DAX 40

Key insight

The DAX is caught between a structural bull case (European rearmament spending, AI infrastructure demand, ECB easing cycle) and a live bear threat: the ECB has explicitly flagged a potential September rate hike just as elevated oil prices from the Iran conflict risk reigniting second-round inflation.

The DAX is rebounding +0.89% to 24,929 on Friday but remains ~4% below its July 6 all-time high of 25,900, trapped in a consolidation range as the ECB holds rates with a hawkish tilt and Middle East-driven oil inflation clouds the macro outlook.

Main risk

ECB September Rate Hike Risk

ECB held rates on July 24 but left the door explicitly open to a hike in September, with policymakers warning that the full inflationary impact of the recent oil/energy shock from the Iran conflict has yet to materialise — a reversal of the easing cycle would directly reprice German equity valuations.