(Headline and text updated following weekend events)

FRANKFURT (dpa-AFX) - The US punitive tariffs announced on Saturday against Germany and other European states could at least temporarily dampen the current investor enthusiasm. The indication for the DAX calculated by IG Markets fell below the psychologically important 25,000-point mark on Sunday evening. Only a few days earlier, the DAX had reached a record high of 25,508 points. Just a day before the tariff threats, experts had expressed cautious optimism about the prospects for the German stock market.

The background is the dispute over Greenland. Trump wants to annex the Arctic island, which belongs to Denmark, to the United States, and announced additional tariffs against Germany, Denmark, Finland, France, the Netherlands, Norway, Sweden, and the United Kingdom to push through his plan. According to Trump on his platform Truth Social, the US tariffs are to remain in place until an agreement is reached on the complete purchase of the Arctic island. Starting February 1, a 10 percent tariff will be imposed on goods sent to the US, rising to 25 percent from June 1.

At the start of the week, significantly fewer foreign investors are likely to participate on Monday. Due to "Martin Luther King Day," US stock exchanges will be closed. Given the possibility of market-moving headlines over a long weekend, this carries a certain risk, the experts from Index Radar presciently wrote on Friday: "Markets like breaks, but usually do not like surprises."

Recently, geopolitical risks have played only a minor role on the stock exchange. "Discussions about a possible US annexation of Greenland and the looming US intervention in Iran have so far been largely ignored," noted analyst Frank Sohlleder from the broker Activtrades, also on Friday. However, as the question arises whether serious political or even military escalations have been priced into the markets, a rude awakening could be in store.

According to expert Uwe Streich from Landesbank Baden-Württemberg, the currently high valuations are apparently still not enough to halt the rally. However, he sees a number of additional risks: "US President Donald Trump is working on a new world order, the AI story is showing its first cracks, and the US Federal Reserve is at risk of losing its independence." Looking back at the past three strong years in the DAX, investors feel safe and are underestimating the risks.

Investors' attention is likely to shift initially from the corporate world, which usually receives special attention during earnings season, to political developments. An EU special summit is being considered, possibly as an online meeting. The World Economic Forum in Davos could also provide an opportunity for crisis talks: US President Donald Trump is expected there on Wednesday, as is German Chancellor Friedrich Merz (CDU).

In the US, the week will see quarterly results from streaming giant Netflix, conglomerate 3M, and airline United Airlines. In Germany, however, not many corporate reports are expected yet.

On the economic front, the purchasing managers' indices on Friday are likely to attract particular attention. "Real economic recovery in both Germany and Europe as a whole is still a long time coming," commented Robert Greil, chief strategist at private bank Merck Finck. Although the economy could perform somewhat better in 2026 than the previous year, not least thanks to lower interest rates, optimism remains a long way off.

In addition to fresh producer price data from Germany, the ZEW economic expectations on Tuesday are also likely to play a role. Based on encouraging signals from industry in the fourth quarter, the German economy could have started the new year with momentum, wrote Simon Azarbayjani from Landesbank Hessen-Thüringen (Helaba). The ZEW survey should therefore show a little more economic confidence./niw/la/nas/he

--- By Nicklas Wolf, dpa-AFX ---Ž