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Meanwhile, auto stocks benefited from the shift in tariff sentiment. Volkswagen led the gains, rising 0.80%. BMW, Mercedes-Benz Group, and Porsche also trended higher.
US Markets Mixed as Trade War Risks Linger
US equity markets opened the week on a mixed note as investors considered tariff-related developments. The Nasdaq Composite Index rose 0.10%, while the Dow and the S&P 500 dropped 0.91% and 0.23%, respectively, extending their losses from Friday.
Initial reports of a potential 90-day delay to the scheduled April 9 tariffs triggered a broad-based market rally. However, President Trump dismissed the news, confirming his intent to proceed, impacting risk sentiment. Trump also warned China against its 34% counter-tariff measures, threatening an additional 50% in duties if Beijing failed to back down by Tuesday, April 8.
Near-Term Outlook
The DAX’s trajectory remains sensitive to tariff headlines, central bank guidance, upcoming US inflation data:
- Bearish Scenario: Rising US-EU trade tensions, hotter US inflation, and hawkish central bank stances could push the DAX toward 19,500.
- Bullish Scenario: De-escalating trade tensions, softer US inflation, dovish central bank commentary could drive the DAX toward 20,500.
DAX Technical Indicators
Daily Chart
The DAX opened below its 50-day and 200-day Exponential Moving Averages (EMA) on April 8, suggesting bearish momentum.
A break above 20,150 could signal a move toward the 200-day EMA. A sustained move through the 200-day EMA may enable the bulls to target 20,500.
On the downside, a drop below 19,675 could suggest a further decline toward 19,500, potentially opening the path to sub-19,000.
With the 14-day Relative Strength Index (RSI) at 27.78, the DAX sits in oversold territory (RSI< 30). Buying pressure could intensify around Monday’s low of 18,490.
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