Stock Market's DAX Index Experiences Deep Dive
In the world of European finance, the DAX, Germany's leading index, took a slight dip today, falling 0.3 percent to stand at 19,271 points. The Euro Stoxx 50 also felt the impact, dropping 0.7 percent and falling back below the 5,000-point mark.
The laggards in the DAX, apart from Covestro and Rheinmetall, are now Henkel, VW, and Infineon, each losing over two percent. Economists had expected this development, given ongoing profit-taking in automotive stocks. VW's current loss in the DAX could be related to this trend, as could Infineon's. However, Henkel's loss might be a pullback after a recent recovery.
The stocks of Covestro and Rheinmetall, on the other hand, are leading the performance in the DAX with a gain of 3.7 percent each. The long-awaited and now official takeover offer from Adnoc brought Covestro the course gains on Tuesday. As for Rheinmetall, its focus remains on defense and mobility technologies, including combat vehicles, weapon systems, and ammunition. Strong demand is expected from Europe amid ongoing security concerns related to Ukraine and NATO commitments.
Recently, Rheinmetall’s stock experienced a sharp decline following its Q2 2025 earnings report released in early August, which missed revenue and operating profit expectations. This caused shares to fall 5.6% to around €1,683.50, the lowest in the DAX index at that time. However, the stock rebounded about 3% in late August, recovering from a local low below €1,500, supported by continued structural demand for defense products and the geopolitical backdrop driving European defense spending.
The consumer prices from the Eurozone showed a decline in inflation below the medium-term target of the European Central Bank (ECB) of 2 percent for September. This, coupled with the temporary dip in the DAX, has led the Landesbank Helaba to see much in favor of the already expected further ECB key interest rate cut in October.
US Federal Reserve Chair Jerome Powell announced further interest rate cuts "in due time," but these remain data-dependent. The S&P 500 is down over one percent, mirroring the trend seen in Europe.
Despite the temporary losses, the DAX is still expected to perform well this year, benefiting from shifts toward defensive sectors like Rheinmetall. The index has gained over 21% year-to-date in 2025, supported by investor rotation into more defensive, value-oriented European stocks amid global uncertainties. Rheinmetall’s performance, while temporarily weak, is still influenced by strong fundamentals and geopolitical demand for defense.
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