The DAX recorded a remarkable price increase of around 20 to 22 percent in the first half of 2025, marking the best first half since 2007 and placing the German stock market clearly ahead of other major indices such as the Euro Stoxx 50 and the S&P 500.
Reasons for the Strong Increase
This robust performance is primarily driven by a combination of massive government spending in Germany – particularly for defense and infrastructure – as well as a more optimistic trade climate. Hopes for a swift resolution in the transatlantic trade dispute further contribute to the positive sentiment.
Technical Analysis and Outlook
This development is significant for private investors. Historical data from technical analysis shows that the DAX, after a strong first half with price gains of over 10%, was able to continue rising in the second half in about 71% of cases, averaging an additional gain of around 7 percent. This indicates ongoing opportunities for further profits.
Several DAX companies particularly benefited from these conditions:
- Rheinmetall as a top performer surged by nearly +185%, driven by high demand for armaments due to geopolitical tensions and increasing defense budgets.
- Other beneficiaries include companies from the utility, financial, and industrial sectors, which benefit from government investments.
However, there are also losers, such as Porsche (-27%), whose weak demand has weighed on them.
Risks and Opportunities
The stock market boom is supported by expansive government spending, which carries risks: Political uncertainties in the U.S. or a potential slowdown in economic growth could jeopardize the positive momentum. Nevertheless, the environment for German stocks remains very attractive at present.
For private investors, this means:
- Good chances for further price gains this year.
- The importance of selective selection of benefiting sectors (e.g., defense, infrastructure).
- Vigilance regarding political and economic risks.
Germany’s record investments therefore positively impact many DAX companies and offer private investors attractive prospects despite certain uncertainties.