Frankfurt's Benchmark Clings to 23,954 as Oil Surge and Inflation Data Override Earnings Cheer

Germany's DAX fell for an eighth straight day, its worst run since the pandemic, as Brent crude spiked 5.7% and German inflation hit 2.9%, overshadowing strong earnings from Adidas and Thyssenkrupp.

The DAX extended its losing streak to eight consecutive sessions on Wednesday, a run not seen since the depths of the pandemic, as a spike in crude prices and hotter-than-expected German inflation data wiped out early gains driven by strong corporate results. Germany's blue-chip index closed at 23,954 points, down 0.27 percent, after briefly reclaiming the psychologically significant 24,000 mark at the open.

Brent Breaks Higher, Inflation Adds Pressure

The session took a decisive turn in the afternoon when Brent crude surged more than 5.7 percent to hit $117.76 a barrel — its highest level in a month. The catalyst was a fresh escalation in Middle East tensions, with the US issuing new threats against Iran. That sent energy-intensive sectors and consumer stocks into reverse.

Compounding the pressure, Germany's April consumer price index came in at 2.9 percent year-on-year, reigniting fears that the European Central Bank's rate-cutting cycle may proceed more slowly than markets had anticipated. The combination of higher input costs and sticky inflation proved too much for the index to sustain its morning momentum.

The DAX touched a session high of 24,110 points in early trading before the mood soured, eventually plumbing a low of 23,919 points. Technically, the benchmark now sits just above its 50-day moving average of around 23,874 points, with the relative strength index at 46 — a neutral reading that offers little directional clarity. The 200-day average at 24,113 points looms as the next meaningful resistance level.

Adidas and Thyssenkrupp Shine as Bank Stocks Sink

The divergence between winners and losers was stark. Adidas stormed to the top of the index, jumping 8.35 percent to €149.30 after reporting currency-adjusted revenue growth of 14 percent in the first quarter, with its apparel division surging 24 percent. The sportswear giant also posted operating profit of €705 million, well ahead of analyst forecasts.

Scout24 added 6.7 percent, Infineon climbed 5.5 percent and Airbus rose 5.1 percent. Outside the DAX, Thyssenkrupp vaulted roughly 10 percent after Finnish elevator maker Kone confirmed it would acquire TK Elevator, valuing the division at €29.4 billion.

On the losing side, Hannover Rück fell 3.09 percent and Munich Re dropped 2.61 percent. Deutsche Bank shed 1.83 percent, having been down more than 3.5 percent intraday, as higher provisions and weak quarterly details prompted profit-taking despite the lender reporting a net profit of €1.9 billion that beat consensus estimates. Porsche slipped 0.7 percent after reporting a 22 percent decline in operating profit, while Mercedes-Benz lost 0.5 percent on the back of a 17 percent drop in EBIT, driven largely by weakness in China.

Fed Decision and Tech Earnings Set the Tone for Thursday

All eyes now turn to Washington, where the Federal Reserve is widely expected to hold interest rates steady in the 3.5 to 3.75 percent range. All 103 economists surveyed expect no change, meaning the market's focus will be squarely on chair Jerome Powell's press conference for clues about the future path of policy. Any signal that the Fed intends to maintain a restrictive stance in the face of persistent inflation could keep the DAX under pressure.

Adding to the cross-currents, the US tech heavyweights Alphabet, Microsoft, Meta and Amazon all report earnings after the New York close, with their results likely to set the tone for global equity markets. Airbus also publishes detailed quarterly figures on Thursday. How Frankfurt opens will depend heavily on the interplay between Powell's commentary, the tech earnings deluge and the ongoing geopolitical risk premium baked into oil prices.