DAX and S&P 500 Drift Lower as Central-Bank Week Looms

European and US equity indices are diverging after last week's sell-off. The DAX opened Monday at 25,320 and fell roughly 1% to 25,050 during the session before recovering to 25,286 by mid-afternoon, weighed down by violent weekend protests in France and an upcoming credit-rating review. The S&P 500 closed Friday at 7,659, down 1.95% for the week, but futures rallied 0.4–0.8% on Monday and the cash index pushed to 7,734 by the New York afternoon. The Nasdaq 100 finished last week at 29,188, breaking below a rising channel that had held since July, and recovered to 29,580 on Monday. Hot inflation data—September US consumer prices rose 3.7% year on year and producer prices 6.3%—pushed the ten-year Treasury yield to around 5.11%, putting pressure on technology shares that depend on cheap funding for artificial-intelligence infrastructure. Brent crude hovered near $110 per barrel on Strait of Hormuz supply risks, and the market is now pricing a December Federal Reserve hike more heavily than an October move.

What the calendar says

Three central-bank decisions land in the final week of October. The Federal Reserve announces its policy decision on 28 October at 18:00 UTC; officials have been in a communications blackout since mid-October, and the consensus expects rates to stay on hold while the market assigns roughly 16–30% odds to an October hike and higher probability to December. The decision will set the tone for dollar pairs, gold and US equity indices. The European Central Bank follows on 29 October at 12:15 UTC, with implications for the euro and European bourses including the DAX. The Bank of Japan meets on 30 October (time not yet fixed), which typically moves yen crosses. A full list of scheduled releases is on our economic calendar. Corporate earnings from technology and automotive firms—including results already reported or due this week—are also in focus, because they test the sustainability of artificial-intelligence spending.

DAX 40 technical picture

The DAX is trading at 25,286, inside a falling channel that began at the late-August high. Price sits just above its 200-day moving average near 25,269 and below shorter averages at 25,430 and 25,678; the upper average aligns with the channel roof around 25,650. Momentum is neutral, with the relative-strength index at 47.68 above its signal line at 45.37 but still under 50. The October low near 24,850 is the first support if the index closes below 25,050, and a break there would open the previous swing low around 24,218. Resistance at 25,430 has capped rallies, and only a daily close above that level would shift the near-term bias back to neutral. French political uncertainty and the central-bank meetings are the immediate swing factors.

S&P 500 technical picture

The S&P 500 is at 7,734, sitting on its short-term moving average and holding inside a shallow rising channel that has contained price action since early August. The index trades between averages at 7,735, 7,705 and 7,597; the channel floor lies near 7,520. Momentum has turned soft, with the RSI at 51.35 but below its signal line at 54.64. A daily close under 7,601 would put the channel support in play and open 7,520 and then 7,500 as downside targets. The record close of 7,819 on 5 October is the first upside objective if the index can reclaim 7,820. The Fed decision on 28 October and technology-sector earnings are the key near-term catalysts; a sustained break of 7,600 would signal that the correction has room to run toward the April–October midpoint.