DAX Outlook: Between Hopes for Interest Rates and Fears of a Crash

03 Dec 2025

Analysis courtesy of Eurex.

After a conciliatory end to November, the year-end rally is now back on the table. While the US interest rate cut seems to be a done deal, the topic of AI valuation remains controversial. The development of Bitcoin continues to be striking.

Hopes for a US interest rate cut on the one hand and concerns about an AI bubble on the other continue to dominate the markets. The probability of a US interest rate cut has risen sharply recently and is now priced in at almost 100 percent. “If our forecast of another key interest rate cut on December 10 is correct, the stock market recovery is likely to continue in December,” says Commerzbank analyst Pascal Reichert.

The DAX stood at 23,695 points on Monday morning, slightly below Friday’s closing level of 23,837 points. The US stock markets continued to recover on “Black Friday” with shortened trading hours and are not far from their record highs. The situation with cryptocurrencies remains striking: after temporarily exceeding US$90,000, Bitcoin is currently trading at only US$86,000 again – around 30 percent below its all-time high.

How was the shopping weekend?

According to Ulrich Kater from DekaBank, the stock market’s performance in the near future will initially depend on retail sales over the Thanksgiving weekend. “These are seen as an indicator of how Christmas business will go,” he explains. According to a recent ifo survey, the majority of retailers in Germany do not expect Christmas sales to pick up compared to last year. However, this is also seen as an opportunity: if sentiment and the economic situation are at record lows, this has already been reflected in share prices. “This means that the probability of an improvement is higher than that of a further deterioration.”

“No crash, but ‘smaller rolls’”

LBBW Chief Economist Moritz Kraemer is already looking ahead to next year. “We believe it is increasingly likely that investors’ expectations will prove unrealistic,” he explains. The risk of corrections is rising. Never before has the US market been driven by so few individual stocks as it is today. More than 40 percent of the capitalization in the S&P 500 is accounted for by the top ten stocks. “Almost all of these stocks are riding the same AI wave.” But even the broader market is expensive from a historical perspective, even in this country. “We are not predicting a crash, but the stock markets are likely to be much more modest in the coming years.”

“Continued AI boom in 2026”

The fund company DWS, on the other hand, continues to see opportunities for 2026 in light of strong growth in the US and Europe and low interest rates. “AI investments and sustained robust earnings growth are likely to drive the S&P 500 to around 7,500 points by the end of 2026,” explains Benjardin Gärtner. “We don’t see an AI bubble, we see a continued AI boom.” This could lead to significant productivity gains in the coming years. There will be setbacks along the way, as with any technological revolution. But the growth story remains intact. In addition, European markets are benefiting from fiscal stimulus, albeit at a slower pace. DWS forecasts 600 points for the Stoxx Europe 600 and 26,100 points for the DAX at the end of 2026.

Important economic and business data

Wednesday, 3 December

SDAX index review: Changes will be published after the US stock market closes.

Friday, 5 December

8:00 a.m. Germany: October order intake. After recent rather disappointing data, Commerzbank believes that order intake in German industry is likely to have risen slightly more strongly again. It expects an increase of 1.5 percent compared to the previous month.
4:00 p.m. US: Consumer price index excluding food and energy for September. DekaBank expects the index, which is published with a delay of more than a month, to rise by just under 0.2 percent. The annual rate of change would thus fall slightly from 2.9 to 2.8 percent.

Take a view on the European Markets with Phillip Nova now!

Trade Micro-DAX® and Micro-EURO STOXX 50® Futures at EUR1.50*. Learn more here.

Trade CFDs, ETFs, Forex, Futures, Options, Precious Metals, and Stocks with Phillip Nova 2.0

Features of trading on Phillip Nova 2.0

Gain Access to Over 20 Global Exchanges
Capture opportunities from over 200 global futures from over 20 global exchanges

Trade Opportunities in Global Stocks
Over 11,000 Stocks and ETFs across Singapore, US, China, Hong Kong, Malaysia and Japan markets.

