FRANKFURT (DEUTSCHE-BOERSE AG) - Following a robust performance in May, stock markets are entering the new month with optimism. The conflict in Iran remains a focal point. However, markets are also buoyed by a successful earnings season, lower interest rates, and the ongoing AI euphoria.
June 1, 2026. FRANKFURT (Deutsche Börse). Equity markets concluded May with significant gains. The DAX (DE0008469008) rose by 0.9 percent last week, while the Stoxx Europe 600 (EU0009658202) posted a 0.1 percent gain. On Wall Street, gains were even more pronounced, with the S&P 500 up 1.4 percent and the Nasdaq 100 climbing 2.9 percent. Monthly performance was also highly positive across the board. In May, the DAX achieved a 3.3 percent gain, the Stoxx Europe 600 rose 2.4 percent, while the S&P 500 and Nasdaq 100 surged 5.1 percent and 10.5 percent, respectively.
Iran remains the short-term catalyst
For the coming week, the war in Iran continues to be a primary market driver. Commerzbank strategists note that a framework agreement between the US and Iran recently appeared 'within reach'. The market seems to have partially priced in this scenario, evidenced by falling oil prices, lower inflation expectations, and declining bond yields. Although the hoped-for breakthrough did not materialize over the weekend and oil prices have ticked slightly higher, the DAX is trading slightly up on Monday morning at 25,123 points, after closing at 25,105 points on Friday.
Strong corporate earnings provide support
In addition to hopes for a swift resolution in Iran, the successful reporting season and the AI boom are cited as reasons for the new highs on US exchanges. The DAX has at least approached its previous peak. Markus Reinwand of Helaba attributes the divergence between major indices primarily to sector composition, with technology and telecommunications driving recent performance. Within the S&P 500 technology sector, over 90 percent of companies surprised to the upside despite high expectations. This earnings growth has compressed valuations, though Helaba notes that stocks are not necessarily cheap. However, Reinwand considers talk of a bubble to be premature at this stage.
A summer of correction risks
Following recent gains, a market breather would not be unusual. Commerzbank points to initial outflows from global equity funds and simultaneous inflows into bond funds. This could suggest that equities might benefit less from a potential Iran deal than fixed-income markets.
Robert Halver of Baader Bank also sees room for increased volatility. In his view, net speculative long positions in the US equity market indicate rising risk appetite. Consequently, the lower-volume summer period could become more volatile, particularly in response to new geopolitical or monetary policy developments. At the same time, Halver does not see the markets in a state of irrational exuberance.
Jensen Huang to speak in Taiwan
This Monday, investors are also turning their attention to Taiwan. One day before the official opening of the Computex technology fair, Nvidia CEO Jensen Huang is scheduled to deliver a speech. Last week, the Taiwan-born founder of the world's largest chipmaker announced annual investments of 150 billion US dollars in the region, which he described as the 'epicenter of the AI revolution'.
Chart technician sees new record highs for the DAX
From a technical analysis perspective, the relative weakness of European indices compared to US markets is striking. Marcel Mußler highlights a divergence within Germany: 'While the DAX took a breather, it was a party week for the MDAX and SDAX,' he says, describing recent market action. Nevertheless, he remains confident for the German blue-chip index: 'We will also see its upside breakout.' The DAX needs a further rise of about 400 points to reach a new all-time high. Once achieved, the path would be clear toward the new upward trend channel established since March, currently situated at 26,700 points.
Key economic and financial events of the week
Monday, June 1
4:00 PM. USA: ISM Manufacturing PMI. The index is expected to have risen slightly in May, indicating a more robust industrial climate. Deutsche Bank forecasts 53.2 points following 52.7 in April; Commerzbank also anticipates further improvement.
Tuesday, June 2
11:00 AM. Eurozone: Inflation data. For the ECB, the core rate (excluding energy and food) is the primary focus. Deka and Commerzbank expect an increase from 2.2 to 2.4 percent. Headline inflation is also expected to be higher; Deka forecasts 3.2 percent, citing renewed price pressure in the tourism sector following the early Easter holidays.
Taiwan: Start of the Computex technology fair. Running through Friday under the theme 'AI Together', the fair focuses heavily on Artificial Intelligence, computing, next-gen technologies, robotics, and mobility. With 1,500 exhibitors, Computex reaches a new record this year.
Wednesday, June 3
4:00 PM. USA: ISM Services PMI. Following 53.6 points in April, a virtually unchanged reading is expected. A figure well above 50 would continue to signal growth in the services sector. Commerzbank views this as a sign of a persistently solid US economy.
8:00 PM. USA: Federal Reserve Economic Report. The Beige Book provides a current assessment of regional economic developments in the US. For markets, the key question is whether companies continue to report price pressures and whether the labor market shows initial signs of cooling.
After 10:00 PM: Publication of index adjustments for the DAX, MDAX, SDAX, etc.
Friday, June 5
2:30 PM. USA: Non-farm payrolls. Following strong previous months, job growth is expected to have slowed. Deutsche Bank is particularly cautious with a forecast of 65,000 new jobs, while Helaba and Commerzbank each expect 100,000. Deka points to positive one-off effects in previous months that are now likely to fade. Commerzbank sees little room for renewed rate cut expectations for the June Fed meeting, even with a weaker report. The unemployment rate is expected to remain unchanged at 4.3 percent, with wage growth of 0.3 percent month-on-month.
By Thomas Koch, June 1, 2026, © Deutsche Börse AG
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