The back and forth in the Middle East conflict has increasingly occupied investors on both sides of the Atlantic in recent days. After hopes of a swift peace deal between Washington and Tehran boosted stock markets at the beginning of the week, repeated military escalations in the second half of the week led to uncertainty due to renewed doubts about the feasibility of a possible agreement. Now, stock markets are likely hoping for a major breakthrough again.
While Wall Street has been racing from one record to another, DAX investors have yet to see a new all-time high.
DAX
AI euphoria in the US – portal report on preliminary agreement on framework agreement provides a boost
There's less AI-driven euphoria palpable in the German stock market so far, while it continues to provide tailwinds on Wall Street. The record spark from Wall Street is thus only being felt in a dampened way by the German stock market to date.
Investors were also denied a tangible breakthrough in negotiations between Washington and Tehran regarding the Iran conflict. According to the portal „Axios,“ citing US officials, US and Iranian negotiators have reached a preliminary agreement on a so-called framework agreement. However, both US President Donald Trump and the Iranian leadership still need to approve it. For example, the ceasefire is to be extended. The agreement is also said to include unrestricted passage through the Strait of Hormuz without tolls.
Despite the ceasefire in the Iran war, which has been in effect since April 8, there have been renewed reciprocal attacks in recent days, which likely made investors uneasy.
US price data less strong than expected – incoming orders for durable goods in April rose more than expected
The core personal consumption expenditures rate rose 3.8 percent year-over-year, as expected, after 3.5 percent previously. However, month-over-month price pressure slowed to 0.2 percent, after 0.3 percent in the prior month.
Orders for durable goods climbed 7.9 percent from the previous month, significantly beating expectations of 3.5 percent, following a previous 1.3 percent.
Iran War Hurts U.S. GDP Growth
The GDP growth rate also attracted attention as expected. A second estimate showed a quarterly increase of 1.6 percent (expectation: 2.0 percent), as reported by the US Department of Commerce on Thursday. The revision was attributed by the agency to lower investments and consumer spending.
The trading week concludes this Friday afternoon with preliminary inflation data from the Federal Republic of Germany (2:00 PM).
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