Uncertainty lingers despite initial profits reported by Dax
The German DAX index is facing negative pressure, according to Jochen Stanzl, chief market analyst at CMC Markets. This comes following the recent EU-US trade agreement, which has introduced headwinds for the German stock market.
On Tuesday, the DAX showed a gain of 0.6 percent, trading around 24,115 points in the morning. However, the index's gains were limited, with Siemens Energy, Infineon, and Siemens Healthineers leading the list of gainers, while BASF, Vonovia, and Volkswagen were among the weakest stocks.
The trade deal, which entails a 15% baseline tariff and steeper levies on steel and aluminum imports, particularly hurts Germany’s key export sectors such as automotive and chemicals. This has contributed to a cautious market environment with subdued gains or slight declines in the DAX index.
The agreement has made the situation less ambiguous, according to Jochen Stanzl. Concrete calculations of the impacts of tariffs, which are now more than four times higher than before, tend to be gloomy, he said. This is reflected in the current straw that investors are clinging to in the DAX, which stands at 23,900 points.
The optimism of investors has taken a hit due to the DAX's turnaround the previous day, and there is a notable uniformly negative reaction to the trade deal with the USA, according to Jochen Stanzl. Short-term speculative positions have been completely unwound, and there is still buying interest at this level, or at least selling restraint, he added.
If the Dax consistently falls below 23,900 points, the risk of a real selling wave increases. However, the new predictability changes the game in the Dax, as the uncertainty of a negatively connoted certainty is receding. This departure from recent weeks, where the Dax has risen despite negative news, was noted by Jochen Stanzl.
In summary, the trade agreement has introduced headwinds for the German stock market, reflected in a cautious to negative tone for the DAX index. Investors are now focusing on geopolitical alignment and resilient sectors rather than broad optimism, as they grapple with the burdens from the tariffs, which outweigh what might be gained from higher planning security.
[1] Germany's modest 0.4% GDP growth in Q2 2025 belies structural headwinds from energy costs and EU-US trade tensions impacting export competitiveness. [2] The EU-US tariff escalation increases costs significantly, further dampening the export-heavy German economy and depressing market sentiment. [3] The DAX experienced early session gains on hopes for eased trade tensions with China but retreated during the day as investors reacted to disappointing economic sentiment readings and awaited U.S. inflation data.
[1] The EU-US trade agreement, along with energy costs, presents significant structural headwinds for the German economy, as it impacts export competitiveness and may hinder the growth of key business sectors like finance and industry.
[2] The escalation of EU-US tariffs has increased costs in the German economy, particularly for export-heavy sectors such as finance, industry, and business, leading to a subdued market environment with cautious or negative sentiments towards the DAX index.
