Nevertheless, the Nasdaq Composite Index fell 1.08%, while the Dow and S&P 500 fell 0.86% and 0.60%, respectively.
Thursday Market Movers
Auto stocks traded mixed. Porsche and BMW These were increases of 1.21% and 0.85%, respectively. Mercedes-Benz Group It rose by 0.70%. However, Volkswagen It fell 5.22%.
Retail stocks continued to rise from Wednesday's trading. Zalando SE and Adidas They rose 0.66% and 1.94%, respectively, thanks to improved sentiment towards the euro zone economy.
Focus on German retail sales and euro zone inflation
German retail sales figures on Friday (May 31) will be a focus of investors. If retail sales fall more than expected, this could weaken the inflation outlook, which could support further ECB interest rate cuts from June onwards and boost buying interest in DAX-listed stocks.
Economists expect German retail sales to fall 0.1% in April after surging 1.8% in March.
But euro zone inflation will have a bigger impact on the DAX: higher-than-expected inflation could dampen hopes for multiple rate cuts by the ECB after June.
Economists expect annual inflation to rise to 2.5% from 2.4% in April.
With inflation in focus, comments from ECB members will also need to be taken into account, as their reaction to the inflation figures could affect market risk sentiment.
Focus on US Core PCE Price Index
Later in the session on Friday, investors will be focused on the highly anticipated US personal income and expenditure report.
Better-than-expected inflation and rising trends in personal income and spending could dampen investor expectations of a Fed rate cut in September.
Economists expect the U.S. core PCE price index to rise 2.8% year-on-year in April, after rising 2.8% in March.
Additionally, economists expect personal income and personal spending to increase 0.3% in April. Personal income increased 0.5% and personal spending increased 0.8% in March.
Short-term outlook
The short-term movement of the DAX will depend on the inflation rates in the Eurozone and the U.S. Higher than expected inflation rates could affect the ECB and Fed interest rate movements and buyer demand for DAX-listed stocks.
In the futures market, the DAX and Nasdaq Mini fell 37 and 50 points respectively.
DAX Technical Indicator
Daily Chart
The DAX rose above the 50-day and 200-day EMAs, confirming the bullish price signal.
If the DAX breaks out of the 18,500 level, it could signal a move towards 18,650. A breakout above 18,650 could see the bulls targeting 18,700.
Eurozone inflation and US personal income and expenditure reports need to be taken into account.
However, if the DAX falls below the 50-day EMA, the 18,000 level could become a problem.
The 14-day RSI is at 50.30, pointing to a return to 18,800 before entering overbought territory.
