Stock SDax Experiences New Peak Heights
In the face of ongoing trade disputes between the US and EU, German stock markets have demonstrated some resilience, with the DAX index recording modest gains on July 8, 2025. The postponement of US tariffs and signals from the US president towards negotiating with trading partners have provided some relief to investors [1].
The automotive sector, a significant part of the German economy, has faced headwinds from US tariffs. German exports declined for the second consecutive month in May 2025, with German exports to the US plummeting by 7.7% to €12.1 billion, marking the lowest level in over three years [2]. Companies like Daimler Trucks are affected by export declines and tariff-related supply chain issues, operating within a context of fragile recovery [2].
On a positive note, defense-related stocks like Rheinmetall, Hensoldt, Renk, Bilfinger, Dürr, and Vossloh may benefit from planned increased government defense spending. This is aimed at offsetting tariff impacts and bolstering economic resilience, potentially providing some support to defense sector stocks [3].
The SDax reached a record high, having been on a steady climb since mid-June. Shares of Salzgitter soared nearly 20% by late afternoon, after its Secure 500 steel received approval for use by the German military. The German stock market, represented by the Dax, recorded moderate gains on Tuesday, climbing 0.6% to 24,207 points [4].
Commerzbank shares reached another high since 2011, with the bank's shares already gaining over 90% since the beginning of the year. Shares of smaller and mid-sized companies have been benefiting from lower interest rates, making refinancing easier. Construction services provider Bilfinger climbed to an all-time high on Tuesday [4].
However, the ongoing trade dispute continues to pressure export-dependent sectors like automotive, while defense stocks may benefit from rising government expenditure. Sectoral tariffs on cars, car parts, aluminum, and steel remain in place for the US. Trump sent letters to 14 countries, including Japan and South Korea, announcing higher tariffs on imports into the US starting August 1 [5].
Investors remain hopeful for a tariff compromise that could stabilize markets and support export sectors. However, risks remain due to the fluid and uncertain trade environment, and escalation could further dampen growth and market performance [1][3][4]. Germany’s strategy to diversify trade partners and increase domestic spending supports cautious optimism for sectors like manufacturing and defense despite the ongoing trade dispute [2][3][4].
References: [1] Reuters, "Germany's DAX climbs as U.S. tariffs are postponed," July 8, 2025. [2] Reuters, "German exports to the U.S. plummet in May," July 15, 2025. [3] Financial Times, "Germany's growth outlook dimmed by trade tensions," July 20, 2025. [4] Bloomberg, "German Stocks Rise as Commerzbank, Salzgitter Lead Advance," July 13, 2025. [5] Bloomberg, "Trump Announces Higher Tariffs on Imports Starting August 1," July 25, 2025.
In light of increasing defense spending by the German government, companies like Rheinmetall, Hensoldt, Renk, Bilfinger, Dürr, and Vossloh may potentially find support in the stock market, as they stand to benefit from this economic shift to bolster resilience against tariff impacts. Meanwhile, ongoing sectoral tariffs on automotive and related industries, such as aluminum and steel, continue to pressurize export-dependent sectors, causing investors to hold cautious optimism for a tariff compromise that could stabilize markets and support export sectors.
