The DAX made a significant recovery rally on Wednesday, rising by more than three percent to 21,977 points, which corresponds to an increase of over 650 points compared to the previous day. This brought the German leading index to its highest level since early April and nearly to the level before the recent tariff announcements from the USA.
Factors of the Recovery Rally
This positive development was significantly supported by five factors:
- Relaxation in the tariff dispute between China and the USA: Positive signals from the trade conflict fostered optimism in the markets. US President Donald Trump expressed himself “very nicely” towards China and announced that tariffs would not completely disappear but would be significantly reduced.
- Trump’s mild words towards Fed Chief Jerome Powell: After heavy criticisms in the previous days, Trump stated he had no intention of dismissing Powell. This reassurance also positively affected the mood.
- Strong cues from Wall Street and Asian markets: The international stock markets showed robustness, which also provided tailwind for the DAX.
- Convincing quarterly results from SAP: The DAX heavyweight SAP presented strong results for the first quarter with profit and margin increases exceeding expectations. The stock then rose by about 8 to 9 percent, significantly contributing to the overall index increase.
Overall, the rally reflects a significant recovery after the panic phase in early April; since then, the DAX has gained about 16 percent. The combination of positive corporate figures from SAP and hopes for de-escalation in the US tariff dispute are the main drivers of this upward movement.
In summary, it can be said: The DAX is rising strongly thanks to positive signals regarding US tariff policy and a price jump at SAP – a sign of improved market sentiment after weeks of increased uncertainty due to the trade conflict between China and the USA.