Dax Index News: US Tariffs Send DAX Futures Crashing 555 Points

Four-Day Winning Streak Sends DAX to Record-High

On Friday, January 31, the DAX edged 0.02% higher, adding to Thursday’s 0.41% gain and closing at 21,732. Significantly, the Index extended its winning streak to four sessions, hitting a record intraday high of 21,801.

Soft German inflation and retail sales figures bolstered expectations of multiple ECB rate cuts. Lower borrowing costs could boost company earnings and valuations.

Sector Highlights: Infineon Tech, Siemens Energy, and Commerzbank Lead Gains

Infineon Technologies gained 1.97% as chip maker ASML advanced further after upbeat earnings on January 29.

Siemens Energy AG continued its recovery from the DeepSeek-fueled sell-off, rallying 1.97%. Q1 revenue figures from earlier in the week sent the stock higher.

Commerzbank advanced by 1.72% on a jump in profits.

Meanwhile, automakers struggled amid ongoing tariff uncertainty. BMW slid by 1.60%, while Daimler Truck Holding, Mercedes-Benz Group, and Porsche also closed lower.

German Economic Indicators Support Multiple ECB Rate Cuts

German economic data reinforced concerns about the German economy. Retail sales tumbled 1.6% month-on-month in December, while the unemployment rate rose from 6.1% in November to 6.2% in December.

Significantly, Germany’s annual inflation rate eased from 2.6% in December to 2.3% in January, signaling weaker demand.

Rising unemployment, weaker consumption, and softer inflation support a more dovish ECB rate path.

Eurozone Inflation in Focus

On Monday, February 3, Eurozone inflation figures could bolster expectations of aggressive ECB monetary policy easing. Economists forecast the core inflation rate to drop from 2.7% in December to 2.6% in January.

A larger-than-expected fall toward the ECB’s 2% inflation target would support multiple ECB rate cuts.

Other stats include finalized Manufacturing PMI numbers. However, these will likely play second fiddle to the inflation data.

US Personal Income and Outlays Report Dampen Fed Rate Cut Expectations

On January 31, the all-important Personal Income and Outlays Report tempered bets on a Fed rate cut in H1 2025. The Core PCE Price Index increased by 2.8% year-on-year in December after a similar rise in November, signaling persistent inflation.

Additionally, personal income and spending data pointed to a potential pickup in inflationary pressures. Personal spending rose 0.7% month-on-month, while personal income also accelerated. Upward trends in income and spending could fuel demand-driven inflation, possibly delaying Fed policy easing.

US Markets Retreat as Trump Rolls Out Tariffs

US equity markets ended Friday in negative territory, impacted by US data and US tariff developments. The Nasdaq Composite Index fell 0.28%, while the Dow and the S&P 500 dropped by 0.75% and 0.50%, respectively.

The White House stated US President Trump will impose import duties on Canada, China, and Mexico, effective February 1. Tariffs could lead to higher import prices and inflation, potentially affecting the Fed’s policy outlook.

Corporate earnings also impacted sentiment. Chevron (CVX) tumbled 4.56% after missing analyst expectations.

US Economic Calendar: Manufacturing Focus

On February 3, traders will focus on the US manufacturing sector. Economists forecast the ISM Manufacturing PMI to rise from 49.3 in December to 49.5 in January. Moreover, economists expect employment and price sub-components to also move higher.

A pickup in job creation and prices could bolster expectations of a higher-for-longer Fed rate path. However, weaker employment and prices may raise hopes for a Fed rate cut in H1 2025.

Investors should also monitor FOMC members’ commentary on tariffs and their potential influence on monetary policy.

Near-Term Outlook

The DAX’s performance will depend on Eurozone inflation and US economic data.

• Softer Eurozone inflation figures may push the DAX toward 22,000.
• Higher inflation could weigh on rate-sensitive German stocks, potentially dragging the Index toward 21,500.

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

As of Monday morning, futures reflected sentiment toward Trump’s tariffs  DAX futures slumped by 555 points, while the Nasdaq 100 mini tumbled 567 points. Trump’s tariffs and China’s Caixin Manufacturing PMI pressured the DAX ahead of the European opening bell.

DAX Technical Indicators

Daily Chart

After a four-day winning streak, the DAX remains well above the 50-day and 200-day Exponential Moving Averages (EMAs), confirming bullish price trends.

A break above the January 31 record high of 21,801 could signal a move toward 22,000. A breakout from 22,000 may enable the bulls to target 22,500.

Conversely, if the DAX falls below 21,500, it could bring the key support level at 21,000 into sight.

With the 14-day Relative Strength Index (RSI) at 79.59, the DAX remains in overbought territory (RSI higher than 70). Selling pressure could intensify at Friday’s record high of 21,801.

Conclusion: Key Drivers to Watch

Traders should keep a close eye on Eurozone inflation and US economic indicators.

Additionally, external factors such as China’s economic policies and US trade developments could further influence the DAX’s trajectory.

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