DAX Rides Triple Catalyst Wave Past 25,000 as Bayer, Merck and Micron Offset Inflation Jitters

Frankfurt's DAX index surpassed 25,000 as Bayer surged 19% on a US Supreme Court win, Merck announced an $11.3B acquisition, and Micron's strong results lifted chip stocks, despite in-line inflation data.

Frankfurt's benchmark index breached the psychologically important 25,000-point threshold intraday on Thursday, propelled by a rare convergence of blockbuster corporate events. A landmark US Supreme Court ruling in favour of Bayer, a $11.3 billion acquisition by Merck KGaA and strong earnings from US chipmaker Micron all combined to lift the DAX, even as fresh inflation data capped the rally.

The session's biggest single-stock mover was Bayer, which exploded 19% to €47.12. The US Supreme Court decided that federal law preempts state-level regulations in the long-running glyphosate litigation, effectively neutralising thousands of pending lawsuits. Analysts described the verdict as a decisive win for the German life-science group, which has been battling legal claims over its Roundup weedkiller.

Merck KGaA provided additional firepower by announcing the takeover of US laboratory equipment specialist Bio-Techne for roughly $11.3 billion. The offer of $73 per share represents a 36% premium to the stock's last traded price. Merck's own shares rose 1.3% as investors welcomed the strategic move into higher-growth diagnostics.

Volkswagen lent further support after confirming the sale of a 51% stake in its Everllence division to Bain Capital for €7.4 billion. The deal underscores the automaker's push to streamline its portfolio and unlock value in non-core assets.

Micron lifts semiconductor hopes

The technology sector received a major boost from Micron Technology, whose quarterly results exceeded expectations and triggered a broad rotation into chip stocks. Infineon surged 5.4%, with JPMorgan and Bank of America raising their price targets to as high as €108. The rally helped offset weakness elsewhere in the index.

On the losing side, Fresenius Medical Care tumbled 7.0% after JPMorgan downgraded the dialysis specialist to "Underweight". The move followed a proposed US reimbursement rate for dialysis treatments that fell well short of market forecasts, raising concerns about future profitability. SAP also retreated, shedding 2.4% after Jefferies cut its price target from €230 to €210, citing lingering uncertainty over the software group's artificial intelligence strategy.

Inflation data fails to derail momentum

Afternoon data from the US Federal Reserve's preferred inflation gauge briefly tempered enthusiasm. The core PCE deflator came in at 3.4% in May, while the headline reading rose to 4.1% — both exactly in line with economists' expectations. The lack of a negative surprise prevented a more pronounced selloff, though the figures reinforced the view that interest rate cuts are still some way off.

A positive surprise came from the US Commerce Department, which revised first-quarter GDP growth up to an annualised 2.1%. For export-oriented DAX constituents, the stronger growth backdrop is encouraging. The euro held steady at $1.1354.

The domestic Ifo business climate index also edged higher in the morning, providing an additional tailwind before the US data crossed the wires.

Technical picture brightens

The DAX closed the session at 24,995 points, up exactly 1.0% on the day. The index successfully reclaimed its 20-day moving average, which currently sits near 24,871 points, and printed a daily high of 25,088. That level now represents the next resistance hurdle. A sustained rally on Wall Street after the PCE release could help the DAX consolidate above 25,000 by the week's end.

Technical indicators suggest further upside is possible: the relative strength index stands at 55, leaving the market in neutral territory, and the index trades roughly 2% below its 52-week high of 25,508 points. On the downside, initial support lies around 24,740 points, with a more solid floor at 24,588.