The U.S. unexpectedly cut interest rates significantly, pushing the German Dax index to a new record level on the 19th.

Analysts pointed out that the Federal Reserve's move undoubtedly ignited investors' enthusiasm for a new phase of stock market gains, but there is considerable uncertainty about the sustainability of the bull market.

On Thursday, after the German blue-chip index Dax opened sharply higher, it rose almost all day, not only breaking through the 19,000-point mark for the first time in history but also successfully closing above this key level, ending the day with a 1.55% increase.

Stocks of construction materials, chemical pharmaceuticals, and consumer goods manufacturers led the day's gains.

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The Fed had initiated a rate cut process with an unusually large margin the day before and expected further monetary policy easing.

This move has obviously greatly encouraged stock investors.

On Thursday, the European benchmark index Stoxx 50 also surged by 2.24%.

Analysts at Nomura Securities, a Japanese financial company, pointed out that as long as the U.S. can avoid a recession in the next few months, the Fed's continued rate cuts will usually support the stock market's rise.

Carsten Brzeski, head of macro research at the Dutch bank ING Group, believes that the Fed's strong intervention has increased the possibility of a soft landing for the U.S. economy.

This is also good news for the German economy, as about 10% of Germany's export market is in the U.S. Volker Treier, head of foreign trade at the German Chambers of Commerce and Industry (DIHK), also said that if the U.S. economy regains growth momentum due to the reversal of interest rates, this is a positive signal for the German export industry.

However, the Dax index's breakthrough of the 19,000-point mark has also caused concern among some professional investors.

They pointed out that this Friday is the main expiration date for September options and futures.

This is one of the most important dates of the year for international futures exchanges.

An options trader said that this usually ensures higher stock index levels in the short term, but may lay the groundwork for a subsequent stock price collapse.

In the next few weeks, whether long-term investors will truly follow up and increase their holdings of stocks will be crucial to the market trend.

Stefan Hofrichter, chief economist at Allianz Global Investors (AGI), pointed out that the stock market wisdom of long-term investors is that "the market's first reaction is usually wrong."

Hofrichter emphasized that as long as central banks can fight inflation without stifling the economy, stock prices will continue to rise slightly.

However, "the risk of recession and related setbacks is still very large."

Analysts pointed out that even if the rate cuts in Europe and the U.S. have eased financing conditions for businesses and consumers, thereby stimulating the economy, uncertainty still exists.

Significant rate cuts, while supporting the economy, also increase the risk of inflation.

The inflationary pressure brought about by the depreciation of the dollar can be seen from the recent two trading days when gold prices hit a new high and crude oil prices resumed their rise.

Solomon Fiedler, an economist at Berenberg Bank, a private bank, doubted whether the Fed has the room for rate cuts that the market currently expects.

He believes that under the condition that U.S. fiscal policy is likely to remain very loose, it is difficult for the Fed to lower the key interest rate below 4% to avoid inflation from rising again.

It is worth noting that the yields on long-term government bonds in Europe and the U.S. did not continue to fall with the Fed's significant rate cuts, and the yields on ten-year government bonds in the U.S. and Germany have rebounded in the past two trading days.

This also reflects to some extent the judgment of professional investors on long-term inflation levels.

There is currently a significant divergence of opinions on the room for rate cuts by European and American central banks, especially the Fed.

This uncertainty means that the market may experience significant fluctuations with each central bank decision.

Jia Shi, an analyst at DWS, a subsidiary of Deutsche Bank, believes that the tension in the stock market may intensify again on the eve of the U.S. election.

In the long run, strategists are only slightly optimistic about the stock markets in the U.S. and the eurozone.

Since the beginning of the year, the Dax index has now risen by nearly 12%.

However, the development of the stock market is in stark contrast to Germany's poor economic situation.

In fact, the German economy has hardly grown compared to before the COVID-19 pandemic.

It is currently on the verge of a technical recession again.

Looking at the first half of the year's financial reports, the peak of large companies' profits has gradually passed.

The Dax index was at the level of 13,000 points before the COVID-19 pandemic, and it successively broke through the 15,000-point and 16,000-point marks in March and August 2021.

Since then, affected by the energy crisis, the stock index has fluctuated, breaking through the 17,000-point mark in December 2023, the 18,000-point mark in March this year, and successfully standing above the 19,000-point mark in September.