German DAX index risks losing over 5% by year-end amid trade confrontations with US

The German DAX index, which reflects the performance of Europe’s largest economy, could lose 5.1% by the end of this year, according to the forecast of analysts polled by Reuters. That said, the index hit a record high in May, rising above 24,300.

Analysts note that the DAX has demonstrated impressive results by surging more than 20% since the start of 2025. However, persistent trade tensions between the US and the EU cloud the outlook for further gains of the German stock index. Investors are cautious in their long-term projections, given the possibility of new tariffs. 

Marco Vailati of Cassa Lombarda believes much of the positive expectations have already been priced in. Besides, the euro’s strengthening poses additional challenges for export-oriented German companies, whose performance has a significant impact on the DAX. This weighs on the index, limiting its growth potential in the coming months.