Dax Index News: Can the DAX Break Its Seven-Day Losing Streak? Outlook Today

DAX Sees Seven-Day Losing Streak – Can the DAX Break the Streak?

The DAX’s seven-day retreat reflects investor unease amid US tariff threats and a hawkish Fed stance.

On Monday, December 23, the DAX slipped by 0.18%, following Friday’s 0.43% loss, closing at 19,849. The DAX briefly revisited the 19,900 level before retreating.

Sector Performance: Autos Leave the DAX in the Red

US tariff threats resonated on Monday, with Germany’s auto sector a likely target. Investor unease lingered following Trump’s threat of tariffs if the EU did not purchase US oil and gas to narrow the US trade deficit with the EU.

Volkswagen led the declines, sliding 1.98%, while Porsche ended the session down 1.62%. Mercedes-Benz Group and BMW also posted heavy losses.

ECB President Lagarde Boosts Rate Cut Hopes

On Monday, ECB President Lagarde reportedly raised hopes for a Q1 2025 rate cut by stating the ECB was close to achieving its medium-term inflation target. The ECB President supported further rate cuts if inflation continued to soften.

Lower borrowing costs could bolster company earnings, potentially driving stock prices higher. Furthermore, a weaker EUR/USD could offset some of the effects of US tariffs. However, the Fed’s more hawkish economic projections and Trump’s policies remained headwinds.

US Consumer Confidence Dips Despite a Tight Labor Market

On Monday, the CB Consumer Confidence Index dropped to 104.7 in December, down from 112.8 in November. Consumers had less positive views about the current situation and outlook. The fall in confidence could signal a pullback in consumer spending, dampening demand-driven inflation. A softer inflation outlook could support a more dovish Fed rate path.

US Jobless Claims Support a Less Dovish Fed

Meanwhile, Thursday’s better-than-expected US labor market data could test demand for DAX-listed stocks. Initial jobless claims fell slightly from 220k to 219k, aligning with the Fed’s outlook for fewer rate cuts.

Tight labor market conditions could boost wage growth, fueling consumer spending and demand-driven inflation. Fewer rate cuts may weigh on capital-intensive firms because of higher borrowing costs.

US Markets Mixed as Bitcoin Retreat Impacts the Nasdaq

US equity markets had a mixed Thursday session. The Nasdaq Composite Index and the S&P 500 slipped by 0.05% and 0.04%, respectively. In contrast, the Dow edged 0.07% higher.

Beyond the labor market data, bitcoin’s (BTC) retreat weighed on the Nasdaq. Crypto-related stock MicroStrategy (MSTR) dropped by 4.78% as BTC retreated further from its December 17 all-time high of $108,231.

In the bond markets, 10-year US Treasury yields declined, limiting falls in the Nasdaq and S&P 500.

US Trade Data and Tariffs Pose Risks to the DAX

In Friday’s US session, trade data will draw interest amid tariff threats on EU goods. Economists expect the US trade deficit to widen from $99.08 billion in October to $100.7 billion in November.

A widening trade deficit with the EU could spark fresh US tariff warnings, potentially weighing on the DAX. Ahead of the holidays, Trump threatened tariffs if the EU did not narrow the trade deficit between the two economies by buying US oil and gas.

US tariffs on German goods may curb demand, impacting company earnings and stock valuations.

Near-Term Outlook

The DAX remains highly sensitive to US data and tariff developments. Stronger US economic data could affirm a hawkish Fed stance, dragging the DAX below 19,650. Conversely, softer data and signals of near-term Fed rate cuts might push the index toward 20,000.

Beyond the data, US tariff-related developments remain a key risk factor.

As of Friday morning, futures pointed to a mixed session. DAX futures were up 75 points, while the Nasdaq-mini futures declined by 55 points. Despite the seven-day losing streak, DAX’s futures signaled early gains on Friday, reflecting improved sentiment from Chinese industrial profit data.

DAX Technical Indicators

Daily Chart

Despite a seven-day losing streak, the DAX remains above the 50-day and 200-day EMAs, affirming bullish price signals.

If the DAX climbs to 20,000, it could move toward 20,350 next. A return to 20,350 could enable the bulls to target the December 13 record high of 20,553.

Tariff-related chatter, US data, and central bank commentary will influence DAX trends.

Conversely, a DAX break below the 19,675 support level and 50-day EMA could signal a fall toward 19,500. However, buying pressure may intensify at the 19,657 support level. The 50-day EMA is confluent with it.

With the 14-day RSI at 47.95, the DAX could drop below 19,500 before entering oversold territory (RSI less than 30).

Final Thoughts

The DAX remains exposed to global forces, including US economic data, tariff concerns, Chinese economic indicators, and central bank policy guidance. Expect further volatility amid the Fed’s hawkish outlook and tariff warnings. Potential US tariffs on China could exacerbate competition, further reducing demand for German goods.

Discover how global market dynamics shape DAX performance in our in-depth analysis here.