Weekly Outlook: “No Signs of a Stormy Fall”

The DAX's most recent record high remains within reach, driven by strong corporate earnings and hopes that interest rates will not rise. The still-high oil price is currently being ignored.

August 17, 2026. FRANKFURT (Deutsche Börse). The stock markets continue to ride a wave of record-breaking momentum. “The summer lull on the stock markets appears to be absent this year,” comments Robert Halver of Baader Bank. Although the Iran conflict persists, with no foreseeable solution in sight, a growing global economy, trends toward easing inflation, and the U.S. Federal Reserve’s restraint on interest rates are creating a “sunny market mood.”

On Monday morning, the DAX (DE0008469008) stood at 26,470 points, up from 26,459 at Friday’s close and 26,562, its most recent all-time high. The Stoxx Europe 600 (EU0009658202) is also trading near record highs, as are the S&P 500 (US78378X1072) and the Dow Jones (US2605661048). And the Nasdaq 100 tech index (US6311011026) is now approaching its highs again after significant declines in July. The recent gold price rally, which drove the price per troy ounce from around $4,000 to over $4,410 in a short period of time, has lost some momentum. It currently stands at just under $4,400.

“Significant Price Corrections Unlikely”

“The list of negative factors is long: wars, structural change, extreme weather events,” notes Helaba analyst Markus Reinwand. Nevertheless, stocks worldwide have already risen by about 14 percent this year—twice as much as the long-term historical average. In addition to the negative developments, he also sees some positive ones. “The economic outlook in the major economies is largely positive. And the global industrial cycle appears to be picking up, which would particularly benefit German companies,” he explains. While a large portion of the expected earnings growth is already reflected in the high valuations, most indices are also anything but cheap, meaning that upside potential is largely exhausted in the short term. “However, there are currently no indications—aside from possible geopolitical disruptions—of impending significant price corrections or even a turbulent fall.”

“FOMO, but No Blind Euphoria”

Halver shares a similar view. While he has observed growing fear of missing out (FOMO) following the recent all-time highs, he points to a sentiment survey by the American Association of Individual Investors: The ratio of optimists to pessimists does not suggest blind investor euphoria. Corrections are possible, but they would be limited. The currently subdued volatility is also reassuring. “Bargain hunters will strike during temporary pullbacks and provide a floor for the stock markets.”

DZ Risk Scenario: DAX Down 15 Percent

Meanwhile, there is no sign of a resolution to the Middle East conflict. Although the price of oil—currently at $88 per barrel of Brent—remains well below May’s highs of over $114, it is also far above the $60 level seen before the outbreak of the war with Iran. In its main scenario, DZ Bank assumes an agreement will be reached and that oil prices will fall, but it has also examined what persistently high oil prices would mean for the stock markets.

Europe and Germany would then be hit particularly hard, explains DZ analyst Sonja Marten. “For Germany, we expect a slight decline in gross domestic product in the 2027 risk scenario, while inflation in the eurozone would rise to an annual average of nearly 4 percent,” she says. Stocks would find themselves in the “vice grip of oil prices, recession risks, and restrictive monetary policy.” “By the end of 2026, we expect declines of around 15 percent in the DAX, 12 percent in the Euro Stoxx 50, and 10 percent in the S&P 500 under the escalation scenario,” she notes.

Key Economic and Business Data

Monday, August 17

4:00 a.m. China: Retail Sales/Industrial Production for July.

Tuesday, August 18

11:00 a.m. Germany: ZEW Economic Sentiment Survey for August. Following the encouraging Sentix survey, DekaBank believes there is nothing standing in the way of a more positive assessment of the economic situation and expectations in the ZEW survey. Markets and economic indicators are performing well, and the recent rise in crude oil prices has so far gone largely unnoticed by market participants.

3:15 p.m. U.S.: July industrial production. DekaBank expects an increase of 0.3 percent month-over-month and 1 percent year-over-year.

Wednesday, August 19

8:00 p.m. U.S.: Minutes of the latest Federal Reserve meeting.

Friday, August 20

10:00 a.m. Eurozone: Purchasing Managers’ Index (PMI) for August. According to Commerzbank’s assessment, the PMI could climb back above the level seen before the Iran conflict.