DAX Rises on Earnings and Easing Oil, But Faces Structural Headwinds

German DAX index climbs above key moving averages, fueled by corporate results and a calmer geopolitical mood, despite structural economic headwinds and a lag behind US peers.

The German benchmark index has pushed past the 24,000-point threshold, closing Thursday at 24,154 points. This move places it back above its 50-day moving average, situated near 23,980 points, and also nudges it over the closely watched 200-day line. The advance was fueled by a combination of corporate news and a calmer geopolitical mood, even as underlying economic challenges for Germany's export-heavy companies persist.

Investors are shifting focus from Middle East tensions to corporate earnings, with a weaker-than-expected US producer price index providing an initial spark. The immediate energy price shock has also eased. Following comments from US President Trump, fears of a blockade in the Strait of Hormuz have receded for now. This cooled commodity markets, sending Brent crude oil down nearly five percent to just over $94 a barrel and pushing European gas prices to 41 euros per megawatt-hour.

The ongoing earnings season is delivering clear momentum for individual stocks. European semiconductor shares, including Infineon and SAP, found support from strong results by industry supplier ASML, which reported first-quarter revenue of approximately 8.7 billion euros. In a strategic expansion, Deutsche Börse announced a $200 million investment for a 1.5% stake in Payward, the parent company of crypto exchange Kraken, valuing the platform at over $13 billion.

However, not all corporate news was positive. Fashion retailer Hugo Boss shocked the market by slashing its 2026 sales and profit targets, causing its shares to plummet around ten percent. Airbus also faced pressure, cutting its annual delivery target due to persistent issues with software and fuselage parts.

Despite the index's recent climb, a stark performance gap remains with international peers. While the DAX eked out a 0.36% gain, the S&P 500 and Japan's Nikkei celebrated new record highs. Portfolio manager Thomas Altmann of QC Partners notes a "considerable dose of optimism" in US markets that is simply absent in Frankfurt.

Structural brakes on the German market are significant. The European Central Bank holds its deposit rate firmly at 2.00%, with market expectations growing for two further rate hikes by year-end as the Middle East conflict fuels energy prices and inflation risks. A strong euro, trading at 1.1787 US dollars, further weighs on the export-dependent DAX constituents. Leading research institutes forecast only marginal economic growth for Germany this year.

From a technical perspective, the local low at 22,670 points continues to underpin the current uptrend. Analysts suggest that as long as support at 23,400 points on a closing basis holds, the path toward the 24,500-point mark remains open. The coming days will be dominated by more corporate reports, with tech and banking stocks expected to lead any further advance. All eyes are now turning to the ECB's next interest rate meeting on April 30th.