DAX 40 Eyes Record on Rotation Away from US Tech

Germany's DAX 40 is within a hundred points of its all-time high, as cheaper oil and a stumble in US tech tilt the balance towards Europe's biggest economy.

The index had been trading around 26,600 as of Wednesday morning, up about 1% on the day and roughly 5.5% over the past month. Over the same stretch the Nasdaq 100 has lost about 10%, as a hot US inflation report and hawkish Fed talk pile pressure on big tech.

Latest Market Moves

• The DAX 40 rose as much as 1.4% to 26,633 on Tuesday before fading to close up 0.3% at 26,347, then jumped back towards the 26,600 area in early Wednesday trade. The record stands at 26,692.90, set on 5 November.

• The Nasdaq 100 fell 0.6% to 27,741 on Tuesday, leaving it down about 10% over the past month.

• The German 10-year Bund yield had eased to around 3.29%, while the US 10-year Treasury yield was sitting at 5%.

• The Euro Stoxx 50 was up about 1% near 6,390 on Wednesday morning, with the Stoxx 600 trading close to its August record.

US Tech Stumbles as Rate Hike Bets Build

The pressure on Wall Street is coming from interest rates as much as from AI.

US consumer prices rose 0.4% in October against expectations of 0.3%, with core prices up 0.3% versus a 0.2% forecast. Fed Governor Christopher Waller said he is "leaning toward" a rate hike in December, and Dallas Fed President Lorie Logan said the Fed will need at least two more quarter-point increases.

That pushed the 10-year Treasury yield back above 5% intraday on Tuesday, a tough backdrop for richly valued growth stocks. Tech was already on the back foot after the Democrats' sweeping midterm wins stoked fears of tighter AI regulation and slower data centre expansion, which helped knock the DAX down 1.9% last Friday.

Germany's AI Winners Keep Delivering

The DAX isn't avoiding AI so much as owning a less crowded corner of it.

Infineon, which makes the power chips that run data centres, guided on Tuesday for fiscal 2027 revenue of around €20 billion, up from €16.35 billion in fiscal 2026. The shares rose as much as 7% to €52.06 before closing up 0.9% at €49.05, then climbed around 5.7% in early Wednesday trade after the company announced a buyback of up to €450 million.

Chief executive Jochen Hanebeck said he expects a significant increase in revenue and profitability next year, singling out data centre power supplies, energy infrastructure and electric vehicles. That gives the DAX a slice of the AI spending boom without the stretched valuations of the US megacaps.

Cheaper Oil Takes the Heat Off

Falling crude has been the biggest single lift for German stocks this week.

Brent fell more than 5% on Monday to $92.80 after President Trump said renewed military strikes on Iran were "highly unlikely" while talks to end the eight-month conflict continue. The DAX gained 1.7% that day, with Infineon, Siemens Energy and Commerzbank among the leaders.

Germany is a heavy energy importer, so lower oil eases the squeeze on manufacturers, chemicals makers and households alike. It matters for the ECB too, with eurozone inflation at 4% in October and chief economist Philip Lane warning that "the energy price shock is going to spill over into other areas; our job is to contain that." Brent was edging higher on Wednesday after fresh tanker attacks in the Strait of Hormuz, a reminder that the relief could be fragile.

German Data Improves as Bund Yields Ease

The domestic picture is also looking less gloomy.

German exports rose 2% in September, beating forecasts of 0.5% and marking the fastest rise since February, while industrial production grew 0.7% when economists had expected no change. The data adds to signs that Germany's industrial slump is starting to turn.

The German 10-year Bund yield has eased from around 3.46% a month ago to roughly 3.29%, even as US yields push higher. With the Fed leaning towards hikes and the ECB on hold since October, the policy gap is moving in Europe's favour, and a softer euro, around 1.1150 against the dollar, gives exporters a further boost.

Earnings Give the Rally Some Substance

Earnings season is giving the rally something solid to stand on.

Financials have done much of the heavy lifting, with Allianz up about 5% and Deutsche Bank up about 9% over the past week. Siemens reports on Thursday, and its shares were up around 2% in early trade ahead of the numbers.

Not every heavyweight is joining in. Defence group Rheinmetall remains a drag, down more than 46% so far this year.

DAX 40 Technical View

The weekly chart shows the DAX pressing against the top of a rising wedge.

The upper trendline joins the July 2025 high of 24,639, January's 25,508 peak and August's 26,619 high, and now sits close to 27,000. The lower line runs from the April 2025 low of 18,490 through the March 2026 low of 21,864 and is now near 24,100. With the two lines converging, the pattern often signals a rally that is losing steam.

The weekly RSI, at around 62, has also made a series of lower highs since mid-2025 even as the index has pushed to new peaks, a bearish divergence.

A weekly close above the 26,692.90 record would open the way to the top of the wedge near 27,000.

On the downside, last week's low of 25,617.54 is the first support. Below there, the 24,640 to 24,830 zone stands out, where the 2025 highs capped the index before turning into support at October's low.

Source: SpreadEx | DAX 40, Weekly Chart