Dax Index News: Forecast Hinges on Tariff Headlines as EU Opens Door to Talks

DAX Rallies on Tariff Optimism

The DAX surged at the open on Tuesday, April 8, rallying 1.09% to 20,006 amid growing optimism over tariff relief. Hopes for the EU avoiding Trump’s tariffs on steel, aluminum, auto, and other goods boosted risk sentiment.

On Monday, April 7, the European Commission proposed 25% counter-tariffs to Trump’s steel and aluminum levies. Notably, the list excluded items such as bourbon, potentially removing the threat of 200% duties on European wines, spirits, and other alcoholic beverages. Importantly, the EU’s tariffs will take effect on May 16 and December 1, giving US-EU negotiators ample time to reach a trade agreement.

European Commission President Ursula von der Leyen announced:

“We stand ready to negotiate with the US. Indeed, we have offered zero-for-zero tariffs for industrial goods as we have successfully done with many other trading partners. Because Europe is always ready for a good deal, so we keep it on the table. But we are also prepared to respond through countermeasures and defend our interests.”

Daniel Kral, Europe macro specialist at Oxford Economics, commented:

“Zero-for-zero tariffs with the US would imply a EU-US trade deal, otherwise the EU (and US too but…) would be obliged to offer zero tariffs for all other countries under the World Trade Organization’s Most Favoured Nation principle (the cornerstone of the WTO system).”

Sector Performance: Banks and Autos Lead the Recovery

German banks were among the front-runners, with tariff optimism driving demand for auto stocks.

Deutsche Bank rallied 2.09%, while Commerzbank advanced by X%. Softer tariffs would ease recession fears, boosting demand for bank stocks.

Meanwhile, auto stocks benefited from the shift in tariff sentiment. Volkswagen led the gains, rising 0.80%. BMW, Mercedes-Benz Group, and Porsche also trended higher.

US Markets Mixed as Trade War Risks Linger

US equity markets opened the week on a mixed note as investors considered tariff-related developments. The Nasdaq Composite Index rose 0.10%, while the Dow and the S&P 500 dropped 0.91% and 0.23%, respectively, extending their losses from Friday.

Initial reports of a potential 90-day delay to the scheduled April 9 tariffs triggered a broad-based market rally. However, President Trump dismissed the news, confirming his intent to proceed, impacting risk sentiment. Trump also warned China against its 34% counter-tariff measures, threatening an additional 50% in duties if Beijing failed to back down by Tuesday, April 8.

Near-Term Outlook

The DAX’s trajectory remains sensitive to tariff headlines, central bank guidance, upcoming US inflation data:

• Bearish Scenario: Rising US-EU trade tensions, hotter US inflation, and hawkish central bank stances could push the DAX toward 19,500.
• Bullish Scenario: De-escalating trade tensions, softer US inflation, dovish central bank commentary could drive the DAX toward 20,500.

DAX Technical Indicators

Daily Chart

The DAX opened below its 50-day and 200-day Exponential Moving Averages (EMA) on April 8, suggesting bearish momentum.

A break above 20,150 could signal a move toward the 200-day EMA. A sustained move through the 200-day EMA may enable the bulls to target 20,500.

On the downside, a drop below 19,675 could suggest a further decline toward 19,500, potentially opening the path to sub-19,000.

With the 14-day Relative Strength Index (RSI) at 27.78, the DAX sits in oversold territory (RSI< 30). Buying pressure could intensify around Monday’s low of 18,490.

Final Thoughts

Key drivers shaping the DAX outlook include trade negotiations, the US CPI report on April 10, and central bank guidance from the ECB and the Fed. Amid heightened volatility, traders should closely monitor macroeconomic releases, policy signals, and technical indicators here.