FRANKFURT (dpa-AFX) - After a strong start to the year, the

Dax could continue its recent record-setting rally in the upcoming week. However, geopolitical risks may prompt increased caution. "Following the robust rally of recent weeks, the market is starting to take more deliberate steps," commented the experts at Index Radar. Investors are likely to pay close attention to inflation data from the United States. Additionally, US banks are already kicking off the next quarterly earnings season.

With a climb to a record high near 25,300 points on Friday, the Dax has so far continued its strong performance from 2025 into the still-young year. The German benchmark index is thus working on the so-called January effect, wrote capital markets expert Martin Utschneider from broker RoboMarkets. The assumption that stock prices perform above average in January is not a law of nature, he noted. Nevertheless, the Dax has established a short-term upward trend.

The main driver for prices remains hope for a revival of the German economy in 2026. Recent economic data has partly reinforced investors' belief that the economic downturn has been overcome, observed market analyst Andreas Lipkow. The defense industry plays a particularly important role in the overall economic picture.

On Thursday, the Federal Statistical Office will release a first estimate of Germany's gross domestic product for the previous year. Robert Greil, chief strategist at private bank Merck Finck, expects this to mark more or less the third consecutive year of stagnation for Germany. Thanks to high government investment in infrastructure and defense, however, "an economic output about one percent higher is at least realistic" for the new year, Greil said.

Geopolitical conflicts could, however, dampen investor sentiment at any time. Following the US attack on Venezuela, energy markets are especially in focus. The prospect of lower oil prices has recently overshadowed the associated risks. Now, according to Consorsbank's chief market analyst Jochen Stanzl, attention is also turning to protests in Iran, which remains an important oil producer despite all sanctions.

"Additionally, recent statements from Washington on the strategic significance of Greenland have caused irritation among European partners," commented Martin Zurek of Weberbank. "For capital markets, this means that political decisions will likely continue to have a short-term impact on commodity prices, trade flows, and market volatility."

Even beyond these conflicts, investors are looking to the US: Fresh consumer price data is on the agenda Tuesday, which—along with the already-published labor market report—is also likely to influence the future monetary policy of the US Federal Reserve.

The mixed job data played into investors' hands ahead of the weekend. It increased pressure on the Fed to cut interest rates more quickly to support the economy, which would also mean more favorable financing costs for companies, explained analyst Frank Sohlleder from broker ActivTrades.

On top of that, US banks are giving the starting signal for earnings season. Over the course of the week, JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley will all present quarterly figures. "Since the revenues of the ten largest investment banks once again exceeded 100 billion US dollars in 2025, the pressure here is especially high," wrote Hans-Jakob Frey from LBBW.

In Germany, food group Südzucker will also present figures for the third fiscal quarter on Tuesday. In addition, on Monday, delivery figures for the previous year will be released by both carmaker Volkswagen and aircraft manufacturer Airbus. On Friday, airport operator Fraport will finally report passenger numbers for 2025./niw/bek/mis

--- By Nicklas Wolf, dpa-AFX ---