Dax Index News: Fiscal Developments, Tariff News, and US Inflation Set DAX’s Next Move

DAX Extends Losses as Trump Tariff Threats Rattle Markets

The DAX reversed early gains on Tuesday, March 11, as President Trump reignited trade tensions, threatening 50% tariffs on Canadian steel and aluminum imports. He also warned of tariffs on auto imports unless Canada withdrew retaliatory measures.

Tuesday’s tariff threats raised fears of broader tariff moves, including a potential 25% tariff on EU goods.

On Tuesday, March 11, the DAX fell 1.29%, following Monday’s 1.69% sell-off, closing at 22,621.

Sector Highlights: Auto Stocks Slide on Renewed Tariff Threats

Daimler Truck Holding tumbled 5.34% on tariff threats, while Mercedes-Benz Group and Porsche posted losses of 1.94% and 1.73%, respectively. BMW and Volkswagen also ended the session in the red.

Volkswagen also weighed on sentiment, reporting a weaker annual operating profit on Tuesday.

However, Henkel AG & Co. KGAA suffered the biggest loss, plunging 10.36% after warning of a slow start to 2025.

German Fiscal Stimulus Plans in Focus

On Wednesday, March 12, Germany’s fiscal stimulus plans take center stage as political divisions deepen. The Greens opposed loosening the debt brake and a €500 billion infrastructure fund. Germany’s coalition government needs a two-thirds majority in parliament, with a vote on the fiscal package as early as March 18. A Bundestag vote on the two special funds is potentially on March 21.

Rising opposition to the coalition government’s fiscal package could impact German-listed stocks. Sensitive sectors to the fiscal stimulus plan include construction, defense, energy, telecommunications, IT, and tech.

US JOLTS Job Openings and Recession Fears

On March 11, JOLTs data showed job openings at 7.74 million in January, up from 7.508 million in December. However, the January data followed February’s US Jobs Report, which highlighted slowing wage growth and rising unemployment.

The February Jobs Report overshadowed the January figures amid rising fears of a tariff-triggered US recession.

US Markets Extend Losses on Tariff Developments

The Dow and the S&P 500 posted losses of 1.14% and 0.76%, respectively, on March 11, while the Nasdaq Composite Index dropped 0.18%.

Trump’s flip-flopping on tariffs fueled market uncertainty. On Sunday, Trump impacted risk sentiment by refusing to rule out a tariff-induced recession. Trump’s comments underscored the priority in rebalancing trade terms.

US Inflation Data: A Key Test for Fed Rate Cut Bets

While progress on Germany’s fiscal policy and tariff developments are key, US inflation figures require consideration on Wednesday, March 12. Economists forecast the annual core inflation rate to fall slightly from 3.3% in January to 3.2% in February.

A higher-than-expected inflation reading could dampen expectations of a June Fed rate cut, weighing on risk assets. A more hawkish rate path may raise borrowing costs, potentially affecting corporate earnings. Conversely, lower-than-expected inflation could boost bets on multiple Fed rate cuts, boosting demand for rate-sensitive German stocks.

Near-Term Outlook: Key Drivers

The DAX’s near-term outlook hinges on several key drivers:

• German fiscal policy: Progress on fiscal rule changes and an infrastructure fund.
• Trade tensions – Escalating US-EU and US-China trade disputes pose downside risks.
• US CPI Report – Inflation trends will influence the Fed rate path and DAX price action.

Potential DAX Trajectories:

• Bullish Case: Easing trade tensions, progress toward a fiscal stimulus package, and dovish central bank policies could drive the DAX toward the record high of 23,476.
• Bearish Case: Fiscal stimulus resistance, escalating trade risks, or hotter US inflation could drag the DAX toward 22,000.

As of Wednesday morning, the DAX futures were up 204 points, while the Nasdaq 100 mini gained 34 points, signaling a positive session ahead. Optimism followed Trump’s reversal on Tuesday’s Canadian tariffs threats after Tuesday’s European closing bell.

DAX Technical Indicators

Daily Chart:

Despite this week’s pullback, the DAX sits above the 50-day and 200-day Exponential Moving Averages (EMAs). However, tariff-fueled volatility suggests potential short-term downside risks within the broader uptrend.

A breakout from 22,500 would support a move toward 22,750. A return to 22,750 could enable the bulls to target 23,000.

Conversely, if the DAX breaks below 22,150, the 22,000 level and 50-day EMA could be the next key support levels.

With the RSI at 49.75, the DAX sits above oversold levels (below 30), suggesting room for a drop to the 50-day EMA.

Conclusion: Key Drivers to Watch

Traders should monitor:

• Developments in German fiscal policy.
• ECB and Fed commentary.
• US-EU and US-China trade tensions.
• US inflation data.

Stay ahead with our in-depth analysis of the DAX, trade policies, and global economic trends influencing price action. Read our latest reports here for insights into market opportunities and risks.