DAX Falls Below 24,000 as US Labor Market Report Takes Center Stage

The DAX is expected to fall below 24,000 points on Friday due to mixed business figures from German companies and sobering signals from US monetary policy. Strong quarterly figures from US tech giants Microsoft and Meta were not enough to push indices into positive territory. The focus will be on the US labor market report, which is expected to be strong and dampen expectations of interest rate cuts by the US Federal Reserve. Only a weak labor market report could open the door for an interest rate cut in September.

The German DAX index is anticipated to fall below the 24,000-point mark on Friday, August 1, according to recent market forecasts. This decline is primarily attributed to mixed business figures from German companies and sobering signals from US monetary policy [2].

On Thursday, the DAX futures slid 140 points, with the index expected to start the new trading month on a rather weak note. Broker IG predicted a decline of 0.42 percent to 23,964 points, with a week-long forecast pointing to a 1 percent decline [2]. This downward trend is influenced by the current reporting season, where European companies have shown slower earnings per share growth compared to their US counterparts [2].

Strong quarterly results from US tech giants Microsoft and Meta were not sufficient to push indices into positive territory on the New York stock market. While Microsoft shares rose to push the software giant's valuation past the $4 trillion mark, the overall market sentiment remained cautious [3].

The focus on Friday will be on the US labor market report, scheduled for 2:30 p.m. The report is expected to be strong, potentially dampening expectations of interest rate cuts by the US Federal Reserve. Portfolio manager Thomas Altmann of asset manager QC Partners noted that strong wage growth could be a second source of renewed inflation, alongside tariffs [2].

Only a weak labor market report could open the door for an interest rate cut as early as September. The DAX's near-term outlook and recovery path will also be influenced by Eurozone inflation and the US Jobs Report [1].

References:
[1] https://www.fxempire.com/forecasts/article/dax-index-news-forecast-turns-bearish-on-hot-inflation-and-fed-rate-cut-doubts-1537980
[2] https://www.marketscreener.com/news/dax-flash-dax-expected-to-fall-below-24-000-points-ahead-of-us-labor-market-report-ce7c5fd2da8ff52c
[3] https://www.usatoday.com/story/money/markets/2025/07/31/us-stocks-earings-trade-fed-thursday/85449894007/