Background and Causes
The recent dramatic losses in the DAX are primarily attributable to the escalating trade disputes between the USA and other countries. The new tariff policy of the USA has triggered a chain of global reactions. China has initiated countermeasures, and the EU is also planning retaliatory tariffs on US products that could come into effect in mid-April.
For Germany, whose economy is highly export-oriented, the tariffs could diminish demand for German products in the USA, as consumers may opt for domestic or alternative products.
Market Development
The DAX has lost significant ground in recent days. It opened trading on Monday with a loss of about 10%, recovering slightly to 4.80% at midday at 19,651.66 points.
In technical analysis, the DAX has fallen below the important 200-day moving average line, which is considered a negative signal for the long-term trend. Further declines could lead to serious psychological thresholds.
Other global markets are also affected, with significant losses in Asia, the USA, and the EuroStoxx 50.
Impact on Investors
Private investors are forced to reconsider their investment strategies. The resulting uncertainty in the markets makes investments risky, as a falling market jeopardizes potential profits.
The trade disputes heighten economic uncertainty. Long-term effects are unclear, contributing to investors’ nervousness.
Future Prospects
Some analysts suspect that the market is oversold, which may indicate a potential recovery. Nonetheless, a sustainable recovery is unlikely without a relaxation of trade relations.
The reactions of the affected countries and future political developments will be crucial for market direction.