Weekly outlook: Rally mood versus AI concerns

December is traditionally a good month on the stock market. It looks like it will be the same in 2025, but nothing is certain yet. In any case, there is expected to be a lot of movement this week due to numerous decisions and economic figures.

15 December 2025. FRANKFURT (Deutsche Börse). With US interest rate cuts on the one hand and high tech valuations on the other, it remains to be seen whether the year-end rally will continue. “The US Federal Reserve's decisions have given the stock markets a boost,” explains Commerzbank analyst Andreas Hürkamp. At 24,300 points on Monday morning, the DAX (DE0008469008) is only a stone's throw away from its October all-time high of 24,771 points. The Stoxx Europe 600 (EU0009658202) is also approaching its record high.

However, US stock markets closed clearly down on Friday after a new Dow Jones all-time high – triggered once again by concerns about an AI bubble. The development of precious metal prices remains striking: the price of silver climbed to an all-time high of $64.47 on Friday, while the price of gold is approaching its October high of $4,380. Bitcoin continues to struggle, slipping below $90,000.

Last ECB meeting of the year

The week before Christmas is unlikely to be boring: US labor market and inflation data that was delayed due to the shutdown, key interest rate decisions by the ECB and other central banks, and other important economic figures such as the latest ifo business climate index should provide plenty of new impetus. “However, Thursday's ECB Governing Council meeting is unlikely to offer any surprises,” explains Ralf Umlauf of Helaba. There is broad consensus among monetary policymakers that the current monetary policy is well positioned.

“DAX at 26,100 points at the end of 2026”

Commerzbank also expects slight gains on the stock markets for the remaining weeks of 2025. “And we are cautiously optimistic about 2026 thanks to a stronger German economy, robust growth in the US, further key interest rate cuts by the US Federal Reserve, and continued growth in corporate profits,” explains Hürkamp. 

The fund company DWS is also optimistic about the new year. “Further investments in AI in the US, expected double-digit profit growth of 10.9 percent, and interest rate cuts by the US Federal Reserve are the factors supporting this expectation,” explains Benjardin Gärtner, forecasting 7,500 points for the S&P 500 by the end of 2026. But prices in Germany would also pick up speed in 2026. “We expect the period of stagnation on the stock market that will characterize the second half of 2025 to be overcome in 2026,” notes Gärtner. Government spending programs would gradually take effect. The price target for the DAX at the end of 2026 is 26,100 points.

“Year-end rally finally over”

In the short term, however, chart technician Christoph Geyer believes that the outlook is no longer so positive: Although the DAX had actually opened up the possibility of a year-end rally by holding on to its support zone, an intraday shift in sentiment took place on Friday. This indicates that an upward breakout will once again not be successful. Not only are the indicators in overbought territory, but some of them have also generated divergences – a clear warning signal. “This means that the year-end rally is probably over for good. It would now be a success if the sideways range could be maintained.”