DAX only at first glance with new record - US data hits sore spot for investors

Although the DAX reached a new record high during trading yesterday, it subsequently fell back again. Considering the futures market, which is important for many institutional investors, skepticism about the buy signal this actually triggered is warranted. The DAX futures contract has not yet regained its all-time high of May 29.

Without such a new record high, the chart looks somewhat more sobering: Since the beginning of May, the market has been in a sideways slide phase with a range of 1,000 points, reaching its upper limit yesterday. There's no real direction, so it's no wonder that skepticism prevails regarding yesterday's new record.

Wall Street lost momentum yesterday after economic data hit a sore spot with investors, showing a slowing labor market and rising prices. This creates a situation in which the Federal Reserve should cut interest rates to support the labor market, but cannot do so because its hands are tied by rising inflation.

No matter how much pressure US President Trump puts on Fed Chairman Powell, the Federal Reserve has a dual mandate and must pay equal attention to both variables: the labor market and inflation. One can only hope that this data dilemma is not confirmed in Friday's official labor market data, otherwise it could lead to major sell-offs on Wall Street and thus also in the DAX. Charts on today's financial market topics, additional videos, and market commentary by Jochen Stanzl can be found throughout the day at cmcmarkets.com .

Want to be notified immediately when something happens on the stock market? Open a demo account and activate push notifications!

CFDs are complex instruments and, due to leverage, carry a high risk of rapid loss. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past investment success does not guarantee future success. For more information, please visit our website: www.cmcmarkets.com .

Disclaimer: The content of this article (hereinafter: "Content") is part of the marketing communications of CMC Markets Germany GmbH (hereinafter "CMC Markets") and is provided for general information purposes only. It does not constitute independent financial analysis or financial or investment advice. It should not be relied upon as the sole basis for making an investment decision. This information should never be construed as CMC Markets recommending or considering the purchase or disposal of specific financial instruments, a specific time for an investment decision, or a specific investment strategy suitable for any particular person. In particular, the information does not take into account the individual investment objectives or financial circumstances of any individual investor. The information has not been prepared in accordance with legal requirements designed to promote the independence of financial research and is therefore considered a marketing communication. Although CMC Markets is not expressly prohibited from acting prior to providing the information, CMC Markets does not seek to take advantage of it prior to disseminating it.