Dax Index News: Tariff Fears and Middle East Tensions Weigh on Forecast Today

Investors on Edge: Trump’s Tariff Threat and Middle East Tensions Hit Risk Assets

Markets reeled as Trump reignited tariff tensions overnight. The DAX fell 0.8% to 23,758 in early trading on Thursday, June 12. Citing reports from major news agencies, The Kobeissi Letter reported:

“President Trump says he will send letters to trading partners in the next 1-2 weeks settling unilateral tariffs. This will be ahead of the July 9th deadline to reimpose higher tariffs on dozens of countries.”

Trump also shared details of a one-sided trade agreement with China. According to Trump, China agreed to 55% tariffs on Chinese goods and committed to lifting export restrictions on magnets and rare earth minerals. In contrast, US exports to China would remain subject to a 10% tariff.

These terms aligned with prior agreements made in Geneva, with Trump stating that further discussions with Chinese President Xi Jinping are expected.

Simultaneously, escalating tensions in the Middle East further dampened risk appetite.

Sector Performance

Trump’s latest tariff threat sank auto and tech stocks. BMW and Mercedes-Benz Group slid 1.21% and 1.07%, respectively. BMW, Porsche, and Volkswagen also posted early losses.

Infineon Technologies and SAP dropped 1.28% and 1.39%, respectively.

Meanwhile, Rheinmetall advanced 1.53% as investors monitored rising tensions in the Middle East.

Wall Street Drops as Middle East Tensions Flare Again

US markets came under pressure on June 11 as Middle East tensions resurfaced. The Nasdaq Composite Index and S&P 500 dropped 0.50% and 0.27%, respectively, while the Dow ended flat.

Earlier, a softer-than-expected US CPI report boosted demand for risk assets during the European session. The annual inflation rate rose from 2.3% in April to 2.4% in May, while core inflation remained at 2.8%. Economists expected headline inflation of 2.5% and underlying inflation of 2.9%.

However, news of Iran threatening to strike US bases in the region if nuclear agreement talks fail reversed investor optimism. The US reportedly began evacuating its embassy in Iraq, raising fears of an imminent attack. Israel heightened concerns by declaring it is fully prepared to attack Iran.

Focus Turns to US Producer Prices and Jobless Claims

Later in the session on Thursday, June 12, producer prices and labor market data will draw interest. Economists forecast a 2.6% year-on-year rise in producer prices in May, up from 2.4% in April. As a leading inflation indicator, rising prices may signal increasing demand and potentially delay Fed rate cut bets, impacting risk assets. However, softer readings may boost risk appetite.

Labor market data is also crucial for the Fed. Economists expect initial jobless claims to drop from 247k (week ending May 31) to 240k (week ending June 7). A larger fall may ease concerns about the labor market, while a spike above 250k might reignite recession fears, weighing on risk assets, including the DAX.

Near-Term Outlook

The DAX’s near-term outlook hinges on US economic data, trade headlines, Middle East updates, and ECB policy signals.

• Bearish Scenario: Hotter US producer prices, intensifying trade tensions, further Iran-Israel friction, or hawkish ECB rhetoric could drag the index toward 23,750.
• Bullish Scenario: Easing geopolitical risks, favorable US data, and dovish ECB cues may lift the DAX toward 24,500.

DAX Technical Indicators

Daily Chart

Despite a four-day losing streak, the DAX remains above the 50-day and 200-day Exponential Moving Averages (EMA), indicating underlying bullish momentum.

A break above the June 4 record high of 24,346 would pave the way to 24,750, with 25,000 as the next resistance level.

On the downside, a break below 23,750 may expose support at the 23,500 level, with the 50-day EMA as the next major support level.

The 14-day Relative Strength Index (RSI) at 50.76 suggests the DAX could climb to 24,500 before entering overbought conditions (RSI > 70).

Final Thoughts

Volatility may persist as investors weigh trade developments, US economic data, ECB commentary, and geopolitical headlines. Any fiscal policy developments from Berlin could further influence sentiment toward DAX-listed stocks.

Traders should stay attuned to technical and fundamental drivers and consult our economic calendar.