Germany’s DAX index remains close to its all-time high as easing inflation fears and robust corporate earnings continue to drive investor optimism.

The DAX index is poised for a strong start to the week, with pre-market estimates indicating a 0.2% rise to 26,495 points. This follows Friday’s close at 26,440 points, marking a weekly gain of 0.5%. Last week, the index reached a record high of 26,573 points, continuing a four-week streak of growth that has pushed its year-to-date gains to nearly 8%.

Investor sentiment has been buoyed by diminishing concerns over inflation and interest rate hikes. A weaker-than-expected U.S. jobs report and a slight dip in U.S. inflation have reduced expectations for a September rate hike by the Federal Reserve, with market odds now at just 30%. Analysts anticipate a higher likelihood of rate adjustments by December, but the prospect of multiple hikes has significantly receded.

Strong corporate earnings have further fueled optimism, with experts suggesting that robust profit growth could sustain upward momentum in stock prices. However, geopolitical tensions in the Persian Gulf and elevated energy prices remain key risks. Brent crude rose 0.4% to $88.89 per barrel, while WTI crude increased 0.2% to $82.56 per barrel, reflecting renewed geopolitical risk premiums. Investors are closely monitoring economic signals to assess the broader impact of high energy costs on global markets.