Why the DAX is rising and what that means for investors - financial expert explains

Why the DAX is rising and what that means for investors - financial expert explains

According to a report by www.n-tv.de Stock market prices have risen sharply and the German leading index DAX has seen double-digit gains since October. The DAX is approaching its previous record high and is now just under one percent away from it. The reason for the price gains lies in speculation that the central banks' interest rate increases have ended and that there may even be interest rate cuts in the next few months.

Inflation in the Eurozone and the US is showing signs of falling, while economic activity is slowing in both regions. This suggests that central banks could cut interest rates in the future. This prospect of falling interest rates typically has a positive impact on the stock market, as lower interest rates stimulate the economy and make stocks more attractive compared to interest-bearing investments. In particular, export-oriented indices like the DAX and technology-heavy indices like the Nasdaq have seen strong gains recently.

Despite the positive development, the European Central Bank warns against a premature interest rate cut and emphasizes that there is still no reason to give the all-clear. Nevertheless, it is expected that the ECB could initiate the interest rate turnaround next year, while the USA may follow later.

Markets are already reacting to this possibility, and senior central bankers are preparing investors for possible interest rate cuts. Experts agree that further developments depend on the economic data that will be published in the coming weeks. The labor market data in particular could provide information about further interest rate policy.

Based on this information, it is likely that the positive trend on the stock markets will continue if the economic data confirms expectations. The prospect of falling interest rates could continue to boost the stock market, especially the DAX and the Nasdaq. However, investors should pay close attention to interest rate policy and economic developments as these can have a material impact on the market.