DAX hits record highs
The German stock market index of leading companies has broken the 22,000-point barrier for the first time. This has come in spite of President Trump’s announcement of tariffs.
Frankfurt (dpa) - Unimpressed by Donald Trump’s announcement of tariffs, the German DAX stock market index yesterday went past 22,000 points for the first time in its history. Trump has announced 25% tariffs on steel and aluminium imports into the USA and threatened to impose more. In spite of this, the DAX has risen almost 11% since the beginning of this year, following the success of 2024 in which it grew almost 19%. The DAX has also rebounded following recent falls due to concerns about Chinese competition in AI.
The stock market has been driven by expectations that the European Central Bank will cut interest rate in the Eurozone as a means of boosting sluggish growth. Fears of inflation have eased in recent weeks, so markets are expecting to see strong economic activity and falling inflation rates. The prospect of lower interest rates are also good news for investors, as shares would become more attractive compared to fixed-interest bonds. Borrowing becomes cheaper and businesses therefore find it easier to get finance, making investment more profitable.