Frankfurt’s stock market finished the week on an upbeat note on Friday, 5 December 2025, with the DAX closing back above the psychologically important 24,000-point mark as investors doubled down on expectations of an imminent US Federal Reserve rate cut and a traditional year‑end rally in equities.
Index recap: DAX reclaims 24,000, broader market in the green
At the Xetra close in Frankfurt, Germany’s blue‑chip DAX index ended 0.61% higher at 24,028.14 points, its first finish above 24,000 since mid‑November. [1]
The advance capped a modest but decisive recovery week for German equities:
- DAX: 24,028.14, +0.61% on the day, about 0.8% higher on the week, and roughly 2.5% above Monday’s intraday low around 23,400 points. [2]
- MDAX (mid‑caps): 29,696.45, +0.34%. [3]
- TecDAX (tech-heavy): 3,607.88, +0.71%. [4]
- SDAX (small caps): 16,905.70, +0.53%. [5]
Across Europe, risk appetite was similarly constructive. The EuroStoxx 50 edged up to 5,723.93 points (+0.10%), while the broader STOXX 600 gained around 0.3%, leaving the pan‑European benchmark near a three‑week high. [6]
Market breadth in Frankfurt was healthy: advancing stocks outnumbered decliners 362 to 267, with 30 names unchanged on the day. The DAX volatility index slipped to 16.31, a one‑month low, underscoring a shift towards cautious optimism. [7]
What moved the DAX today? Fed, factory orders and global risk-on mood
Three big themes powered the move above 24,000:
- US rate‑cut expectations
- A delayed reading of the US core PCE price index for September – the Fed’s preferred inflation gauge – rose 0.3% month‑on‑month, exactly in line with forecasts. [8]
- The data reinforced a consensus that the Federal Reserve will cut rates by 25 basis points next week, with futures markets pricing the probability close to 90%. [9]
- Global equities rallied on the idea that the Fed will start easing while growth remains intact, lifting risk assets from New York to Frankfurt. [10]
- Surprisingly strong German factory orders
- German industrial orders rose 1.5% in October versus the previous month, comfortably beating expectations of roughly 0.3–0.4%. [11]
- The increase was heavily skewed by an 87% jump in large “other transport equipment” orders – including aircraft, ships, trains and military vehicles – and a striking 9.9% surge in domestic orders, partly tied to infrastructure and defence spending. [12]
- Stripping out large orders, underlying growth was far more modest, and orders over the August–October period were still 0.5% lower than in the prior three months, pointing more to stabilisation than a robust recovery in Germany’s manufacturing core. [13]
- A global risk‑on backdrop and December seasonality
- US stocks extended gains, with the Dow Jones, S&P 500 and Nasdaq Composite all up around 0.5–0.6% by the time Europe closed, as investors rotated into tech, energy and communication services. [14]
- Miners and cyclicals led European markets after copper prices hit a record high, and Citi boosted its 2026 target for the STOXX 600 while upgrading autos, industrials, chemicals and basic resources. [15]
The pattern is even stronger from mid‑December onwards: from 15 December to year‑end, the DAX has historically gained around 1.9% on average, with a similar 73% win rate, a classic “Santa rally” profile. [17] Against that backdrop, dpa‑AFX quoted market strategist Jürgen Molnar saying that the “stock market traffic light is on green” as investors position themselves ahead of next week’s Fed decision and potential year‑end gains. [18]
Sector snapshot: autos, chips and steel power the advance
Blue‑chip winners: BMW, Infineon, BASF
On the DAX, the rally had a distinctly cyclical flavour: [19]
- BMW climbed 3.5%, making it one of the day’s top performers, as investors continued to rotate into autos amid optimism about a global soft landing and improved sector recommendations from major banks.
- Infineon added 2.8%, lifted by the global strength in semiconductor and tech stocks and hopes that lower rates will support longer‑duration growth names.
- BASF advanced around 2.2%, helped by firmer commodity prices and the perception that a trough in global industrial activity may be nearing.
Defensives lag: utilities and healthcare
Defensive heavyweights were out of favour in the risk‑on environment: [20]
- RWE slipped about 1.2%,
- E.ON lost just over 1%, and
- Bayer eased roughly 0.8%,
as money moved out of classic defensives into more cyclical areas of the market.
Mid‑caps: Delivery Hero flies, Renk and steel stocks shine
The MDAX enjoyed a strong session, with notable standouts: [21]
- Delivery Hero surged 7.5%, extending its volatile rebound as investors hunted for oversold e‑commerce and platform names.
- Renk Group, a defence and drivetrain specialist, jumped between 4–5% after Bank of America upgraded the stock to “Buy” and raised its price target, reflecting structural demand from rearmament and military modernisation.
- Thyssenkrupp gained about 2.5%, while Salzgitter climbed more than 3%, after Citi raised its target price for Salzgitter and analysts highlighted EU measures designed to shield the bloc’s steel industry from unfair imports. [22]
Laggards in the mid‑cap space included Aurubis, Bechtle and IONOS, which fell between roughly 2–3% amid profit‑taking and selective weakness in growth and IT services stocks. [23]
Tech & small caps: chips strong, renewables and biotech under pressure
The TecDAX rose 0.6–0.7%, buoyed by semiconductor names: [24]
- SÜSS MicroTec rallied around 5.7%,
- Elmos Semiconductor added just over 3%,
- Infineon’s strength on the DAX also fed into the tech‑heavy index.
