Racing giant DAX set for exit from competition - Surge in Rheinmetall stock prices skyrockets
The German stock market has experienced a significant rebound today, with the DAX gaining over two percent and standing at 19,426 points. This recovery follows a significant setback on the German stock market the day before, in reaction to Donald Trump's U.S. election victory.
One of the main drivers of this rebound is the alignment of Fed policy expectations, which supports risk-taking. Economists expect the U.S. Federal Reserve to loosen monetary policy again in the evening, with a 0.25 percentage point cut in the range of 4.50 to 4.75 percent. The expected outcome of the upcoming Fed meeting in August 2025 is likely to be holding the federal funds rate steady again, but markets price a 60%-90% chance of a September rate cut as the Fed signals a potential pivot due to inflation and economic data.
Among the DAX heavyweights, Rheinmetall is leading the pack with an eight percent gain. The stock's rise is primarily due to record first-half sales and orders related to geopolitical tensions, particularly for artillery and ammunition to NATO and Ukraine. In the first half of 2025, Rheinmetall posted record sales in weapons and ammunition, with a 25.6% increase year-over-year. This robust sales growth, along with improved operating results and margins despite higher costs, underpins investor optimism and the stock’s upward movement.
Armin Papperger, CEO of Rheinmetall, is becoming more optimistic about the margin target. He attributes the growth at Rheinmetall to the arms boom in the third quarter, caused by the Ukraine war.
Other than Fresenius, no other major losers have been identified in the DAX. Fresenius stock is currently the laggard in the DAX with a current loss of 1.7 percent, likely due to profit-taking after a strong gain the previous day.
Meanwhile, Heidelberg Materials, another DAX heavyweight, gained 5.7 percent, with investors welcoming the building materials company's optimistic outlook for the year.
Carsten Mumm from Donner & Reuschel bank sees the end of the traffic light government as an opportunity for "economic and political renewal." Market observers are hoping for fiscal policy support for the ailing German economy following the collapse of the coalition in Berlin. Sandra Rhouma, an analyst at investment firm AllianceBernstein, wrote that the early federal elections have raised hopes for more fiscal support for the economy.
Daimler Truck rose 5.8 percent, with analyst Daniela Costa of Goldman Sachs praising the profitability of the truck manufacturer.
The information about Rheinmetall is sourced from dpa-afx. The stock symbol for Rheinmetall is WKN: 703000.
Sports broadcasting channels have announced that Rheinmetall's impressive growth will be featured in their business news segment, highlighting the company's record-breaking first-half sales and orders in weapons and ammunition, primarily due to geopolitical tensions. The CEO of Rheinmetall, Armin Papperger, is quoted expressing optimism about the margin target, attributing the growth to the arms boom caused by the Ukraine war.
