Dax Index News: DeepSeek Jitters Ease, DAX Holds Gains – Market Analysis

DAX Opens Higher as Siemens Energy Climbs After DeepSeek Rout

The DAX Index opened higher on Tuesday, January 28, rising 0.41% to 21,369. Markets have plenty to think about this week. The Fed and the ECB will deliver interest rate decisions and press conferences. Potential US tariffs loom on February 1, adding to the uncertainty.

While investors expect an ECB rate cut, recent Euro area data could prompt a cautious stance from policymakers regarding multiple cuts.

Daniel Kral, a European macro specialist at Oxford Dynamics, analyzed January’s Euro Area PMI data:

“Habemus growthus in Eurozone and Germany! January composite PMIs edged up to just over 50 due to an improvement in manufacturing (still in recession) and also services (Germany). But details were not flattering, still weak demand, softening labour market and rising input costs…”

Sector Performance:

Siemens Energy AG jumped 3.37% at the open as concerns about DeepSeek subsided.

Auto stocks also contributed to the early gains. Mercedes-Benz Group advanced by 1.41%, while Volkswagen opened up 0.20%. Hopes of the EU averting tariffs boosted demand for auto stocks.

US Markets Highlights

On Monday, January 27, US equity markets had a mixed session as investors reacted to DeepSeek – a low-cost Chinese AI platform – ranking above ChatGPT in Apple’s App Store downloads. The Nasdaq Composite Index and the S&P 500 slid by 3.07% and 1.46%, respectively, while the Dow gained 0.65%.

The rise in DeepSeek’s popularity triggered concerns about US tech valuations. Broadcom Inc. (AVGO) and Nvidia (NVDA) tumbled by 16.97% and 17.40%, respectively.

Upbeat US economic indicators, including Dallas Fed Manufacturing, Chicago National Activity, and new home sales data, had a limited impact on risk sentiment. The DeepSeek-triggered tech meltdown and demand for defensive stocks overshadowed the data.

US Consumer Confidence in Focus as the Fed Looms

Turning to Tuesday’s US session, economists forecast the CB Consumer Confidence Index to rise from 104.7 in December to 106.0 in January.

A larger-than-expected increase could suggest higher consumer spending, fueling inflationary pressures. Rising inflation could delay Fed rate cuts, impacting demand for riskier assets as higher borrowing costs may affect company earnings. Conversely, an unexpected drop toward 100 may boost Fed rate cut bets. Tuesday’s numbers precede the Fed’s interest rate decision and press conference on January 29.

Investors should also monitor Trump’s policy announcements. Markets remain sensitive to tariff-related news.

Near-Term Outlook

The DAX’s trajectory hinges on the ECB and the Fed’s interest rate decisions, and US tariff developments. Hawkish central bank stances or rising threats of sweeping US tariffs may drag the DAX below 21,000. Conversely, dovish signals and the absence of tariff-related news could push the DAX to new highs.

As of Tuesday morning, futures pointed to a positive session. The Nasdaq 100 mini gained 52 points.

DAX Technical Indicators

Daily Chart

Despite Monday’s retreat, the DAX remains well above the 50-day and 200-day Exponential Moving Averages (EMAs), affirming bullish price signals.

If the DAX breaks Tuesday’s high of 21,380, the Index could target its record high of 21,521 next. A break above 21,521 may indicate a climb toward 21,750.

Conversely, a DAX break below 21,150 could signal a drop toward 21,000. A fall through 21,000 may enable the bears to target 20,750.

With the 14-day Relative Strength Index (RSI) at 74.64, the DAX continues sitting in overbought territory (RSI higher than 70). Selling pressure could intensify at the record high of 21,521 due to overbought conditions reflected by the RSI.

Final Thoughts

The DAX faces potential volatility as central bank monetary policy decisions loom. US tariff developments will also influence risk sentiment. Investors should closely monitor tariff-related news and central bank commentary for directional cues.

Stay ahead of market trends with our latest updates on DAX movements, US tariff developments, and central bank policies here to help you navigate the evolving financial landscape.