25/08/25 09:27:45

Weekly outlook: “Turbo” in the US, sideways here

An imminent cut in key interest rates in the US has become more likely, and US markets are rallying. However, the DAX is unable to keep pace, as it now appears unlikely that peace will be achieved in Ukraine anytime soon.


25 August 2025. FRANKFURT (Börse Frankfurt). The speech by US Federal Reserve Chairman Jerome Powell at the Jackson Hole conference on Friday has once again raised hopes of an interest rate cut on September 17. In the US, the Dow Jones climbed to a new all-time high, while the S&P 500 and Nasdaq 100 returned to their recent highs. “The US benchmark indices kicked into high gear after Powell's speech,” Deutsche Bank noted.

At the same time, an early end to the war in Ukraine has become less likely again. “The headlines were dominated by the summits on efforts to end the war in Ukraine. The outcome was – surprise, surprise! – rather meager,” commented Christian Apelt of Helaba. In addition, the summer break is coming to an end. “The seasonally difficult months are beginning on the stock markets.”

On Monday morning, the DAX stood at 24,254 points, down from 24,363 at Friday's close. The record high of 24,639 points set in July remains some way off. However, the Stoxx Europe 600 index is very close to its all-time high of 564.4 points, currently standing at 561 points.

“Peace rally possible”

“A ceasefire would be enough for a peace rally on the DAX, with the stock markets playing the role of Ukraine's massive reconstruction,” explains Robert Halver of Baader Bank. “But we're not there yet.” Whether there will actually be a direct meeting between Zelensky and Putin remains unclear. The security guarantees promised by Trump and the issue of territorial concessions also remain “nebulous.”

For Berndt Fernow of LBBW, the interest rate cut in the US is also not yet a done deal. Concerns about employment have been growing since the weak US labor market report for July. “At the same time, however, US tariff policy seems to be driving inflation,” he explains, pointing to the unexpectedly strong rise in producer prices in July.
 

Robert Halver

“DAX gains will increase significantly”

Andreas Hürkamp from Commerzbank does not expect a correction. Although the DAX price gains in the past two years are largely attributable to higher valuations, the change of government in Germany and the radical change in fiscal policy in the first half of this year have brought the German stock market back onto the radar of international investors. As a result, the P/E ratio rose from 13 to 15. “This means that the P/E ratio is now well above the average of 13 for the past ten years,” Hürkamp notes. However, DAX corporate profits are expected to increase significantly again in the coming year. “Investors should therefore hold DAX positions and expand them in the coming months during temporary setbacks.”

What is the situation with Nvidia?

Although the reporting season is more or less over, there is still one highlight to come on Wednesday: Nvidia, the world's most valuable company, will publish its quarterly figures. “The US reporting season for the second quarter was very positive, with an aggregate earnings surprise of over 8 percent,” says Ulrich Kater of DekaBank. However, Nvidia shares have recently corrected after rising more than 80 percent since mid-April. “The quarterly figures and, above all, the outlook are extremely important for Nvidia—and for all companies associated with AI.” 

Important economic and business data

Monday, 25 August 

United Kingdom: Public holiday. No trading.

10:00 a.m. Germany: ifo Business Climate Index for August.

Tuesday, 26 August

2:30 p.m. USA: Durable Goods Orders for July. According to DekaBank, civil aircraft construction is slowing down. It expects a decline of 4 percent.

Friday, 29 August

8:00 a.m. Germany: Retail sales for July. Helaba forecasts a small increase of 1 percent compared to the previous month.

9:55 a.m. Germany: Unemployment figures for August.

2:00 p.m. Germany: Consumer prices for August. According to Commerzbank forecasts, the inflation rate will be 2 percent for the third month in a row, exactly in line with the ECB's target. The core inflation rate is likely to continue its gradual downward trend, but will remain above 2 percent.

2:30 p.m. USA: Price index for consumer spending excluding food and energy. According to DekaBank, data already available indicates that the monthly price change excluding food and energy will exceed the US Federal Reserve's target for the third month in a row. However, in July in particular, this was not due to tariff-related price effects, but rather to the financial services sector. 

By Anna-Maria Borse, 25 August 2025, © Deutsche Börse AG

Anna-Maria Borse is a financial and business editor specializing in financial markets/stock exchanges and economic issues.

Feedback and questions to redaktion@deutsche-boerse.com