US housing sector data took a back seat despite weaker-than-expected stats. Housing starts slid by 14.7% in March, with building permits declining by 4.3%. US industrial production advanced by 0.4% after increasing by 0.4% in February.

The Tuesday Market Movers

Auto stocks were among the worst-performing stocks. BMW and Volkswagen slid by 2.96% and 2.15%, respectively. Mercedes Benz Group and Porsche saw losses of 2.14% and 1.98%, respectively.

Tech stocks also ended the day in negative territory. Infineon Technologies and SAP declined by 0.79% and 0.75%, respectively.

News of HSBC plans to cut investment banking jobs pressured banking stocks. Deutsche Bank and Commerzbank fell by 1.85% and 0.78%, respectively.

Eurozone Inflation in Focus

On Wednesday, inflation figures for the Eurozone could further cement expectations of a June ECB rate cut. According to preliminary numbers, the annual inflation rate softened from 2.6% to 2.4%.

Downward revisions could drive buyer demand for DAX-listed stocks.

Investors should monitor FOMC member commentary throughout the Wednesday session. FOMC member support to delay Fed interest rate cuts could affect buyer demand for riskier assets.

Warnings of a possible Fed rate hike could spook investors.

Beyond the economic calendar, investors should monitor news updates from the Middle East. Israeli plans to retaliate against the Saturday attack would fuel an investor flight to safety.

There are no stats from the US to consider, while corporate earnings results could move the dial.

Near-Term Outlook

Near-term trends for the DAX will likely hinge on investor expectations of ECB and Fed rate cuts. However, news updates from the Middle East and corporate earnings will influence buyer appetite for DAX-listed stocks.

In futures trading, the DAX and the Nasdaq Mini advanced by 43 and 49 points, respectively. Hopes of fresh sanctions on Iran averting an Israeli strike are likely to have contributed to the gains.

DAX Technical Indicators

Daily Chart

The DAX held above the 50-day and 200-day EMAs, sending bullish price signals.

A DAX return to the 18,000 handle would support a move toward the 18,350 handle. A break above the 18,350 handle could give the bulls a look at the April 2 all-time high of 18,567.

The Fed chatter, corporate earnings, and updates from the Middle East need investor consideration.

However, a break below the 50-day EMA would bring the 17,615 support level and the 17,500 handle into play.

The 14-day RSI at 41.51 indicates a DAX drop below the 17,500 handle before entering oversold territory.