taiwanese semiconductor giant TSMC failed to generate sustained buying interest. Instead, investors appear to be using opportunities to reduce their exposure to the technology sector. When good news no longer attracts buyers but is instead used as an opportunity to exit positions, it is a warning signal for the broader market.
Investors are also becoming increasingly unforgiving of disappointments in the banking sector. Bank of America's weaker-than-expected results were met with substantial share price losses. The earnings season is therefore revealing an uncomfortable asymmetry: strong results are barely rewarded, while disappointing figures are punished all the more severely.
Today's US economic calendar could add further volatility. Labour market data, producer prices and retail sales figures are all due for release. Following the latest inflation shock, investors will be watching particularly closely for signs that price pressures are becoming more entrenched, potentially forcing the Federal Reserve to adopt an even more restrictive monetary policy stance.
