Investors reacted positively to market developments, propelling the DAX beyond the 22,400 mark to reach an all-time high. The key question now is: how much further can the German stock index climb?
In early trading, the DAX surged to a fresh record high of 22,429 points. At present, the index stands at 22,387, reflecting a gain of around 1%. Investors appear to be encouraged by signals of upcoming geopolitical negotiations, as well as broader economic expectations.
Yesterday, the German benchmark index had already gained 0.7% at its peak, reaching a record 22,193 points, buoyed by strong corporate earnings. It closed the day with a 0.5% increase at 22,148 points.
DAX Performance:
22,328.51 points (+180.48 / +0.81%)
Premature Optimism?
“Speculation about an end to the war is gaining momentum and providing market support,” noted analysts at Helaba in their daily report. However, they also cautioned that trade and tariff risks remain a source of concern.
Kyle Rodda, chief analyst at Capital.com, expressed scepticism: “The optimism may be premature. Early US drafts of a peace deal reportedly included Ukrainian commitments to abandon NATO aspirations and cede territory—significant concessions that may not be easily accepted.”
No Further Rate Cuts by the Fed for Now?
Meanwhile, hopes for looser monetary policy in the US have been dampened. Consumer prices in the US rose by 3.0% year-on-year in January, accelerating from 2.9% in December.
What does this mean for monetary policy? “The Federal Reserve will now have sufficient justification to keep interest rates on hold while assessing the impact of government measures,” explained Tom Nakamura, currency strategist and co-head of fixed income at AGF Investments.
Experts at Commerzbank have also revised their forecasts, stating: “Markets are now fully pricing in a rate cut only in October 2025, whereas it had previously been expected by mid-year.”
Weak Performance on Wall Street
Wall Street pared some of its initial losses following the release of the US inflation report. The Dow Jones Industrial Average ended the day down 0.5% at 44,368 points. The broader S&P 500 fell by 0.3% to 6,051 points, while the tech-heavy Nasdaq remained largely unchanged at 19,649 points.
