Setback on Quadruple Witching Day: Interest Rate Pivot in Japan and Geopolitics Push DAX Below 25,500 Points
The German benchmark index suffered a noticeable setback at the end of the week. Burdened by Quadruple Witching Day and a historic policy pivot in Asia, the DAX dropped 1.60 percent on Friday to 25,304.06 points. As a result, the stock market barometer completely gave back the previous day's gains and fell below key technical support at 25,500 points. The primary trigger for the sell-off was the Bank of Japan: as the third major central bank of the week, it raised its key interest rate by 0.25 percentage points to 1.25 percent—the highest level in 30 years—and explicitly did not rule out further steps. In addition, Donald Trump stoked fresh geopolitical nervousness by announcing an unspecified "major decision" regarding the Iran conflict.
VW Exits the European Elite: DAX Year-to-Date Performance Dramatically Loses Breadth
At the corporate level, persistent pressure is leaving noticeable marks. Volkswagen's preferred shares came under significant selling pressure, closing at 76.52 euros after the automotive giant's demotion from the EuroStoxx 50 was sealed. In the shadow of the index, a concerning thinning of market breadth is also becoming evident: since the beginning of the year, the DAX is up just over 3.1 percent—significantly less than the 7.2 percent seen at the end of August. The current price level is primarily supported by a few heavyweights, while other DAX members such as Heidelberg Materials and Rheinmetall have lost over 35 percent of their value since the turn of the year.
Fateful Meeting at the White House: Trump-Xi Summit Dictates the Direction for the New Trading Week
For the start of the new trading week, global focus shifts exclusively to Washington. The meeting between Chinese President Xi Jinping and Donald Trump at the White House is considered the paramount market event. Alongside the simmering trade dispute over rare earths, the US demand for Tehran's isolation tops the agenda. Should the summit impact the Iran conflict, it would likely filter through immediately to equity markets via the oil price channel. The core question for the start of the week is: Will the DAX manage a quick recapture of the 25,500-point mark, or will uncertainty surrounding the diplomatic marathon continue to dominate the action?
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