After the previous day’s stability, the DAX fell a little further from its weekly high on Wednesday, before the US Federal Reserve’s key interest rate decision in the evening.
The DAX started Wednesday trading 0.38 percent lower at 24,816.96 points and initially remained in red territory. However, around midday it is approaching its previous closing date.
The 25,000 mark remains in investor focus. The German leading index has already turned around twice this week and is now threatened with a moderate setback. Caution dominates events ahead of the US interest rate decision in the evening.
DAX lacks the “igniting spark”
Market observer Jochen Stanzl from broker CMC Markets speaks of “fears of contact with the 25,000 points”. The DAX lacks a “igniting spark” for an upward breakout. The trending topic of artificial intelligence (AI) and the brilliant SpaceX IPO are currently attracting a lot of attention that other markets are missing.
In addition, BMW’s profit warning not only weighs on this stock, but also drags down the blue chips VW and Mercedes-Benz.
Specifications mixed
The specifications from overseas are mixed: the Dow Jones Industrial set another record the evening before, while the NASDAQ 100 corrected noticeably. In Asia, there were morning gains in Japan and South Korea but losses in Hong Kong.
Focus on the Fed’s key interest rate decision
A rate change is not expected, but Warsh’s comments are likely to be the focus of interest. “Above all, the markets want to know whether the Fed will remain independent or whether the political influence of the White House will increase,” believes market observer Maximilian Wienke from broker eToro. He sees Warsh in a dilemma between fighting inflation and demanding lower interest rates from US President Donald Trump. If interest rate increases are promised or answers appear evasive, Wienke assumes that this would increase investors’ nervousness.
DAX record last in January
The gap to record levels remains the focus for the German stock market at the moment. 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.
Julia Walter, Alexandra Hesse, finanzen.net editorial team with material from dpa-AFX and Dow Jones Newswires