Germany's DAX stock market index briefly tops 18,000 for first time

Germany's benchmark blue-chip stock index, the DAX, briefly topped 18,000 points for the first time during trading on Wednesday morning, hitting 18,000.42 shortly after opening before dipping back below that mark.

The DAX, which is made up of 40 large publicly traded German corporations, has been on a strong run in recent days despite struggles for the overall German economy.

The DAX closed down .02% at 17,961.38 on Wednesday.

Many of the companies in the DAX do significant business abroad, such as in the United States, and are less dependent on the domestic German market.

Stocks have been boosted by strong US economic growth and investor optimism about artificial intelligence (AI).

The rally has also been driven by official data indicating that inflation in the eurozone is falling faster than expected, raising the prospect that the European Central Bank (ECB) may cut interest rates sooner.

The ECB recently lowered its 2024 inflation forecast to 2.3%, compared to 2.7% in December. ECB President Christine Lagarde suggested that key interest rates could fall as soon as June.

Low interest rates are traditionally a driver for share prices, as alternative lower-risk investments such as bonds become less attractive.

Some analysts and economists, however, have warned against excessive optimism among stock investors and the risk of a correction in the DAX, with some describing German blue-chip stocks as "overbought."