DAX Index News: US and German Economic Data Drive DAX Market Volatility

Market Overview

On Tuesday, September 3, the DAX declined by 0.97%, reversing a 0.13% gain from the previous day, closing at 18,747. Notably, the DAX climbed to a new all-time high of 18,991 before retreating.

Key DAX Market Movers

Infineon Technologies led the declines, sliding by 4.69% in response to the US tech sector rout.

Auto stocks also suffered heavy losses amidst concerns about demand. Daimler Truck Holding and BMW saw losses of 3.47% and 1.90%, respectively. Mercedes Benz Group fell by 1.71%.

German Services Sector in Focus Amid Rising Recession Fears

On Wednesday, September 4, Germany’s finalized Services PMI will draw investor scrutiny amidst rising fears of a recession. According to the preliminary survey, the HCOB Services PMI declined from 52.5 in July to 51.4 in August.

A downward revision to the preliminary PMI could fuel concerns about an economic recession. Investors should also consider subcomponents, including prices and employment. Lower employment and prices may support a more dovish ECB rate path to bolster the Euro area economy.

A more dovish ECB rate path may support buyer demand for DAX-listed stocks.

Expert Views on Germany’s Services Sector

Hamburg Commercial Bank Chief Economist Dr. Cyrus de la Rubia remarked on the preliminary Services PMI survey, stating,

“The struggles in manufacturing are starting to spill over into the otherwise steady services sector. For the third month in a row, services activity growth has slowed down. New business is barely growing, and backlogs declined once again. The export side of services, including tourism, isn’t offering much support either, shrinking at an even faster rate than in July”

US Manufacturing Fuels Recession Fears

The US S&P Global Manufacturing PMI declined from 49.6 in July to 47.9 in August, fueling fear of a hard US economic landing. According to the finalized survey, production fell for the first time in seven months, while new orders and staffing levels also dropped.

S&P Global Market Intelligence Chief Business Economist Chris Williamson commented,

“A further downward lurch in the PMI points to the manufacturing sector acting as an increased drag on the economy midway through the third quarter. Forward-looking indicators suggest this drag could intensify in the coming months.”

US Market Trends

On Tuesday, September 3, the Nasdaq Composite Index tumbled 3.26%, while the Dow and the S&P 500 saw losses of 1.51% and 2.12%, respectively. NVIDIA (NVDA) slumped by 9.53%, following news of an antitrust investigation, contributing to the Nasdaq’s decline.

US Economic Calendar

On Wednesday, September 4, the US labor market will be in focus. Economists expect JOLTs Job Openings will fall from 8.184 million in June to 8.100 million in July. A larger-than-expected fall below 8 million could fuel speculation about a hard US economic landing.

A deteriorating labor market may affect wage growth, possibly affecting consumer spending. Downward trends in consumer spending may impact the US economy as it contributes over 60% to GDP.

Intensifying speculation about a US recession could impact buyer demand for riskier assets.

Expert Views on the US Labor Market

On Monday, The Kobeissi Letter, an industry-leading commentary on the global capital markets, stated,

“Further evidence higher unemployment is coming: US consumers’ perceptions of the labor market have weakened to the worst level since 2021. […] In previous business cycles, has been a leading indicator for unemployment. It now suggests that the unemployment rate may increase toward 5.5% in coming months. The labor market is trending toward a recession.”

Near-Term Outlook

Near-term DAX trends will depend on US labor market numbers and services sector data. Weaker figures could fuel expectations of a US economic recession, possibly pushing the DAX down toward 18,000.

However, economic data from Germany also require consideration. Weak stats from Germany could also influence buyer appetite for DAX-listed stocks.

In the futures markets, the DAX and the Nasdaq mini were down by 177 and 127 points, respectively. On Wednesday morning, disappointing Services PMI numbers from China added to the gloomy mood.

Investors should stay alert with central bank speakers, and economic indicators likely influence risk sentiment. Monitor the news wires, the economic calendar, and expert commentary to manage trading strategies.

Stay informed with our latest news and analysis to manage your risks effectively.

DAX Technical Indicators

Daily Chart

The DAX held above the 50-day and 200-day EMAs, affirming bullish price signals.

A breakout from 18,750 could support a return to Tuesday’s high of 18,991. Furthermore, a return to 18,991 could give the bulls a run at 19,000.

US labor market data, German services PMI numbers, and central bank commentary require consideration.

Conversely, a drop below 18,650 could signal a fall toward the 50-day EMA. A fall through the 50-day EMA could give the bears a run at 18,250.

The 14-day RSI at 60.90 suggests a move through Tuesday’s high of 18,991 before entering overbought territory.