Other US data, including industrial production and housing sector data, also beat expectations.
Nonetheless, the CME FedWatch Tool signaled an increased chance of a sizeable Fed rate cut. The probability of a 50-basis point Fed rate cut increased to 65.0% on Tuesday, up from 62.0% on Monday. Easing fears of a hard landing and bets on a sizeable Fed rate cut drove buyer demand for DAX-listed stocks.
On Tuesday, September 17, the US equity markets experienced another mixed session. The Dow slipped by 0.04%, while the Nasdaq Composite Index and the S&P 500 advanced by 0.20% and 0.03%, respectively.
On Wednesday, the US housing sector will be in focus. Building permit and housing start numbers for August could give investors insights into the US economy. Economists consider the US housing market a litmus test of the economy. Upward trends in building permits and housing starts could indicate rising demand for new homes, signaling a robust economy.
While the stats will draw interest, the focus will remain on the post-European close FOMC interest rate decision, projections, and press conference.
A 50-basis point Fed rate cut and optimism toward a soft US economic landing could push the DAX toward 19,000 on Thursday. Conversely, a 50-basis point Fed rate cut and warnings of a hard landing could drag the DAX toward 18,000.
Near-term DAX trends will hinge on Eurozone inflation numbers and the Fed interest rate decision. Softer Eurozone inflation could raise bets on a Q4 2024 ECB rate cut, boosting demand for DAX-listed stocks. However, the Fed interest rate decision and projections will likely impact the DAX more.
In the futures markets, the DAX was down 40 points, while the Nasdaq mini was up by 3 points. Investor caution may grip the DAX, with the FOMC interest rate decision due after the European closing bell.
Investors should stay alert to central bank chatter and economic indicators. Stay informed with our latest news and analysis to manage your risks effectively.
The DAX remains above the 50-day and 200-day EMAs, affirming bullish price signals.
A breakout from the 18,750 level could support a move to the all-time high at 18,991. Furthermore, a break above 18,991 may give the bulls a run at 19,200.
Eurozone inflation, central bank commentary, and sentiment toward the Fed rate path require investor consideration.
Conversely, a drop below 18,500 may signal a fall toward the 50-day EMA. A fall through the 50-day EMA could give the bears a run at 18,000.
The 14-day RSI at 57.66 indicates a climb to the all-time high before entering overbought territory.