Strong profit-taking in the semiconductor sector weighed on the DAX at the end of the trading week and pushed the leading German index into the red.
The DAX entered Friday trading with a discount of 0.25 percent at 24,881.87 points. The barometer then worked its way to the zero line. At times the leading index even made moderate gains. However, after the US labor market data was presented in the afternoon, it slipped noticeably into the red. Ultimately, it ended the weekend 0.75 percent weaker at 24,759.05 points.
Shots fired despite ceasefire between Israel and Lebanon
A slight headwind came from geopolitics. After Israel and Lebanon recently agreed to a ceasefire, there were again reports of mutual shelling by the pro-Iranian Hezbollah militia in Lebanon. However, oil prices remained calm and barely moved after the recent decline. This was helped by the fact that Gulf states held out the prospect of a recovery in production following a possible end to the blockade of the Strait of Hormuz. Kuwait’s state oil company said it could restore nearly 70 percent of its oil production within six to eight weeks.
Profit taking after AI rally
In addition, semiconductor stocks in particular suffered from profit-taking following their AI rally – first in the USA and now also in Japan and South Korea. The South Korean KOSPI, which had already doubled over the course of the year, lost significantly. The US industry index for semiconductor stocks (SOXX) also fell sharply at its record level before a few brave souls looked for a new opportunity.
Market expert Stephen Innes, citing an analysis by BNP Paribas, highlighted the importance of SpaceX’s upcoming IPO. The flowing liquidity could become a real litmus test for the AI rally.
Important data from the US economy is partly better than expected
In the afternoon the labor market report for May was due in the USA. The unemployment rate was particularly interesting for the ING experts. As expected, this remained at a low 4.3 percent. This means the market can now put a check on the report. At the same time, the number of employees in the USA rose significantly more than expected in May. Outside agriculture, it increased by 172,000, as the Labor Department announced on Friday in Washington. On average, economists had only expected 88,000 new jobs. The increase in employment in the previous two months was also revised upwards by a total of 93,000 jobs.
DAX record last in January
The distance from the record level is becoming slightly larger again for the German stock market. 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, Benedict Kurschat, finanzen.net editorial team with material from dpa-AFX and Dow Jones Newswires