Wall Road Beneficial properties Regardless of US Downgrade
Wall Road posted beneficial properties on Might 16, amid easing US-China commerce tensions. The Nasdaq Composite Index gained 0.52%, whereas the Dow and S&P 500 rose 0.78% and 0.70%, respectively.
Financial information despatched gloomy alerts. Whereas shopper sentiment weakened, one-year inflation expectations unexpectedly jumped 6.5% in April to 7.3% in Might, testing bets on a Q3 2025 Fed fee lower. The mix raised stagflation considerations because the Fed continues sending fee maintain alerts.
In the meantime, Moody’s downgraded the US credit standing from Aaa to Aa1, impacting danger sentiment by denting demand for danger property.
Fed Audio system in Focus
Within the Might 19 US session, Fed audio system will probably be in focus. Views on the labor market, inflation, and tariffs might give insights into the Fed’s rate of interest outlook. Assist for a Q3 2025 fee lower might increase demand for danger property, whereas hawkish rhetoric might strain rate-sensitive shares.
Whereas US labor market information has proven resilience, inflationary pressures have softened.
Past the info, commerce headlines stay a key driver for danger urge for food, particularly for the DAX.
DAX Outlook: Commerce and Central Banks to Dictate Tendencies
The DAX’s short-term outlook is dependent upon a number of elements, together with commerce developments, financial information, company earnings, and central financial institution steering.
- Bullish Case: Easing commerce tensions, optimistic earnings, upbeat US information, and dovish central financial institution rhetoric might ship the DAX towards the Might 12 excessive of 23,912.
- Bearish Case: Rising commerce friction, weak earnings, disappointing information, or hawkish central financial institution chatter might ship the DAX towards 23,000.
As of Monday morning, the DAX futures had been up by 7 factors, whereas the Nasdaq 100 mini slid 252 factors, suggesting a cautious begin.
Technical Setup Suggests Cautious Optimism
After Friday’s beneficial properties, the DAX stays effectively above the 50-day and the 200-day Exponential Shifting Averages (EMA), indicating bullish momentum.
- Upside Goal: A break above the Might 16 excessive of 23,887 would allow the bulls to focus on the file excessive of 23,912. Rising shopping for strain might sign a transfer towards 24,150.
- Draw back danger: A break beneath 23,750 might convey 23,500 into play, with 23,000 as the following key help.
The 14-day Relative Energy Index (RSI) at 68.17 signifies the DAX has room to climb towards 23,912 earlier than getting into overbought territory (RSI > 70).
