Dax Index News: Forecast Bearish as US Inflation, ECB, and Trade Risks Intensify Today

DAX Extends Losses as US-China Talks Enter Day Two

The DAX slid 0.77% on Tuesday, June 10, adding to Monday’s 0.08% loss to close at 23,987. Notably, the index closed below 24,000 for the first time since June 2.

The US and China entered a second day of trade negotiations on June 10, fueling uncertainty about a trade deal. Silence on progress toward a deal left investors cautious, pressuring DAX-listed stocks. Updates from Tuesday’s talks were scant. Investors brushed aside early comments from US Treasury Secretary Howard Lutnick, who stated talks were going well.

Auto Stocks Rally as Trade Talks Progress

Despite overall market caution, auto stocks rallied on optimism about eventual trade progress. Porsche and Volkswagen climbed 1.25% and 1.16%, respectively. Daimler Truck Holding, BMW, and Mercedes-Benz Group also posted gains.

In contrast, defense stocks faced heavy selling pressure. Rheinmetall slid 5.8%, while MTU Aero dropped 1.75%, potentially succumbing to profit-taking.

Trade Developments and Court Rulings in Focus

On Wednesday, June 11, investors will respond to overnight updates from the high-level US-China trade negotiations. US and Chinese negotiators agreed to a framework to reinforce the trade truce and ease tensions between the two economic powerhouses.

Commerce Secretary Lutnick stated:

“The two largest economies in the world have reached a handshake for a framework. We’re going to start to implement that framework upon the approval of President Trump and the Chinese will get their President Xi’s approval, and that’s the process.”

While the lack of a meaningful trade deal will disappoint markets, an agreement to de-escalate was a positive sign.

However, an overnight US Federal Court ruling may dampen sentiment as the clock on the 90-day pause on Trump’s tariffs ticks away. The Kobeissi Letter reported:

“A Federal Appeals court has granted the Trump administration’s request to keep President Trump’s tariffs in effect. However, the court will be fast-tracking its consideration of the case on whether tariffs are legal.”

Wall Street Advances on Trade Deal Hopes

US markets posted gains on June 10. Although a full deal remains elusive, markets reacted positively to signs of de-escalation. The Nasdaq Composite Index and the S&P 500 rose 0.63% and 0.55%, respectively, while the Dow ended the session up 0.25%. Notably, Tesla (TSLA) shares rallied 5.67%, reflecting sentiment toward trade talks.

US CPI Report in Focus

Later in the European session on Wednesday, June 11, the US CPI Report will influence market sentiment. Economists forecast the annual inflation rate to rise from 2.3% in April to 2.5% in May and for core inflation to hit 2.9% (April: 2.8%).

Hotter-than-expected inflation figures could further dampen Fed rate cut bets, impacting risk assets, including the DAX. Conversely, softer prints may revive hopes of a Q3 Fed rate cut, boosting risk sentiment.

US-EU Trade Headlines and the DAX

As markets await further details from US-China trade talks, US-EU trade developments also require consideration. Upbeat news could drive demand for DAX-listed stocks, while renewed tensions may extend the DAX’s losses.

Outlook: Key Catalysts for the DAX

The DAX’s near-term outlook depends on the US inflation, trade developments, and ECB commentary.

• Bullish Case: Positive trade headlines, lower US inflation, and dovish ECB cues could send the DAX toward 24,500.
• Bearish Case: Renewed trade tensions, hotter US inflation, or hawkish ECB signals may pull the DAX toward 23,750.

As of Wednesday morning, the DAX futures were down by 155 points, while the Nasdaq 100 mini dropped 64 points, signaling a challenging start to the mid-week session.

Technical Setup Suggests Cautious Optimism

Despite Tuesday’s loss, the DAX remains above the 50-day and the 200-day Exponential Moving Averages (EMA), indicating underlying bullish momentum.

• Upside Target: A breakout above 24,000 could support a move to the June 5 record high of 24,479, with 24,750 the next key resistance level.
• Downside risk: A break below 23,750 brings the May 23 low of 23,275 and the 50-day EMA into play.

The 14-day Relative Strength Index (RSI), at 56.59, indicates the DAX has room to revisit 24,479 without entering overbought territory (RSI > 70).

Conclusion: Eyes on Inflation, the ECB, and Trade Headlines

Traders should closely track trade developments, the US inflation data, and ECB rhetoric for guidance.

Explore our exclusive forecasts to assess whether improving trade sentiment could lift the DAX to new highs. Refer to our latest forecasts and macro insights here for further analysis, and consult our economic calendar.