Dax aims to shatter existing records.
The Dax kicked off Wednesday with a cautious rise, mirroring a minor rebound after setting a record of 24,301 points the previous day. The German benchmark index inched up by 0.1% in the initial trading minutes to 24,253 points, maintaining a year-to-date gain of roughly 22%. After approximately an hour, the Dax hit a new all-time high of 24,321 points.
The MDax remained stationary at 30,640 points, matching a three-year high reached the day prior. The Euro Stoxx 50 registered a modest increase of about 0.1%.
Focusing on Nvidia's quarterly results
Jochen Stanzl, Chief Market Analyst at CMC Markets, stated that a positive quarterly report from Nvidia could bolster investor sentiment and sustain momentum. As the world's largest provider of AI processors, Nvidia faces potential challenges from US trade policy and tightening export restrictions against China. Meanwhile, the US Federal Reserve prepares to release minutes from its latest interest rate meeting, providing insights into its future monetary policy. With concerns surrounding US trade policy escalating, expectations of lower interest rates have weakened.
Defense stocks maintains upward momentum
Defense stocks continued their rally on Wednesday, with Rheinmetall leading the way with a 1.6% increase, Renk climbing 2.5%, and Hensoldt rising 2.4%, despite a dividend cut. Investors remain optimistic about sustained demand for the sector, given the ongoing conflict between Russia and Ukraine. In the afternoon, German Chancellor Friedrich Merz planned to meet with Ukrainian President Volodymyr Zelensky in Berlin.
Enrichment Data:- European defense stocks Rheinmetall, Renk, and Hensoldt have experienced substantial growth this year, driven largely by escalating defense expenditure due to the Russia-Ukraine conflict.- Rheinmetall's share price has soared by around 170% in 2025. The company reported a 46% increase in revenue, a 49% rise in profits, and a surge in new customer orders in Q1 2025.- Renk's stock price has mirrored Rheinmetall’s gains, currently trading below its estimated fair value, indicating potential upside potential.- Hensoldt's shares have more than doubled but have lagged behind its defense peers slightly, due to recent losses, valuation concerns, and competitive pressures. However, the company's solid revenue growth and improving earnings prospects offer some optimism for recovery.- Large EU defense rearmament programs and NATO spending commitments suggest sustained demand for defense companies, though any easing of the conflict may cause volatility in these elevated valuations. Investors are advised to weigh growth prospects against geopolitical and valuation risks when considering these defense stocks.
The positive quarterly report from Nvidia, the world's largest provider of AI processors, could bolster investor sentiment and sustain momentum in the technology industry and finance. On the other hand, defense business, particularly Rheinmetall, Renk, and Hensoldt, have experienced substantial growth this year, driven by escalating defense expenditure due to the Russia-Ukraine conflict, with defense stocks maintaining upward momentum even amidst challenges such as US trade policy, tightening export restrictions, and dividend cuts.
