Business Meeting Highlights: Alaska Summit, with presence from BASF, Airbus, Bayer taking center stage, while Thyssenkrupp and Rheinmetall face pressure
German Stock Markets Show Mixed but Generally Positive Outlook
Following the recent US-Russia summit and the latest corporate news, market analysts currently show a mixed but generally positive outlook for the DAX, MDAX, and SDAX indices.
The DAX (Germany’s blue-chip index) has demonstrated remarkable resilience despite Germany’s broader economic weakness. In 2023, the DAX surged 11.8% and has maintained momentum into 2025. This positive performance is largely driven by SAP’s AI and cloud transformation, which accounts for a significant 16.69% of the DAX’s weighting. SAP’s stock is up nearly 44% thanks to its rapid cloud revenue growth and extensive AI use cases, redefining the DAX as a global tech proxy and supporting expectations for long-term growth despite European macro risks.
On the other hand, the MDAX (mid-cap companies) and SDAX (small-cap companies) had lagged in 2024, with declines of 5% and 1.75% respectively, contrasting with the DAX’s strength. However, in 2025, both indices have strongly outperformed the DAX, with the MDAX up about 19.1% and the SDAX surging 23-28%, buoyed by strong investor interest in smaller and mid-sized German companies and ETF flows.
A major factor supporting optimism across all these indices is the recent "Made for Germany" initiative, in which 61 large German companies, including 29 DAX members like BASF, BMW, and Volkswagen, have pledged over EUR 630 billion in investments by 2028 to drive innovation, employment, and competitiveness. This aligns with Chancellor Friedrich Merz’s government stimulus plans emphasizing deregulation, infrastructure, and defense spending to stimulate growth.
Market sentiment is also indirectly influenced by geopolitical hopes emerging from the US-Russia summit and a possible meeting involving Trump, Zelensky, and Putin, which investors speculate could reduce geopolitical tensions. This has contributed to the DAX approaching record highs again, supported by expectations of an upcoming Federal Reserve interest rate cut that could further fuel market gains.
However, it's worth noting that not all stocks have fared well. Rheinmetall stock, for instance, plunged in the DAX. The DAX closed trading on Friday with a 0.1% loss at 24,359.30 points, with Siemens Energy, Zalando, E.on, Rheinmetall, and SAP at the tail end. The MDAX fell 0.6% to 30,951.69 points, while the SDAX index dropped 1% to 17,022.94 points. Airbus, Bayer, and BMW were the top gainers in the DAX.
Stephen Innes of SPI Asset Management believes even a casual remark during the talks could trigger significant market reactions. The summit between US President Donald Trump and Russian President Vladimir Putin is expected to have high market expectations.
References: [1] [Source 1] [2] [Source 2] [3] [Source 3] [4] [Source 4] [5] [Source 5]
The positive performance of SAP, a member of the DAX, is attributed to its AI and cloud transformation, contributing to the index's redefinition as a global tech proxy in the finance industry. On the contrary, stocks like Rheinmetall have experienced a decline in the DAX, highlighting the mixed performance within the business sector of German stock markets.
