The German benchmark DAX index has started 2026 with renewed momentum, pushing beyond previous record highs after a strong 2025 performance that saw robust gains compared to many developed markets. Supported by resilient corporate earnings, fiscal stimulus expectations and a rotation of capital back into cyclical European assets, the Frankfurt exchange is signaling a shift in attention from traditional safe havens to Europe’s largest equity market. This remarkable start comes even as domestic economic challenges persist, underlining the complex dynamics at play in global investing.

The start of the year has brought significant asymmetry to global markets. While the US indices have entered the new year rather cautiously and parts of the Asian markets remain under pressure from weaker growth, the German DAX is making a surprisingly sharp start. During the first few weeks, it has managed to repeatedly push historical highs higher and is currently hovering close to the 25,000-point mark.

Thi…