The German DAX index opened Wednesday’s trading session with gains, driven by concerns surrounding international trade dynamics. Shortly after 9:30 AM, the leading index was calculated at approximately 23,735 points, a 0.3 percent increase compared to the previous day’s closing level. Shares of BMW, Mercedes-Benz and Infineon led the gains, while Rheinmetall, Qiagen and Zalando experienced declines.
Jochen Stanzl, Chief Market Analyst at CMC Markets, attributed the market’s sensitivity to increasingly assertive trade rhetoric from the United States. “The market is feeling the direct impact of a tougher tone in trade discussions” he stated, noting the DAX’s difficulty maintaining distance from the 24,000-point mark. “The initial optimism following the ceasefire in the Middle East has given way to concerns about a potentially prolonged trade war.
Investors are keenly focused on the impending deadline of July 9th, pertaining to reciprocal tariffs. Every statement originating from both the US presidency and the European Union is being closely scrutinized, as they may provide insight into the future trajectory of trade relations between the two major economic partners. “The prevailing expectation is that President Trump will likely apply pressure before ultimately seeking a deal, although this outcome remains uncertain. This inherent unpredictability compels investors to adopt a wait-and-see approach.
Despite these concerns, Stanzl emphasized that local investors have not adopted a particularly pessimistic outlook, citing the perspective of impending government investments and reduced interest rates from the European Central Bank. “The trade deadline is viewed as a temporary obstacle within a fundamentally positive upward trend”. Market participants are now anticipating a signal from the White House indicating an extension of the deadline, allowing for further negotiations. Such a signal would likely trigger renewed gains in the stock market.
The euro weakened slightly this Wednesday morning, trading at $1.1782, with a dollar fetching €0.8488.
Meanwhile, oil prices saw a slight decline; a barrel of Brent North Sea crude was priced at $67.03 around 9 AM German time, a decrease of 8 cents, or 0.1 percent, compared to the previous trading day’s close.