FRANKFURT (dpa-AFX) - Although investors have largely digested the temporary tariff shock initiated by US President Donald Trump, calm is unlikely to return to the German stock market in the coming week. While Trump withdrew his threatened punitive tariffs following an agreement on a Greenland deal, geopolitical risks persist. Additionally, Germany is now fully entering corporate earnings season. Other factors include the upcoming interest rate decision from the US Federal Reserve and the Ifo Business Climate Index.

The recent recovery of the DAX shows that most investors believe in the long-term viability of the Greenland deal sealed at the World Economic Forum in Davos, commented portfolio manager Thomas Altmann of QC Partners.

Analyst Frank Sohlleder from broker Activtrades, however, still senses a degree of skepticism: "The Greenland thriller may have been defused, but it is far from over." And according to market observer Andreas Lipkow, the question remains as to which issue the US will bring up next, or revisit.

From the perspective of analyst Jochen Stanzl at Consorsbank, the DAX is currently in a neutral zone at around 24,900 points, exactly between its yearly low and record high. For the index to rise further, it is now crucial for companies to reassure investors that their strong profit expectations for 2026 are realistic. After the Greenland topic, the market can now focus more on earnings season.

In Germany, Thursday will be especially notable for the annual results from software giant SAP, Deutsche Bank, and its fund subsidiary DWS.

Internationally, quarterly reports from Apple, Microsoft, Tesla, and Meta are also expected to have a major impact this week. European heavyweights such as ASML and LVMH will round out the picture with their own results.

The start of the US earnings season has been positive, noted Dekabank chief economist Ulrich Kater. Although the vast majority of companies have delivered positive earnings surprises, share price reactions have been far from uniformly good. "Elevated valuations and corresponding investor expectations have thinned the air for stocks, at least in the short term, despite good long-term prospects," Kater wrote.

Regardless of fresh balance sheets, defense stocks could remain in focus, believes investment strategist Mark Dowding of RBC BlueBay Asset Management. The events surrounding Greenland have heightened the sense of urgency to increase defense spending in Europe. "The latest developments also serve as a warning against the complacency in financial markets, which recently has seemed to ignore rising geopolitical risks," Dowding said.

Meanwhile, concerns are growing about the political independence of the US Federal Reserve, after President Trump once again increased pressure on Fed Chairman Jerome Powell. Metzler chief economist Edgar Walk therefore expects Powell to rule out further rate cuts until the end of his term in May. Thus, no further rate reductions are expected from the Fed's decision on Wednesday. This not only sends an institutional signal but also aligns with the recently noticeably improved economic data in the US.

Among the numerous German economic data releases this week, the Ifo Business Climate Index on Monday is likely to stand out. The recent positive surprise in the purchasing managers' indices provides a positive indication, concluded Simon Azarbayjani of Landesbank Helaba. An increase in the Ifo Index is likely. On Friday, current unemployment figures and preliminary inflation data for January will be published./niw/ajx/mis

--- By Nicklas Wolf, dpa-AFX ---