The conflict between the USA and Iran continues to escalate in the face of new mutual attacks, but investors are still cautiously optimistic.
The DAX entered Thursday trading 0.04 percent higher at 24,205.16 points. As it progressed, it initially remained in a narrow sideways range, but is currently increasing slightly.
Rising tensions in the Middle East, questioned high AI valuations and the prospect of rising interest rates remain in the focus of investors.
Iran war continues to escalate
The increased military attacks between the USA and Iran are having a negative impact. The US said it had attacked several military targets in Iran, prompting Tehran to retaliate against US bases and allies in the Middle East. US President Donald Trump announced the attacks with the aim of increasing pressure on Iran.
According to market observer Thomas Altmann from QC Partners, hardly anyone believes in a long-term renewed escalation. “Everyone assumes that Donald Trump wants to present himself as a peace president during the World Cup starting today,” the expert commented this morning.
However, because without an agreement the important oil passage, the Strait of Hormuz, is unlikely to remain passable – and Iran has even declared the complete closure of the strait – oil prices are rising again as a result, which in turn is raising fears of inflation. The day before, new inflation figures from the USA were largely as expected, but they also showed that the level was still too high compared to the US Federal Reserve’s inflation target. New clues are expected from producer price data later in the day.
ECB decides on key interest rate
The Council of the European Central Bank (ECB) will decide today on the future level of key interest rates in the euro area. Experts expect the key interest rate to rise by 25 basis points to 2.25 percent. It would be the first interest rate change in a year and the first Interest rate increase since September 2023. The expectation is based on the sharp increase in energy prices in the wake of the Iran war and the associated closure of the Strait of Hormuz.
Citigroup’s Arnaud Mares expects investors to focus on what signals will be given regarding future monetary policy moves. The US bank is currently sticking to its expectation of a second interest rate hike in a row in July.
DAX record last in January
The distance from the record level for the German stock market is currently not decreasing. On January 13th, the DAX reached an all-time high of 25,507.79 points. Ultimately, it ended trading that day at 25,420.66 points, which also set a record based on the closing price.
Carolin Ludwig, Alexandra Hesse, Martina Köhler, Julia Walter, finanzen.net editorial team with material from dpa-AFX and Dow Jones Newswires