On the downside for growth stocks: [25]
- SMA Solar dropped more than 4%,
- Evotec shed about 2.7%, and
- Bechtle weakened in both the MDAX and TecDAX.
In the SDAX, Schott Pharma stood out for the wrong reasons, plunging about 8% to a record low after cutting its mid‑term targets and signalling that 2026 will be a “transition year”, prompting analysts at UBS to warn that earnings expectations will likely come down. [26]
Reinsurers and defence: mixed fortunes
Reinsurers dragged down by Swiss Re
German reinsurers underperformed after Swiss Re issued a guidance outlook that disappointed parts of the market and announced a share buyback that many investors deemed underwhelming. [27]
- Munich Re shares slipped about 0.6%,
- Hannover Re lost around 0.7%,
as investors recalibrated expectations for the sector’s profitability in 2026. [28]
Defence stocks split: Renk rallies, Hensoldt and Rheinmetall soften
Defence names were more nuanced: [29]
- Renk rallied strongly after Bank of America’s double‑upgrade, reflecting enduring confidence in the company’s role as a key supplier to the European defence industry.
- Hensoldt fell close to 1% after the same bank cut its price target and removed its “Buy” rating, while
- Rheinmetall ended lower by about 0.7%, also hit by a reduced target, even though the analyst maintained a positive fundamental view.
The moves underline how selective the defence trade has become after a multi‑year surge in valuations.
Macro reality check: the economy still looks fragile
Under the surface, Germany’s real‑economy indicators remain mixed at best:
- The manufacturing PMI for November slid to 48.2, marking a nine‑month low and signalling that the sector is still in contraction territory. New orders fell at the steepest pace in ten months, especially from overseas customers. [30]
- In the automotive sector, business sentiment deteriorated sharply in November, with the Ifo business climate index dropping to ‑20.0 from ‑13.4. Expectations collapsed as companies fretted about global policy uncertainty, Chinese competition, US tariffs and ongoing supply chain issues. [31]
That backdrop is one reason some analysts warn that the DAX’s recent gains may be built on “thin ice”. Midday commentary noted that trading volumes remain below average, even as more stocks participate in the upswing – a sign that conviction, while improving, is not yet broad‑based. [32]
Technical picture: DAX back above the 50‑day line, 24,200 in focus
Technical analysts highlighted several milestones in today’s move: [33]
- The DAX has regained its 50‑day exponential moving average (EMA), an important medium‑term trend gauge.
- Short‑term resistance is clustered around 24,000–24,100 points, an area the index briefly overshot intraday (up to around 24,130).
- The next key resistance level for many traders sits near 24,200 points; several strategists now see this as the immediate upside target if the Fed delivers the rate cut markets expect.
- On the downside, support is seen in the 23,650–23,700 range, followed by deeper levels around 23,150 and 23,000 points, which correspond to prior consolidation zones.
Positioning indicators also show that volatility has eased while the DAX volatility index has slipped to its lowest level in about a month, consistent with a “risk‑on but not euphoric” environment. [34]
Year‑end outlook: can the Santa rally continue?
Seasonal statistics, macro data and central‑bank expectations all point towards a constructively skewed, but fragile, outlook for German equities into the final weeks of 2025:
- Seasonality: Over the past four decades, the DAX has ended December higher roughly three‑quarters of the time, with average gains a little above 2%, and the second half of the month typically stronger than the first. [35]
- Fed policy: With a rate cut all but priced in and US inflation drifting lower, global risk assets have room to extend gains — as long as the Fed’s guidance does not hint at a much shallower easing cycle than markets currently expect. [36]
- European backdrop: Upgrades to cyclical sectors by major houses such as Citi, combined with record‑high copper prices, favour autos, industrials, chemicals and basic resources, all of which carry substantial weight in the DAX and MDAX. [37]
- German growth risk: At the same time, the latest PMI and sector surveys underscore that German industry and autos are not out of the woods, and today’s upbeat factory‑order data owes much to a handful of very large transport contracts. [38]
In simple terms, the path of least resistance for the DAX into year‑end remains upward, supported by rate‑cut hopes and powerful seasonal tailwinds. But the rally rests on a delicate balance: if the Fed sounds unexpectedly hawkish, if German data relapse, or if global geopolitical risks flare, the index could quickly slip back below 24,000.
For now, though, the German stock market ends this Friday firmly in “green light” mode, with investors betting that 2025 still has a little more upside left to deliver.
This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a professional advisor before making investment decisions.
References
1. www.boerse-stuttgart.de, 2. de.marketscreener.com, 3. www.boerse-stuttgart.de, 4. www.boerse-stuttgart.de, 5. www.boerse-stuttgart.de, 6. www.boerse-stuttgart.de, 7. uk.investing.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.euronews.com, 17. www.euronews.com, 18. www.t-online.de, 19. uk.investing.com, 20. uk.investing.com, 21. uk.investing.com, 22. de.marketscreener.com, 23. uk.investing.com, 24. uk.investing.com, 25. uk.investing.com, 26. de.marketscreener.com, 27. de.marketscreener.com, 28. de.marketscreener.com, 29. de.marketscreener.com, 30. www.reuters.com, 31. www.reuters.com, 32. regionalheute.de, 33. www.wallstreet-online.de, 34. uk.investing.com, 35. www.euronews.com, 36. www.reuters.com, 37. www.reuters.com, 38. www.reuters.com
