FRANKFURT (dpa-AFX) - The stabilization of the DAX is expected to continue at the start of the week. Broker IG valued the German benchmark index 0.3 percent higher at 24,793 points, about two and a half hours before the regular Xetra opening. On Thursday, the DAX barely held on to its yearly low at nearly 24,272 points. Ultimately, however, it managed to defend the 50-day moving average, which is considered a medium-term trend indicator.
The DAX is also being buoyed by the strong recovery of major US indices. The Dow Jones Industrial reached its latest record high as early as Friday afternoon, but extended its gains significantly after European markets closed. The Nasdaq 100, a tech-heavy selection index recently rattled by AI-related concerns, also stabilized. However, it still remains below its recently breached 100-day moving average—a gauge for the longer-term trend.
On Wednesday and Friday, the US will publish labor market and inflation data, which investors will scrutinize for fresh signals on the course of the US Federal Reserve. The market currently expects the Fed to cut key interest rates twice in 2026, aiming to make investments and loans cheaper and thereby stimulate the economy. As long as wage growth, employment, or price developments do not send overly negative signals, the interest rate path is unlikely to be questioned. Should economic data deliver positive surprises, it could further reinforce expectations of rate cuts.
Positive signals are also coming from Japan. There, the benchmark index surged by up to nearly six percent to a record high following the resounding election victory of Prime Minister Sanae Takaichi's ruling party./ag/zb
