DAX drops 0.7% amid stock market volatility before SAP earnings

DAX stumbles 0.7% as SAP’s weak cloud results rattle investor confidence

The DAX experienced a tumultuous session this week, concluding with a 0.7% decline at 24,151 points following two days of gains. Investors remained vigilant ahead of SAP’s quarterly results, which often precipitate sharp fluctuations in the index. The software behemoth’s performance carries significant weight, as it constitutes approximately 13% of the DAX’s composition.

Trading commenced midweek with little direction, but momentum shifted once U.S. markets opened. The DAX struggled to maintain its footing, dragged down by broader apprehensions. Geopolitical tensions, including the ongoing trade dispute between the U.S. and China, along with fresh sanctions on Russian oil producers, added pressure to stock markets.

Investors hesitated to make further purchases before SAP’s earnings report. The company’s results tend to generate noticeable volatility in the DAX, given its substantial influence on the index. When SAP’s shares plummeted by 4% in after-hours trading due to disappointing cloud business figures, the reaction underscored how closely the DAX tracks its movements.

Technical levels now play a pivotal role in the index’s next move. If the DAX fails to surpass resistance at 24,216 points and drops below the 50-day moving average at 24,160, analysts anticipate a pullback toward 24,000. A sustained descent beneath the 24,000–23,960 range could then open the door to deeper declines, targeting the gap at 23,830 or last week’s low of 23,700.

On the upside, a breach above 24,216 points might spark a rally toward 24,380, with potential to reach 24,500. However, bearish pressure could resurface at those higher levels. Meanwhile, high implied volatility in U.S. markets suggests the current calm may not persist.

The DAX now hovers near its previous close, with its next move depending on whether it can clear the 24,216–24,230 obstacle. SAP’s underwhelming cloud performance has already dampened sentiment, reinforcing the index’s sensitivity to corporate earnings. Traders will watch closely to see if the DAX can regain upward momentum or succumb to further selling pressure.