Weekly Outlook: “Volatile Sideways Trend Until Mid-Year”

Oil prices remain high, and statements regarding the war in Iran are contradictory. As a result, the situation on the stock markets remains tense as the new week begins. For now, however, the declines in stock prices are limited.

March 30, 2026. FRANKFURT (Deutsche Börse). The war in the Middle East remains the key driver of the capital markets. Iran’s attacks on the Gulf states continued over the weekend. Iranian President Massoud Peseschkian also threatened harsh retaliatory strikes against neighboring countries if infrastructure or economic centers in Iran are attacked. Meanwhile, U.S. President Donald Trump is speaking of an imminent ceasefire agreement and stating that he intends to seize Iranian oil.

At the start of last week, hopes for a rapid de-escalation had briefly eased tensions on the stock markets. However, following a dynamic recovery, the stock markets slipped again as the week progressed. The DAX (DE0008469008) lost 0.4 percent overall and closed at just 22,301 points after reaching a weekly high of 23,179. The Stoxx Europe 600 (EU0009658202) ended the week with a small gain of 0.4 percent. The U.S. indices ended the trading week with losses of 2.1 percent (S&P 500) and 3.2 percent (Nasdaq 100) following a weak Friday. At the start of the new week, the DAX is trading at around 22,200 points, slightly below its most recent closing price. The price of Brent crude oil remains at a high level of $107.

Geopolitics and Energy Prices Set the Pace

Ralf Umlauf of Helaba expects risk premiums on crude oil and natural gas to remain high as long as the Strait of Hormuz—a vital route for global energy supplies—remains effectively closed. Even after that, the strategist believes prices are unlikely to return to pre-war levels at first. According to Umlauf, the resulting risks to the inflation rate make an interest rate hike by the European Central Bank in the second quarter more likely. In addition, rising energy costs are weighing on the profits of many companies. This is already reflected in the leading indicators. Commerzbank analysts point to the decline in expectations in the ifo Business Climate Index and the drop in the combined Purchasing Managers’ Index for the manufacturing and services sectors in the eurozone to a 10-month low of 50.5 points.

Against this backdrop, Uwe Streich of LBBW examines how stock markets have performed in the wake of previous oil price shocks. According to his analysis, stock prices initially plummeted in comparable situations because valuations were hit by a significant risk discount. As oil prices fell again, this usually led to a relief rally, which, however, did not yet result in a sustained upward trend due to negative macroeconomic news flow. Only when a “light at the end of the tunnel” was perceived did valuations—and thus corporate stock prices—begin to rise. LBBW has therefore lowered its index targets for mid-2026. For the DAX, a level of “only” 24,000 points is now expected by the end of June. The index is currently trading about eight percent below that level.

Analysts see potential through the end of the year

LBBW, along with Helaba and DZ Bank, is sticking to its year-end target of 25,000 DAX points for now. Birgit Henseler of DZ Bank expects a volatile sideways phase in the short term and stabilization by mid-year. The DAX is expected to trade within a range of around 22,500 points. She does not foresee a more sustained recovery until political tensions ease in the second half of the year. At that point, falling energy costs, more attractive valuations, and improved earnings prospects could reignite upward momentum.

Key Economic and Business Dates for the Week

Monday, March 30

11:00 a.m. Eurozone: Economic Sentiment. The consensus expects a decline to 97.0 from 98.3 points. Deka anticipates that service providers and private households will be hit harder than the industrial sector.

2:00 p.m. Germany: Consumer prices. Helaba strategists expect a significant rise in the inflation rate from 1.9% to 2.8%; month-over-month, the basket of goods is estimated to have risen by 1.2%.

10:00 p.m. U.S.: Speech by FOMC Vice Chair Williams.

Tuesday, March 31

11:00 a.m. Eurozone: Consumer prices. The inflation rate for the eurozone is expected to rise from 1.9 percent to 2.7 percent. Rising energy prices are seen as the main driver. LBBW’s estimate is even higher, at 3.1 percent.

4:00 p.m. U.S.: Consumer Confidence. According to the consensus, the index is expected to have fallen from 91.2 points to approximately 88.0 points in March, primarily due to higher gasoline prices.

Wednesday, April 1

2:30 p.m. U.S.: Retail sales. The consensus expects sales to rise by 0.7 percent following a 0.2 percent decline in the previous month.

Thursday, April 2

1:30 p.m. U.S.: Initial jobless claims.

Friday, April 3

Good Friday – Stock markets closed

2:30 p.m. U.S.: Jobless figures. Following the “bitter disappointment” in February (a loss of over 90,000 non-farm jobs), Deka expects an increase of about 50,000 jobs this month. Helaba even forecasts 75,000 jobs.