Charting Powered by TradingView
View live charts and gain access to over 100 technical indicators

True Multi-Asset Trading
Trade CFDs, ETFs, Forex, Futures, Options, Precious Metals and Stocks on a single ledger on Phillip Nova 2.0

Free Phillip Nova Demo Account

Fast and Secure Online Account Opening

An Exchange Traded Fund (ETF) is a marketable security that is formed to track nearly anything, ranging from a specific index, sector, commodity, or increasingly, theme. They are most commonly used to track a basket of stocks, and can typically be accessed through the same channels as regular stocks. ETFs are typically separated into passively-managed ETFs that simply mirror the security they are tracking (e.g. the STI), and actively managed ones that attempt to deliver higher returns or specific investment objectives, often with a pre-specified theme in mind (e.g. ARK Invest’s Innovation ETF).

Why should I trade in ETF CFDs?

ETFs have been growing in popularity over the years. 2020 was the best year for ETFs yet, with global equity ETFs seeing more than $1T in inflows within a 12-month period. Using CFDs to gain exposure to ETFs allows for greater capital efficiency because only a portion of the contract value is required as margin to establish a position.
ETFs are particularly popular with investors seeking a relatively hassle-free investing experience, while desiring exposure to a range of specific and relatively understandable securities. Trading ETF CFDs brings greater convenience by eliminating the need for traders to hold multiple currencies in order to access global ETFs.
An investor wanting exposure to the post-pandemic economic recovery could open a position in the well-known SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500. Another investor that may be convinced of the future importance of Environmental, Social and Governance concerns (ESG) may find the increasing selection of ESG-themed ETFs that track a basket of high ESG-rating companies to be a good investment, rather than cherry-picking individual equities by hand. ETF CFDs can act as a powerful tool for traders can profit from both directions of the market by taking on long or short positions.

A look at two ETF CFDs we offer:

1) Has the ARKK been sunk?

ARK Innovation ETF (ARKK) ARKK is an actively managed ETF by ARK Invest that invests in a range of companies based on their innovative and industry-disrupting potential. ARKK’s largest holdings are in companies such as Tesla, Square, and Zoom. ARKK is down around -33% from peaking on 12^th Feb and is currently in the red for the year to date as the market experiences a risk-off outflow of funds. Superstar fund manager Cathie Wood has however been consistently doubling down on her bets, buying even more shares in growth stocks that are going through their own tumultuous periods such as DraftKings, Peloton, Teladoc, and Tesla. In her view, ARKK is playing the long game, and remains steadfastly convinced in the long-term prospects of these growth stocks beyond this current bout of volatility. Similarly on outflows, investors are still betting big on ARKK as ARK Invest has only lost about $1.2B in assets this year across all its six funds, compared to seeing an inflow of $15.1B during the same period. Recently, investors have been nervously eyeing ARKK’s basket of tech stocks as their future earnings potential remain vulnerable to erosion through high inflation – the dominant concern of the market in recent weeks. As commodities – the major contributor to the recent heightened inflation fears – drops sharply from record highs, are investor concerns over hyperinflation overblown?

2) Searching for exposure to Asian equities?

iShares MSCI Asia ex Japan ETF (AAXJ) The AAXJ is currently trading -10.6% adrift of all-time highs seen in February, giving up gains in tandem with an Asia-wide equity sell-off at the time. Given that slightly over 40% of the ETF’s holdings are based in China, the ongoing tumult seen in Chinese equities currently have carried over nearly perfectly in the AAXJ, as Chinese investors take a breather after the stellar gains made over the past year. Looking ahead, Asia – and particularly China, is steaming ahead with its economic recovery. China is widely expected to be one of the best-performing major economies this year, providing a major boost to the outlook for corporate earnings. As the rest of Asia and the world gradually opens up their own economies, AAXJ is likely to again benefit from strong Asian outperformance amidst a strengthening trade outlook.

CFD is available for trading on Phillip MetaTrader 5 (MT5).

Features of trading CFD:

Trade in both the bull and the bear markets
The ability to enter a long and/or short position allow traders to take advantage of both rising and falling markets.
Smaller barrier to entry
Flexible and smaller contract sizes. This means that traders will be able to enter into a contract with a modest amount of capital.
No expiration date or risk of delivery
Unlike futures which commonly have a fixed expiration date, CFD allows traders to perpetually hold the position(s). CFD is cash settled, no need to worry about the delivery of the underlying asset.

Benefits of using Phillip MT5:

Trade at zero commission on a dynamic platform that offers low spreads. Integrated with Autochartist and Trading Central Indicators, and available on mobile, web and desktop app, you will never miss a trading opportunity with Phillip MT5.

Register for a FREE 30-day Phillip MetaTrader 5 Demo Account

More Market Trends