DAX edges higher on SAP rebound and rate-cut optimism ahead of Fed decision

European markets opened higher on Wednesday, supported by a rebound in SAP and growing investor optimism ahead of the Federal Reserve’s policy decision later in the day.

However, the market could remain at risk as investors could remain cautious.

SAP led gains in the index, advancing nearly 4% in early trading after upbeat management commentary helped allay recent concerns over its cloud segment.

Remarks from the CFO emphasised robust cloud intake and free cash flow guidance, triggering renewed interest in the stock. The company’s bounce offered a broader lift to the tech and software space across the region.

Investor focus remains squarely on the Fed’s decision due this evening. Markets have fully priced in a 25-basis-point rate cut, but the key lies in the updated Summary of Economic Projections and Powell’s tone. Should policymakers reinforce the prospect of multiple cuts in the next months, equities could edge higher. Conversely, any signs of hesitation may trigger profit-taking at current levels.