DAX Index Reaches New Heights Due to Cautious US Interest Rate Signals

The stock markets are demonstrating their resilience after the US Federal Reserve (Fed) provided clear indications of its interest rate policy and buoyed investor optimism for economic growth. The DAX continued its record-breaking streak on Thursday, hitting new all-time highs. Already by midday, the leading German index had gained 0.24 percent, reaching a level of 18,057.60 points, after briefly rising to 18,177 points. The mid-cap MDAX also couldn't escape the positive sentiment, climbing 0.69 percent to 26,444.35 points. The European benchmark index, the EuroStoxx 50 recorded a gain of 0.4 percent. This recent development follows the DAX's initial record high on Wednesday, ahead of the Fed's interest rate decision, which ultimately closed below the day's peak. This positive trend, supported by the Fed's statements, also led to record levels in the US benchmark Dow Jones Industrial and the broadly based S&P 500. The US Central Bank kept its key interest rates unchanged as expected but indicated further rate cuts for this year. Jerome Powell, Chairman of the Fed, left the exact timing of these monetary easing measures open. According to the Fed, economic growth in 2024 will be stronger than previously forecasted, while the persistent inflation is unlikely to reach the two percent target for the time being. Market observers now predict that a rate cut is unlikely to occur before the Fed meeting in June. Contrary to some market expectations, the Fed also did not reduce the number of planned rate cuts for 2024, which was particularly favorable for real estate companies. In corporate reports, several stocks stood out. Heidelberg Materials impressed with a high since 2008 and a gain of 2.8 percent, attributable to a dividend increase and the early contract renewal of CEO Dominik von Achten. Befesa was among the MDAX leaders with a 4.5 percent gain after presenting its annual results. ProSiebenSat.1 shone in the SDAX with a 3.8 percent increase; investors rewarded the group split demanded by major shareholder Media For Europe. Conversely, Nemetschek's stocks were less pleasing, suffering a 5 percent loss. The operational margin forecast did not convince investors. In the internet sector, United Internet and 1&1 were under pressure with a decrease of 4 percent and 2.5 percent, respectively. Ionos, a subsidiary of the group, also experienced a 5 percent drop in share price. For Douglas, which recently returned to the stock market, the re-entry began with a share price discount of 11 percent at 23.14 euros, significantly below the issue price of 26 euros.