The Dax largely relinquished its intraday gains on Tuesday. By the close of trading on Xetra, the index registered 24,910 points, marking a modest increase of 0.1% compared to the previous day’s close.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that although the Dax failed to sustainably breach the 25,000-point barrier reached during the trading session, the general sentiment in Frankfurt remains positive. He pointed out that the automotive sector acted as a brake on the index today, largely due to uncertainty surrounding Volkswagen’s sales warning in China. Investors had been anticipating an economic recovery in the Middle Kingdom after a prolonged downturn, but disappointing retail figures in China further dampened market sentiment today.
Globally, however, investors are returning to a “risk-on” mode, driven by renewed hopes for peace in the Middle East. Wall Street sentiment remains optimistic, bolstered by the euphoria surrounding SpaceX’s mega IPO. SpaceX shares continued their second consecutive trading day of gains, trading above $200. These positive trends-combined with the AI fervor and the successful IPO of Elon Musk’s visionary spaceflight company-remain key drivers for the US stock market. Lipkow added that the Iran conflict served only as a delay, never a true stopping point, and now the focus is on how long this upward development can continue.
Regarding monetary policy, the interest rate hike in Japan was largely anticipated beforehand. However, a shift in the tone concerning inflation expectations prompted some caution in the market. Given falling energy prices, this issue is expected to soften, and future decisions should not be weighed so heavily. A similar approach is anticipated from the US Federal Reserve. Lipkow suggests the Fed may adopt a more defensive stance in 2026, refraining from aggressive rate measures, with two potential rate cuts following the next year.
In currency markets, the European common currency strengthened slightly on Tuesday afternoon; the Euro traded at $1.1605, while the dollar fetched 0.8617 Euros.
Meanwhile, the price of gold saw gains, climbing 0.3% to $4,326 per troy ounce in the afternoon, which equates to 119.86 Euros per gram. Conversely, the price of oil dropped significantly. At around 5 PM German time on Tuesday, a barrel of Brent North Sea crude cost $80.00, a decrease of 3.8% (317 cents) compared to the previous day’s closing price.
