Weekly Outlook: “A Healthy Pullback After a Strong AI Rally”
Semiconductor stocks are currently under pressure and weighing on the markets as a whole. However, few expect major turbulence due to high AI valuations—confidence prevails.
June 29, 2026. FRANKFURT (Deutsche Börse). The price of oil is almost back to the level it was at before the war in the Middle East, but there is no sign of euphoria on the stock market. “Concerns about high valuations in the technology sector keep cropping up on the stock markets, and as a result, the DAX is, on balance, stuck in a rut,” summarizes Ralf Umlauf of Helaba.
The U.S. tech index, the Nasdaq 100, fell by about 4 percent last week. The DAX (DE0008469008) stood at 24,745 points on Monday morning, up from 24,643 at Friday’s close. The Stoxx Europe 600 (EU0009658202) remains near record highs. Bitcoin continues to be severely battered. The cryptocurrency slipped back below the $60,000 mark over the weekend; on Monday morning, it is trading just above that level.
“Structural growth drivers remain intact”
Gero Patterer, portfolio manager at Weber Bank, describes this as a “healthy pullback following a strong AI rally.” He does not view the move as a fundamental trend reversal. “The structural growth drivers remain intact: Demand for computing power, automation, and AI applications remains high, while the available capacity of many providers remains tight,” he explains. In the short term, higher yields in the bond market and more cautious investor sentiment could lead to further volatility. In the medium to long term, however, he remains positive on stocks. The bank’s favorites: high-quality companies with strong profitability, solid balance sheets, and clear pricing power.
Shifting from stocks to bonds
“Short-term corrections and periods of increased volatility in technology stocks, such as chip manufacturers, are by no means unusual following the recent sharp price increases,” agrees Robert Halver of Baader Bank. According to JP Morgan, institutional investors have recently shifted approximately $165 billion worth of stocks into bonds. “This—the most significant portfolio rebalancing in four years—is taking its toll on the stocks that have outperformed so far.” Overall, however, corrections contribute to healthy long-term market development by crowding out leveraged investment strategies. The outlook remains attractive. “On average, this assessment is also confirmed by the earnings season. AI remains a significant growth driver due to its increasing application across the entire economy.”
Robert Halver
“Still Caught in the Crossfire of the Middle East Crisis”
The war in the Middle East remains a major issue, with fighting flaring up again over the weekend. However, the attacks are now set to cease, and negotiations are set to continue. “The German market remains caught in the crossfire of the Middle East crisis,” notes technical analyst Christoph Geyer. Consequently, the DAX has been unable to mount a rally toward its previous highs. The sell-off at the end of the week pushed the DAX back into its former resistance zone, which has now become a support level. Since the indicators are in neutral territory, no relief is expected from this front. “The new week is unlikely to bring any change here.”
The markets are facing a week packed with data. A highlight is likely to be the U.S. jobs report, which is expected to provide insight into the state of the U.S. economy and the direction of key interest rates. In addition, central bankers are gathering in Sintra, Portugal.
Key Economic and Business Data
Monday, July 29
Central Bank Conference in Sintra. The annual central bank meeting in Sintra, organized by the ECB, begins (ending July 1). Speeches—including those by ECB President Christine Lagarde and Federal Reserve Governor Kevin Warsh—are expected to provide new signals regarding future interest rate trends.
Tuesday, June 30
9:55 a.m. Germany: June unemployment figures. According to Helaba’s assessment, the dampening effect of high energy prices could also be reflected in Germany’s unemployment figures.
2:00 p.m. Germany: June consumer prices. The market expects a year-over-year increase of 2.7 percent.
Wednesday, July 1
11:00 a.m. Eurozone: June consumer prices. The reopening of the Strait of Hormuz is putting the brakes on inflation in the eurozone, as Commerzbank notes. As a result, the inflation rate may have fallen from 3.2 percent to 3 percent in June. Following the surprising rise in May, the core rate has likely fallen back to 2.5 percent.
Thursday, July 2
2:30 p.m. U.S.: June unemployment figures. According to Commerzbank, employment has recently risen sharply for three consecutive months following a weaker period. The overall picture of the U.S. labor market is solid, but nothing more than that. The bank expects 100,000 new jobs, following 172,000 in May. The unemployment rate is likely to remain at 4.3 percent.
Friday, July 3
U.S.: Markets closed for Independence Day (moved up, as July 4 falls on a Saturday).
By Anna-Maria Borse, Juni 29, 2026, © Deutsche Börse AG
About the Author
Anna-Maria Borse is a finance and business editor specializing in financial markets, the stock market, and economic issues.
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