Tariff conflict persists under Trump's leadership, amid economic stability indicated by DAX
The Trade War Tussle: What's Going Down with the DAX and Key Stocks Like Infineon and Merck?
Today, the DAX took a partial breath after a US-led trade dispute easing, managing to stabilize at 21,479 points, up 0.2 percent from the day prior. The Euro Stoxx 50, on the other hand, bounced back more significantly, sitting pretty at 5,258 points, up 0.8 percent.
Monday saw the US President Donald Trump momentarily halt tariffs on goods from Mexico, which initially helped the DAX to trim losses. Additionally, he announced that Canadian goods would temporarily escape tariffs as well. Yet, uncertainty lingers, according to market expert Thomas Altmann from QC Partners. "The uncertainty remains high. It's unclear whether the tariffs will actually be imposed in 30 days or if Trump will secure further concessions from the neighboring countries before then," Altmann said. In the EU, it's still "too early to break into a victory dance", as "US tariffs still remain a potential threat", he added. Analyst Christian Henke from broker IG warned, "Trump still has a few economic policy arrows in his quiver."
On the other side of the Pacific, additional tariffs of 10 percent on Chinese imports ordered by Trump over the weekend came into effect on Tuesday. In response, China plans to impose tariffs of 15 percent on coal and liquefied natural gas from the US starting February 10. Oil and agricultural machinery will face a 10 percent tariff. Besides, China announced an antitrust investigation into US tech giant Google. Trump indicated that he would "probably converse with the Chinese side within the next 24 hours."
DAX Stocks under focus: Infineon and Merck
Presently, Infineon, a semiconductor manufacturer, tops the DAX performers, skyrocketing a whopping 10 percent. The company's Q1 results surpassed expectations, boosted by the weak euro, and it increased its revenue target for the fiscal year. Jefferies analyst Janardan Menon lauded the results, calling them "extravagantly above expectations." Further insights on Infineon's triumph can be found here.
Meanwhile, Merck, a US pharma titan, languishes at the bottom, sinking 1.8 percent. The company wrapped up 2024 with a Q4 that outperformed expectations. Annual revenue grew seven percent to $64.2 billion (€62.5 billion) compared to the previous year, with Keytruda, its top-selling cancer drug, driving the growth. However, lackluster sales of the HPV vaccine Gardasil dampened the overall performance.
This content includes material from dpa-AFX
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- The current trade dispute easing, in part, has helped the DAX partially stabilize, with Infineon, a leading semiconductor manufacturer, surging 10 percent amid encouraging Q1 results.
- Despite the temporary halt on tariffs for some goods, the DAX is still under pressure due to uncertainties in US-led trade politics, with market expert Thomas Altmann cautioning that US tariffs still remain a potential threat.
- The technology sector isn't immune to the trade tussles, as evidenced by China announcing an antitrust investigation into US tech giant Google, highlighting the intricate relationship between politics, business, finance, technology, and general-news in today's global economy.
