Dax Index News: Fed and ECB Decisions in Focus as DAX Eyes Record High

DAX Climbs as DeepSeek-Fueled Jitters Ease

On Tuesday, January 28, the DAX gained 0.70%, reversing Monday’s 0.53% loss, closing at 21,431. Tuesday’s gain marked the ninth in eleven sessions, underscoring strong demand for Eurozone stocks.

Market angst over the DeepSeek-fueled tech sector sell-off eased, renewing demand for AI-linked stocks. DeepSeek, known for its low-cost AI model, raised questions about the sustainability of AI development spending and US tech stock valuations after surpassing ChatGPT on Apple’s App Store downloads.

Upbeat corporate earnings contributed to Tuesday’s gains.

Sector Highlights: Siemens Energy and Sartorius Shine

German pharma equipment supplier Sartorius AG led the gains, soaring 11.47% on January 28 on the back of upbeat Q4 earnings and robust orders volumes.

Meanwhile, Siemens Energy AG rebounded 7.53% as investors bought AI-linked stocks on the dip. The stock plunged 19.95% on Monday during the DeepSeek-fueled tech sell-off. The company also released prelim Q1 revenue numbers that beat consensus, contributing to the gains.

German Consumer Sentiment in Focus

On Wednesday, January 29, Germany’s GfK Consumer Confidence Index is expected to climb from -21.3 for January to -20.0 for February.

A stronger-than-expected increase could impact ECB rate expectations. Improving consumer sentiment could signal rising spending, potentially fueling demand-driven inflation. A higher inflation outlook could temper expectations of aggressive ECB rate cuts. Conversely, a weaker reading could strengthen expectations of a dovish ECB stance, driving demand for rate-sensitive German stocks.

US Consumer Confidence Dips as Fed Interest Rate Decision Looms

On January 28, the US CB Consumer Confidence Index unexpectedly fell from 109.5 in December to 104.1 in January. Weakening consumer confidence may signal a pullback in spending, dampening demand-driven inflation. A softer inflation outlook may raise expectations of a more dovish Fed policy stance. Lower interest rates could boost company earnings and valuations, driving demand for rate-sensitive stocks.

US Markets Rebound Ahead of Fed Announcement

US equity markets were in recovery on Tuesday, January 28, following Monday’s DeepSeek-driven tech sell-off. The Nasdaq Composite Index advanced by 2.03%, while the Dow gained 0.31% and the S&P 500 added 0.92%.

Nvidia (NVDA) soared 8.93% as investors bought the dip after Monday’s 16.97% slump on the DeepSeek news.

US Economic Calendar: Federal Reserve and Powell in Focus

On January 29, investors will likely consider the upcoming Fed interest rate decision and FOMC press conference. Markets expect the Fed to keep interest rates at 4.5%. Unless the Fed unexpectedly cuts rates, the focus will be on Fed Chair Powell’s press conference.

A dovish tone – Supporting monetary policy easing amid softening inflation expectations – could boost risk sentiment. Conversely, hawkish signals pointing to a delay in rate cuts, persistent inflation concerns, or a tight labor market may weigh on investor confidence.

The Fed’s decision and press conference will happen after the European market close, meaning DAX movements on Thursday could reflect the US market reaction.

Near-Term Outlook

The DAX’s performance will depend on the ECB and Fed interest rate decisions and press conferences.

• Dovish ECB and Fed signals could drive the DAX toward 22,000.
• Hawkish stances could weigh on sentiment, potentially dragging the Index below 21,000.

External factors – including potential stimulus from Beijing and US tariffs – will influence DAX trends. Chinese stimulus could support German exports, while US tariffs may create headwinds.

As of Wednesday morning, futures signaled a positive start to the session.  DAX futures were up 64 points, while the Nasdaq 100 mini gained 21 points.

DAX Technical Indicators

Daily Chart

Following Tuesday’s rebound, the DAX sits well above the 50-day and 200-day Exponential Moving Averages (EMAs), affirming bullish price signals.

A break above the January 24 record high of 21,521 could enable the bulls to target 21,750. A breakout from 21,750 may bring the 22,000 level into sight.

Conversely, a DAX drop to 21,350 could signal a fall toward 21,000, a key support level.

With the 14-day Relative Strength Index (RSI) at 75.56, the DAX remains in overbought territory (RSI higher than 70). Selling pressure could intensify at Friday’s record high of 21,521.

Conclusion: Key Drivers to Watch

Traders should monitor upcoming ECB and the Fed decisions. External factors, including Chinese economic policies and US tariff developments, could further influence the DAX’s trajectory.

Read our detailed analysis of how global market dynamics influence the DAX’s performance here.