DAX on record: Is the market continuing to rise despite US interest rate fears?

DAX on record: Is the market continuing to rise despite US interest rate fears?

On May 20, 2025, the DAX reached a record high and is currently trading at 24,048 points, which corresponds to an increase of 0.5%. This is a notable increase as the index has gained over 20% since the start of the year; the previous high was recorded the day before at 23,935 points. This positive development is supported by hopes of an end to the tariff conflict between the USA and China and falling inflation rates. Nevertheless, the analysts report tagesschau.de that warnings are being issued about possible pullbacks to 23,476 or 23,338 points.

At the same time, the US stock markets are less stable. The Dow Jones opened weaker, down 0.5% to 42,718 points, while the Nasdaq 100 also fell 0.5% and the S&P 500 fell 0.3% to 5,943 points. This development is heavily impacted by the US Federal Reserve's hesitant interest rate policy. The President of the Atlanta Regional Reserve Bank, Raphael Bostic, expressed concern about the uncertainties resulting from US trade policy.

US interest rate policy and market movements

The Federal Reserve recently cut its key interest rate by 25 basis points but forecasts it will consider fewer rate cuts going forward, putting pressure on markets. The development of the DAX could be put under additional pressure on Thursday, as broker IG estimates the index to be a good 1% lower at 19,995 points. High price fluctuations are traditionally to be expected before a major expiry day, when many futures and options expire.

Important quarterly figures from companies such as Douglas, FedEx and Nike are also expected on Thursday. Analysts are optimistic as Goldman Sachs increased its price target for BASF from 53 to 57 euros, and JPMorgan raised its price target for Hugo Boss from 42 to 44 euros. Nevertheless, Munich Re was also downgraded from “Buy” to “Neutral” by UBS, which raised the price target from 540 to 555 euros.

International market movements

Outside Germany, the markets are observing inconsistent development. While Asian markets showed mixed results on Thursday - the Nikkei 225 fell 0.7%, the CSI 300 rose 0.1% and the Hang Seng fell 0.6% - oil prices appear to be holding steady. Brent is at $65.31 and WTI is at $62.50. The EU also plans to lower the price cap for Russian crude oil from $60 to $50.

Companies in Germany are also showing mixed results. While Deutsche Telekom was able to secure the broadcasting rights for the 2026 World Cup, Vodafone reported a net loss of 3.7 billion euros for the 2024/25 financial year. Additionally, SFC Energy shares fall 14% after a disappointing quarterly report. BMW is also planning share buybacks worth up to 2 billion euros, while Honda is reducing its investments in electromobility from 10 trillion yen to 7 trillion yen.

In summary, markets are facing challenges. While the DAX reaches record highs, US stock markets show a mixed picture with uncertainties in interest rate policy and trading dynamics influencing the global financial market.

The developments on the markets are influenced by THE SHAREHOLDER continues to be followed closely.