DAX Index Outlook Amid Trade Tensions

Published: July 14, 2025

Author: Bob Mason

Key Points

• The DAX Index has experienced a decline for two consecutive sessions due to escalating trade tensions following President Trump's tariff announcements.
• Wall Street has also retreated, reflecting broader market uncertainty linked to potential tariffs on EU and Mexican goods.
• The future performance of the DAX is closely tied to developments in US-EU trade relations and signals from central banks.

DAX Index Performance

The DAX Index fell by 0.82% on July 11, closing at 24,255, following a previous loss of 0.38%. The market sentiment has shifted as optimism regarding a US-EU trade deal has diminished, particularly with the looming threat of increased tariffs on EU imports.

Sector Performance

Trade uncertainties have particularly impacted the healthcare and technology sectors. Notable declines were seen in:

• Siemens Healthineers: -3.7%
• Infineon Technologies: -0.72%
• Commerzbank: -2.04%
• Deutsche Bank: -1.32%

US Market Reaction

US markets also faced losses, with the Dow Jones down 0.63%, and the Nasdaq and S&P 500 falling by 0.22% and 0.33%, respectively. President Trump's announcement of a 30% tariff on EU goods, effective August 1, has raised concerns about inflation and its potential impact on Federal Reserve monetary policy.

Federal Reserve Insights

Chicago Fed President Austan Goolsbee commented on the uncertainty created by the tariffs, indicating that ongoing trade tensions could complicate the Fed's path to a stable economic environment. Investors are advised to monitor Fed commentary closely, as it will likely influence market sentiment and risk assets.

Outlook for the DAX Index

The near-term outlook for the DAX Index is contingent on US-EU trade developments and central bank guidance:

• Bullish Scenario: A successful US-EU trade agreement and dovish signals from central banks could propel the DAX towards its record high of 24,639.
• Bearish Scenario: Stalled trade negotiations or hawkish central bank rhetoric may push the DAX down towards the 24,000 mark.

Technical Analysis

Despite recent losses, the DAX remains above its 50-day and 200-day Exponential Moving Averages (EMA), indicating a bullish trend. Key technical levels include:

• Upside Target: A breakout above 24,639 could lead to targets of 24,750 and potentially 25,000.
• Downside Risk: A drop below 24,250 may bring the 24,000 level into play.

The 14-day Relative Strength Index (RSI) currently stands at 57.62, suggesting that the DAX could rise to 24,639 before reaching overbought conditions.

Conclusion

Traders should remain vigilant regarding US-EU trade news and central bank commentary, as these factors will significantly influence the DAX Index's trajectory in the coming weeks.