DAX on Track to Reach New Record High Amidst US Trade Dispute Uncertainty

The DAX is on track to reach its record high of 24,479 points, set in early June. IG estimates the index at 24,235 points, a 0.1% increase, which would extend the weekly gain to nearly 2%. The index recently broke its correction trend from the record high on the price chart, despite ongoing trade tensions with the US. The deadline for new tariffs has been postponed to August 1.

The DAX index has shown resilience, breaking its correction trend from the record high set in early June. As of July 8, the DAX gained 0.24%, with tech stocks like Infineon and SAP contributing to the increase [1]. Despite ongoing trade tensions with the U.S., the index is now estimated to reach 24,235 points, a 0.1% increase, extending the weekly gain to nearly 2% [2].

The positive sentiment around the DAX can be attributed to several factors. Firstly, there is hope for a potential US-EU trade deal, which could maintain a 10% baseline tariff on EU goods with exceptions for sectors like aircraft and spirits [1]. Additionally, the U.S. has delayed the return of tariffs until August 1, providing some relief to European exporters [1].

However, the DAX's performance is also influenced by sector-specific developments. Tech stocks have been a significant driver of the index's gains, while carmakers have faced uncertainty due to potential US auto tariff exemptions [1]. German exports slid 1.4% in May, while imports plunged 3.8%, widening the trade surplus to €18.4 billion [1].

On the global trade front, the U.S. has broadened its tariff war, announcing a 50% tariff on copper imports and threatening new duties on semiconductors and pharmaceuticals [2]. Japan and South Korea are scrambling to minimize the impact of these tariffs, with Japan seeking concessions for its large automobile industry and South Korea intensifying trade talks [2].

The U.S. has also extended its tariff deadline for several countries, including the EU, to August 1. This delay provides more time for negotiations but also adds uncertainty to the global trade landscape [2]. The EU is aiming to strike a deal before this deadline, with potential concessions for key export industries like aircraft and medical equipment [2].

In summary, the DAX's recent performance reflects a mix of sector-specific gains, trade deal hopes, and global trade uncertainty. As the deadline for new tariffs approaches, investors will continue to monitor developments in the U.S.-EU trade negotiations and their potential impact on the European economy.

References:
[1] https://www.fxempire.com/forecasts/article/dax-index-news-forecast-eyes-24500-as-tech-gains-and-tariff-talks-lift-sentiment-1531855
[2] https://www.reuters.com/world/asia-pacific/japan-south-korea-seek-soften-tariff-blow-before-august-deadline-2025-07-08/