Dax Index News: Can the DAX Sustain Momentum Above the 20,000 Milestone?

DAX Hits 20,000 Milestone as EUR/USD Trends Bolster Trade Terms

Can the DAX hold above the 20,000 barrier, or will market headwinds weigh?

On Tuesday, December 3, the DAX advanced by 0.42%, following Monday’s 1.57% rally, closing at 20,017. Significantly, the DAX climbed to a new all-time high of 20,038.

Trump’s silence on EU tariffs, EUR/USD weakness, and the potential for multiple ECB rate cuts has driven demand for DAX-listed stocks. A weaker EUR could improve German trade terms.

Nevertheless, uncertainty lingers. Can the DAX maintain its bullish trend, or will Trump tariff threats and macroeconomic headwinds impact investor confidence?

Sector Highlights: Materials, Retail, and Tech Lead The Gains

Materials, retail, and tech stocks outperformed, with Heidelberg Materials rallying 3.21%. Tech stocks, including SAP and Infineon Technologies, advanced by 2.19% and 0.82%, respectively. BNP Paribas rated ASML ‘outperform,’ driving demand for tech stocks.

UBS upgraded Hugo Boss to ‘buy,’ supporting retail stocks Adidas and Zalando, which posted gains of 1.95% and 2.13%, respectively.

However, Barclays lowered Mercedes Benz Group’s rating to ‘underweight,’ weighing on auto stocks. Mercedes Benz Group slid by 2.53%, while Porsche and Volkswagen saw declines of 0.84% and 0.37%, respectively.

Euro Area Services PMIs: A Turning Point?

On Wednesday, finalized services PMI data could further influence the ECB rate path and EUR/USD trends. According to the preliminary survey, Germany’s Services PMI dropped from 51.6 in October to 49.4 in November, indicating a sector contraction.

Downward revisions to the PMI may further raise expectations of multiple ECB rate cuts, potentially reducing EUR demand. The DAX could move toward 20,150. Conversely, an upward revision may pull the DAX below 20,000.

Expert Views on Germany’s Private Sector

Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented on Germany’s preliminary private sector PMI data, stating,

“These figures are bad news. Until recently, the German economy was stabilized somewhat by the service sector, which was making up for the steep decline in manufacturing. Not anymore. In November, service providers’ activity took a hit for the first time since February. Companies are also dealing with rising costs, especially wages. […] While some of these costs were passed on to customers, it looks like the sector is feeling the heat.”

US JOLTS Job Openings Signal a Resilient US Labor Market

JOLTS job openings increased from 7.372 million in September to 7.744 million in October, indicating a robust US economy. Quit rates also trended higher, signaling confidence in the labor market.

A tight labor market may support wage growth, fueling consumer spending and demand-driven inflation. The Fed could lower market expectations of multiple interest rate cuts, potentially impacting riskier assets. However, a weaker EUR/USD could limit the effects of a more hawkish Fed rate path on the DAX.

US Market Trends Offer Support

How might a resilient US economy affect the global markets and near-term DAX trends?

On Tuesday, December 3, US equity markets posted mixed results. The Nasdaq Composite Index advanced by 0.40%, extending its winning streak to three sessions, while the S&P 500 edged 0.05% higher. However, the Dow declined by 0.17%.

The US labor market data influenced market sentiment, while tech stock demand remained robust.

US Economic Calendar: Labor Market and Services in Focus

In Wednesday’s US session, ADP employment change and ISM Services PMIs could influence risk appetite.

Economists expect the ADP to report a 150k rise in employment in November, down from 233k in October. Furthermore, economists forecast the ISM Services PMI to drop slightly to 55.5 in November.

Better-than-expected data could signal a more hawkish Fed rate path, potentially driving US dollar demand. A weaker EUR/USD could counter sentiment toward fewer Fed rate cuts, fueling buyer appetite for DAX-listed stocks.

Near-Term Outlook

In the near term, DAX movements will likely hinge on Services PMI, US labor market data, and US Tariff-related chatter. The risk of US tariffs poses a headwind. Tariffs could impact demand for German goods, potentially affecting company earnings and stock prices.

Silence on US tariff threats and dovish ECB guidance could propel the index toward 20,150. Conversely, stronger PMIs or labor market data might lead to a retreat toward 19,750.

As of Wednesday morning, futures signaled a positive session ahead. While DAX futures were up by 1 point, the Nasdaq mini futures advanced by 63 points.

Investors should monitor economic data, central bank commentary, and tariff-related news for trading opportunities.

DAX Technical Indicators

Daily Chart

After climbing to 20,000, the DAX sits well above the 50-day and 200-day EMAs, affirming bullish price signals.

If the DAX breaks above its all-time high of 20,038, it could target 21,150 next. Furthermore, a breakout from 20,150 may bring 20,500 into play.

Services PMIs, US labor market data, central bank commentary, and US tariff-related news will influence DAX trends.

Conversely, a DAX break below 19,750 may signal a drop toward 19,750. A fall through 19,750 could enable the bears to target 19,500.

With the 14-day RSI at 67.66, the DAX may rise to 20,150 before entering overbought territory.

Where do you think the DAX is heading next? Will it hold above 20,000, or are we in for a correction? Get ahead of market trends by clicking here for expert analysis and forecasts.