DAX and ifo index: spark of hope despite trade conflict and tariffs!

The DAX recorded an increase of 3.1% on Wednesday, but this was initially followed by a decline of 1% on Thursday. The Euro Stoxx 50 also fell 1% in the opening. The US government, meanwhile, is considering reducing tariffs on Chinese imports, which is being interpreted as a step to de-escalate the trade conflict. On Thursday, the DAX ended trading up 0.5%, closing above 22,000 points, while the Euro Stoxx 50 rose 0.3%. President Trump reported talks between the US and China to end the trade war, while China may consider suspending tariffs on certain US products, including medical devices and industrial chemicals.

Asian stock markets, including the Nikkei 225, CSI 300 and Hang Seng Index, also showed a positive trend. The pre-market DAX indication was also in the green. Despite these positive developments, caution remains advised as the news situation can change quickly. According to the ifo business climate index, it surprisingly rose from 86.7 to 86.9 points in April, which was the fourth increase in a row. However, business expectations fell slightly from 87.7 to 87.4 points, while the situation assessment reached 86.4 points, the highest level in eight months tagesschau.de reported.

Detailed insights into the ifo business climate index

The ifo survey, based on responses from around 9,000 executives, showed that companies' expectations were slightly dampened due to higher US tariffs. Despite these difficulties, Commerzbank economist Ralph Solveen expressed hope for a revival of the German economy. An LBBW analyst, Elmar Völker, described the current situation as a “small light at the end of the tunnel”. However, Ifo President Clemens Fuest warned of increasing uncertainty among companies. Alexander Krüger, chief economist at Hauck Aufhäuser Lamp Privatbank, also highlighted the high uncertainty component of the customs dispute.

In addition, KFW chief economist Dirk Schumacher noted that without the hope of an agreement in the trade conflict, the decline in the ifo index would have been more significant. The purchasing managers' index for the private sector fell to 49.7 points in April, which is below the growth threshold of 50 points. This decline is seen as a sign of a possible recession, driven by concerns about tariffs and general uncertainty. The DAX was cautious in relation to the ifo index and continued to be in the red, while the euro rose to a daily high of $1.1392 after the ifo data was published.