In addition to the trade disputes, the past trading week was characterized in particular by the ECB meeting and a dispute between Donald Trump and Elon Musk. At the end of the week, investors can look forward to the non-farm payrolls.
DAX
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50 percent punitive tariffs on US imports of steel and aluminum come into force
As expected, the doubling of import tariffs on steel and aluminum to the USA came into force on Wednesday. The US President had already announced new tariffs last week. According to the statement, the aim is to "take more effective action against foreign countries that continue to dump surplus steel and aluminum at low prices in the United States". Despite interim signs of easing in the tariff conflict, investors are likely to continue to fear Donald Trump's erratic trade policy.
Conflict between Donald Trump and Elon Musk keeps investors busy
On Thursday, it was the escalating dispute between Trump and Musk that preoccupied markets around the globe. The US president and the tech billionaire had hurled accusations at each other, which also pushed Tesla shares down by over 14% in the meantime. The dispute was triggered by a bill before the Senate that provides for comprehensive tax and spending reforms. At the same time, however, the national debt would be increased by several trillion US dollars.
ISM PMI manufacturing index in the USA below expectations - euro inflation lower than expected
At 48.5 points, the ISM PMI index for the manufacturing sector was below the estimates made in advance (49.5 points).
The preliminary European consumer price data also attracted attention. Compared to the same month last year, inflation rose by 1.9%, which was less than expected (2.00%). At the same time, the rate was below the 2.0% threshold actually targeted by the ECB.
The so-called "JOLTs" (Job Openings and Labor Turnover Survey) came in at 7.19 million jobs in April, well above expectations (7.10 million). This data reflects the vacancies on the market, which are counted up to the last working day of the month.
The ADP employment data, which usually provide an initial foretaste of the NFPs, also came in well below the previous estimates (115,000 units) at 37,000 new jobs, compared with 62,000 jobs in April.
At 49.9 points, the counterpart to the ISM index for the service sector was also below expectations (52 points) and thus below the important growth threshold of 50 units.
ECB cuts deposit rate by 0.25 percentage points - interest rate pause possible in July
As expected in advance, the European Central Bank (ECB) lowered the deposit rate, which is decisive for the financial market, by a further 25 basis points to a range of 2.0 percent on Thursday afternoon, marking the eighth time since mid-2024 that interest rates have been lowered. "I am not confirming a pause here now," said ECB President Christine Lagarde.
"And based on the current interest rate path and the 25-point cut we have decided on, we are well positioned to deal with the uncertainties that lie ahead." At the same time, Lagarde emphasized that the ECB would stick to its data-dependent approach and decide from meeting to meeting. At the next scheduled central bank meeting in July, the financial market currently estimates that there is an 80% chance that there will be a pause in interest rates.
US labor market data rounds off the trading week - economists expect a slump in the job market
At the end of the week, investors are likely to be eagerly awaiting the publication of the official US labor market report (Non-Farm Payrolls) (14:30). According to current estimates, economists expect an increase in non-farm payrolls of 130,000 units, compared to 177,000 units in the previous month. The unemployment rate is expected to remain at 4.2 percent, unchanged from the previous month.
Dow Jones Industrial Average Index
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Tesla
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