DAX Puts Fed Hawks on Hold as Iran Deal Fuels Rally Toward Record

The DAX holds near 25,024, defying the Fed's hawkish shift as a landmark US-Iran deal slashes oil prices and inflation fears, boosting tech stocks like Infineon.

Frankfurt’s blue-chip index is defying a hawkish shift from the Federal Reserve, drawing strength instead from a landmark geopolitical breakthrough. The digital framework agreement between Washington and Teheran — which includes an end to sanctions and a private investment fund worth €300 billion for reconstruction — has sent oil prices sliding and calmed inflation fears. The DAX currently sits at 25,024 points, virtually unchanged from the previous close, as the distance to its all-time high narrows to less than 2%.

The peace pact’s disinflationary boost is proving potent enough to offset the sting from the US central bank. Under new chairman Kevin Warsh, the Fed left its benchmark rate unchanged, but half of its policymakers now signal at least one additional rate increase in 2026 — a clear blow to hopes for imminent easing. Despite that, the DAX is shrugging off the hawkish outlook and pressing higher, buoyed by lower energy costs and a rotation out of defensive sectors.

That rotation is stark on the trading floor. Infineon leads the charge, climbing nearly 8% in the primary article and 6.4% in the secondary read, as chip stocks attract buyers. Siemens Energy also gains 4.5% on reports of a potential sale of its multi-billion-euro compressor business. On the losing side, SAP slides 3% to 5%, while auto heavyweights Mercedes-Benz and BMW each shed more than 4% as EU tariff discussions on Chinese plug-in hybrids offer only a temporary reprieve for Mercedes.

Chart technicians see a healthy market without overextension. The Relative Strength Index stands at 57, and volatility is falling as momentum turns positive. The 25,000-point psychological support remains intact, keeping the established uptrend safe. A break above short-term resistance at 25,114 could trigger the next wave of buying, while a slip below the local low from early June would signal a technical setback. For now, the 52-week peak at 25,507 — set in January — is the clear target for buyers.