Investors remain in a balancing act between confidence and caution. On one side are the promises of the AI revolution, on the other are doubts about high expectations, geopolitical risks, and monetary policy uncertainties. The DAX is holding steady without charting a clear course.
With the expected IPO of SpaceX and other potential heavyweights on the IPO market, investor appetite for growth stocks faces a crucial test. The AI rally must prove it's more than just a liquidity magnet. Investors fear that new IPO candidates could lead to a rotation of risk capital out of current market favorites. US inflation data and the upcoming ECB key interest rate decision are also in focus.
DAX
Iran conflict continues to hold investors' attention – peace hopes waver
As in previous weeks and months, the Middle East conflict is unlikely to let investors go for the time being. According to their own statements, the USA has again attacked Iran. These were attacks for „self-defense“ on the orders of Trump, as the US Central Command CENTCOM announced. In the run-up, Trump had accused Iran of shooting down a US military helicopter. „The mission represents a proportionate response to the unjustified Iranian aggression,“ the US military stated.
Investors fear that diplomatic negotiations between Washington and Tehran could thus be slowed down. The stock markets are still waiting in vain for a viable peace agreement.
US Inflation Data in Focus – Economists Expect a Significant Increase in Price Increases
Accordingly, the US consumer price data for May will be in focus this afternoon (2:30 PM). Economists expect an inflation rate of 4.2 percent compared to the previous year's month, after 3.8 percent in April.
The core inflation rate, which excludes energy and food drivers, could rise by 0.1 percentage points to 2.9 percent, according to estimates.
ECB Meeting on Thursday in Focus – All Eyes on Christine Lagarde
Thursday should be all about the ECB Governing Council meeting. While the key interest rate decision is expected at 2:15 PM, President Christine Lagarde is likely to address the public at 2:45 PM.
The ECB could potentially raise interest rates by a quarter of a percentage point. The so-called deposit facility rate is currently at 2.00 percent, which commercial banks receive for parking excess liquidity overnight at the ECB.
US producer prices and consumer sentiment data (Univ. of Michigan) also in focus
In the meantime, US producer prices could provide important monetary policy impetus.
Preliminary consumer sentiment data from the University of Michigan will round out the trading week from an economic calendar perspective on Friday (4:00 PM).
High tension before SpaceX IPO
Furthermore, the much-anticipated IPO of the aerospace company SpaceX on Friday should continue to cast its shadow ahead. Meanwhile, demand is expected to be significantly higher than the offering at $250 billion, as reported by the Reuters news agency. A volume of $75 billion is being targeted. The trading launch on the Nasdaq technology exchange under the ticker SPCX is planned for June 12.
