Dax Index News: Today’s Forecast Eyes 24,000—But Trade Fears Cloud DAX Recovery

DAX Tumbles as President Trump Threatens Fresh Tariffs

The DAX extended losses on Friday, May 23, dropping 1.54% to close at 23,630, after US President Trump threatened a 50% tariff on EU goods, triggering a flight to safety. He stated:

“The European Union, which was formed for the primary purpose of taking advantage of the United States on TRADE, has been very difficult to deal with… I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States. Thank you for your attention to this matter!”

Stock Movers: Auto, Tech Stocks Lead DAX Decline

Trump’s tariff threat sent auto stocks crashing amid fears of levies impacting sales and corporate earnings. Mercedes-Benz Group and BMW slid 3.99% and 3.71%, respectively. Porsche and Volkswagen also posted heavy losses.

Tech stocks also came under heavy selling pressure, with Infineon Technologies falling 3.79%.

DAX Gains on GDP Before Tariff Fears Trigger Sell-Off

The German economy expanded by 0.4% quarter-on-quarter in Q1 2025, recovering from a 0.2% contraction in Q4 2024. An upward revision from a preliminary 0.2% growth figure boosted demand for German-listed stocks. While upbeat GDP figures lifted early sentiment, Trump’s tariff announcement erased gains later in the session.

Oliver Rakau, Chief Germany Economist and ECB commentator at Oxford Economics, remarked:

“Who else thinks that Trump read about Germany’s upwardly revised Q1 GDP resulting in an even wider growth gap to the US before putting the 50% tariff out?”

Wage Growth Slows, Boosting ECB Rate Cut Bets

Eurozone wage growth figures raised bets on multiple ECB rate cuts. Negotiated wage growth slowed from 4.12% in Q4 2024 to 2.38% in Q1 2025. Softer wages may impact consumer spending, dampening demand-driven inflation.

However, Trump’s tariff warning overshadowed expectations of a more dovish ECB stance.

ECB President Lagarde in Focus

On Monday, May 26, ECB President Christine Lagarde is scheduled to speak. Lagarde’s reaction to Trump’s tariff threat and her insights into its potential impact on the ECB’s policy stance will influence sentiment. Support for multiple rate cuts to bolster the Euro area economy could provide market relief, while calls to delay further policy moves may pressure German-listed stocks.

Wall Street Slides as Trade Tensions Intensify

US markets stumbled on May 23 as markets reacted to Trump’s tariff threat. The Nasdaq Composite Index dropped 1%, while the Dow and S&P 500 fell 0.61% and 0.67%, respectively.

Upbeat US housing sector data failed to improve risk sentiment. New home sales surged 10.9% in March after rising 2.6% in February, signaling robust demand. Economists consider the housing market a barometer of the US economy.

The US markets are closed for the Memorial Day holiday on May 26. However, trade developments and Fed comments will influence demand for DAX-listed stocks.

DAX Outlook: Key Catalysts Ahead

The DAX’s near-term outlook hinges on trade developments, economic indicators, and central bank signals.

• Bullish Case: Easing trade friction, positive Euro area economic data, and dovish central bank signals could send the DAX toward 24,500
• Bearish Case: Rising trade tensions, weak economic data, or hawkish central bank cues could drag the DAX toward 23,500.

As of Monday morning, the DAX futures jumped 321 points, while the Nasdaq 100 mini rose 321 points, suggesting a positive start to the week. Reports of President Trump agreeing to delay 50% tariffs on the EU from June 1 to July 9, lifted risk sentiment.

Technical Setup Suggests Cautious Optimism

Despite Friday’s sell-off, the DAX continues trading above the 50-day and the 200-day Exponential Moving Averages (EMA), supporting a bullish bias.

• Upside Target: A return to 24,000 would support a break above the May 21 high of 24,152, opening the path to 24,350. A sustained move through 24,350 could bring 24,500 into sight.
• Downside risk: A break below 23,500 could expose 23,000, with further support at the 50-day EMA.

The 14-day Relative Strength Index (RSI) at 59.72 suggests the DAX could climb to 24,152 before entering overbought territory (RSI > 70).

Conclusion: Monitor Macro Themes and Trade News

DAX traders should focus on macroeconomic indicators, central bank communication, and trade headlines for guidance on market trends.

Explore our exclusive forecasts to see whether trade optimism can send the DAX to new highs. Read our latest DAX research and macro insight here.