FRANKFURT (dpa-AFX) - The German stock market came under pressure on Friday in an environment defined by caution. Observers pointed to the uncertain situation in the Middle East conflict and cooling euphoria surrounding Artificial Intelligence (AI) as primary headwinds. Furthermore, the US jobs report for May proved solid, fueling speculation that the Federal Reserve could raise its benchmark interest rates as early as this year. Such a move would enhance the attractiveness of bonds relative to equities.
Consequently, the benchmark Dax index closed 0.75 percent lower at 24,759.05 points, resulting in a weekly loss of 1.38 percent. While the 25,000-point threshold remains in focus, it is currently acting as a level of resistance. The MDax, which tracks mid-cap companies, fell by 1.02 percent on Friday to 32,466.60 points.
According to Landesbank Hessen-Thüringen (Helaba), job growth in the US for May was a significant upside surprise. Overall, the employment figures reflected a robust US labor market. This trend is likely to reinforce expectations of a potential rate hike by the Federal Reserve.
Market analyst Timo Emden of Emden Research also highlighted the upcoming record-breaking IPO of space company SpaceX, which is already casting a shadow and is expected to be the first major stress test for the AI rally. 'The placement could serve as a barometer for how much risk capital can still be mobilized after years of the AI and technology rally.' Investors may shift risk capital and withhold additional liquidity in the coming trading days./la/he
