DAX Ends Flat as Chip Selloff Hits Europe

The broader European tone was softer too. The EURO STOXX 50 fell 0.55% to 6,167.01 points, with semiconductor names under pressure after reports that China’s CXMT is making progress on AI chips and after Broadcom’s chief warned that expectations around artificial intelligence and data-center spending may have gotten ahead of near-term returns. That fed through to Asian markets first, where Japan’s Nikkei dropped 1.82%, before spilling into Europe and then Wall Street.

US stocks ultimately closed in the red as well. The Dow Jones fell 0.35% and the Nasdaq Composite declined 0.15%, with the chip sector among the biggest drags. Treasury yields eased, with the 10-year US yield down 5 basis points to 5.19%, but that was not enough to offset concern that the AI capex boom may be running into profitability questions.

For investors, the message is that the market is still rewarding earnings strength, but only selectively. Goldman Sachs beat expectations in equities trading, while UnitedHealth raised its full-year profit outlook, showing that banks and insurers can still deliver in a high-rate environment. In contrast, tech shares remain vulnerable to any sign that spending on AI infrastructure is outpacing monetization.

In Germany, Rheinmetall bucked the broader caution after news of its cooperation with NEL, highlighting continued investor appetite for defense and industrial names tied to strategic supply chains and Europe’s energy transition. Rheinmetall’s shares have been volatile, but the stock remains well above its 50-day moving average, even after recent pressure that pulled it back from higher levels; the latest reading on its RSI was 43.8, suggesting momentum has cooled but not broken.

The bigger setup now is the next round of US inflation data and the start of third-quarter earnings season, both of which will help determine whether this week’s pullback is just a pause or the start of a broader de-risking after months of strong gains in US equities.