Weekly Outlook: “New All-Time Highs in Europe”

European stocks are hitting new records, while U.S. tech stocks are losing momentum. Analysts expect this rotation to continue. Technical analysts see potential for the DAX to reach 26,300 points.

July 6, 2026. FRANKFURT (Deutsche Börse). The DAX (DE0008469008) closed at 25,779 points on Friday, marking its highest weekly close in history and gaining 4.5 percent overall. Intraday, the new record high stood at 25,827 points. The Stoxx Europe 600 (EU0009658202) rose 2.7 percent to around 653 points, also reaching a new all-time high. In the U.S., the S&P 500 gained 1.8 percent. The Nasdaq 100 posted a weekly gain of 0.7 percent but lost 1.6 percent on Friday. This morning, the DAX is once again up slightly at 25,810 points.

Support from the Political Arena

Many banks also attribute the relative strength of German stocks to the German government’s comprehensive package of measures. Birgit Henseler of Commerzbank points out that the recent rise in the DAX has been driven primarily by companies focused on the German domestic market, whose stock prices had previously lagged behind. She notes that the signal that reforms are actually taking place is particularly positive.

Uwe Hohmann of Metzler does not refer to the “Program for Economic Recovery and Employment” as a “Big Bang.” However, he notes that the package contains elements that are more relevant to competitiveness than the limited fiscal stimulus. He cites the reduction of bureaucracy, administrative relief, and moderate labor market flexibility. DZ Bank assesses the coalition’s decision similarly: not a major breakthrough, but a step in the right direction. Now, implementation must follow.

Rotation Instead of a One-Sided AI Market

Analysts also view the recent broadening of market movement positively. Robert Halver of Baader Bank sees a phase of greater selection and rotation. When it comes to artificial intelligence, investors are taking a closer look and diversifying their investments. Capital is flowing more heavily into suppliers of AI infrastructure, such as semiconductor and memory chip stocks. At the same time, Halver cites value stocks as a safe haven for capital that is no longer flowing exclusively into large-cap tech stocks. The upward momentum of those stocks has recently stalled noticeably.

Pascal Reichert of Commerzbank sees the U.S. stock market as remaining vulnerable to volatility in the coming week. The main reason, he says, is growing skepticism toward AI companies. The rally in the semiconductor and AI sectors is increasingly viewed as getting ahead of the fundamentals. Europe and Germany are less affected because their dependence on AI heavyweights is lower.

No AI Bubble, but Potential for Disappointment

Markus Reinwand of Helaba Research, on the other hand, disputes the notion of an acute speculative bubble in the technology sector. Based on his analysis of classic bubble criteria, at most three out of six warning signs are present. Credit leverage, investor sentiment, and tech valuations do not currently point to extreme overheating. However, valuations at the overall market level are high and require further earnings growth. Uwe Streich of LBBW also emphasizes that, in addition to earnings, expectations for future earnings growth have risen. The analyst sees corresponding potential for disappointment here.