DAX Index nears crucial price after key Volkswagen, Rheinmetall, Bayer news

The German DAX Index experienced some volatility this week, as investors reacted to some notable news from key constituents like Rheinmetall, Volkswagen, and Bayer. It was trading at 25,000, up by nearly 5% from its lowest level this month.

Bayer, Rheinmetall, and Volkswagen are moving the DAX Index

The DAX Index jumped on Thursday after Bayer, a top player in the index, won a major lawsuit in the Supreme Court. The court sided with the company, overturning a jury award for a Missouri man who claimed that Roundup contributed to cancer. 

This is a major decision that will impact thousands of Americans with similar claims and save the company billions of dollars. In his statement, Justice Brett Kavanaugh said that the case would require a cancer warning label on Roundup that would directly conflict with the one required by the EPA. 

Bayer has been on the hook for billions of dollars, making its Monsanto buyout one of the worst acquisitions in history. Since its $63 billion buyout, the company has spent over $20 billion in this litigation. It agreed to a $10.9 billion settlement in 2020, and then added another $7.25 billion earlier this year. Its shares have soared by 90% from the lowest level in 2025. 

The DAX Index also reacted to woes at Rheinmetall, the biggest defense group in the country. Its stock tumbled to €900, its lowest level since February 24 and 52% below its highest point in 2025. It has become the top laggard in the index this year. 

Rheinmetall shares plunged after Germany announced that it was cancelling the F126 frigate project, citing significant project delays and cost increases. The government will instead buy eight MEKO frigates for anti-submarine warfare as an alternative. This decision will hurt Rheinmetall, which has been involved in the project since the beginning. 

The other key DAX Index news came from Volkswagen Group, which made a major deal this week. In a statement, the company said that it was selling its diesel engine unit to Bain in a deal that will generate €7.4 billion. Bain won the auction, beating other private equity companies. 

Volkswagen is aiming to free up capital as it goes through a major challenge in its business amid the soaring competition from Chinese companies. In a statement, the CEO said:

"Leaner structures and processes will allow Everllence to achieve ​further growth in attractive markets such as data centers, the energy sector and shipping. ​At the same time, it will allow us to focus even more strongly on our core business,"

DAX Index technical analysis

DAX Index chart | Source: TradingView

The weekly chart shows that the DAX Index has rebounded from a low of 21,882 on March 23rd in March to the current 25,000. It has formed an inverted head-and-shoulders pattern, a common bullish reversal sign in technical analysis.

The index also remains above all moving averages and is trading slightly lower than the neckline of 25,410. Also, the Relative Strength Index (RSI) was moving upwards.

Therefore, the stock will likely have a strong bullish breakout, potentially to the key resistance level of 26,000. This view will be confirmed when the stock jumps above the resistance at 25,410.

READ MORE: Bayer CEO Talks $10.9B Agriculture Lawsuit