Investors leave the US markets and massively reorient their portfolios to European funds, equities, and government bonds amid the announcement of US tariffs and subsequent turmoil in global markets.
Investors leave the US markets and massively reorient their portfolios to European funds, equities, and government bonds amid the announcement of US tariffs and subsequent turmoil in global markets.
German equities started this week in the red as Donald Trump showed no signs of changing his decision on import duties that could lead to a global recession. The DAX was down 4.26% and hit a new three-month low on Monday at the close of trading in Frankfurt.
European shares fell and the DAX index confirmed a correction as China's retaliation to sweeping US tariffs heightened investor concerns over a global recession. Besides, a gauge of euro zone stock market volatility surged 8.68 points to 34.2.
European stock markets extended their losses Thursday morning following US President Donald Trump’s stronger-than-expected trade tariffs announcements targeting dozens of trading partners, CNBC reports.
US investors poured a record $10.6 billion into exchange-traded funds (ETFs) focused on European equities in the first quarter of this year, according to BlackRock.
The DAX surged 1.7% on April 1, snapping a four-day losing streak, as Eurozone inflation cooled and business confidence improved. However, significant tariff risks persist. A potential 25% US levy on auto imports could stifle the DAX's momentum and severely impact German exporters.
European stocks are outperforming US markets as transatlantic trade tensions grow, boosting the region's appeal to investors. The DAX 40 has surged 13% year-to-date, outpacing the volatile S&P 500 amid tariff concerns.
Major asset managers, including Europe's Amundi, plan to scale back euro-long positions and reduce bullish bets on EU equities, Reuters reports. The move follows retaliatory US import tariffs imposed on the region in early April.
The DAX index on the Frankfurt Stock Exchange fell more than 1.5% on Thursday, dropping below 22,900 points. The main pressure on the market came from automakers’ shares, which declined after American President Donald Trump announced a plan to impose 25% duties on imported cars.
European markets closed higher on Tuesday as investors were relatively optimistic about US President Donald Trump's trade policies. The German stock index DAX topped the regional gains, climbing by 1.13%. Such a rise was driven by improved business sentiment in the country, CNBC reports.
The DAX 40 began Tuesday's trading session up 0.69%, ignoring the release of German business confidence data. Despite positive expectations, the Ifo Business Climate Index for March was only moderately higher than the previous month's reading — 86.7 vs. 85.3.
The DAX (Deutscher Aktienindex) Index is the main stock market indicator of Germany, which reflects the performance of the largest companies of the country. It represents 40 leading German corporations listed on the Frankfurt Stock Exchange. The financial instrument is considered to be a key gauge of the economic health in the Federal Republic of Germany and the Eurozone.
Major factors that determine the value of DAX:
A rise in the DAX indicates that investors are optimistic and confident, while a fall could be a warning sign of a potential recession or crisis.
This index is used for both long-term investing and short-term trading. To forecast its dynamics accurately, it is important to take into account macroeconomic statistics, corporate reporting, and global market trends.