DAX 40 vs S&P 500
The DAX 40 is the German large-cap equity benchmark covering top 40 most liquid German stocks on FWB Frankfurt Stock Exchange. Industrial sector dominates DAX with approximately 33 percent weight (Siemens, Linde, Daimler Truck, MTU).
Also known as: DAX 40 (DAX, German equities) · S&P 500 ETF (SPY) (ETF_SPY, S&P 500, SPX, SP500)
Why This Comparison Matters
The DAX 40 is the German large-cap equity benchmark covering top 40 most liquid German stocks on FWB Frankfurt Stock Exchange. Industrial sector dominates DAX with approximately 33 percent weight (Siemens, Linde, Daimler Truck, MTU). Software (SAP) approximately 10 percent. Financials (Allianz, Deutsche Bank, Munich Re) approximately 15 percent. Auto (Volkswagen, BMW, Mercedes-Benz) approximately 10 percent. SPY (SPDR S&P 500 ETF) tracks the cap-weighted S&P 500 with mega-cap tech dominance (top 7 names ~32 percent of index). The DAX 40 is total return index (dividend reinvested) while S&P 500 is price index. DAX outperformance signals global manufacturing cycle strength, China demand recovery, EU fiscal acceleration. SPY outperformance signals US tech-led leadership era.
The April 2026 Configuration
DAX closes April 25, 2026 at 24,129 (down approximately 2.3 percent for the week). SPY closes at $708. DAX/SPY ratio: not directly comparable (DAX in points, SPY in dollars). Conversion: DAX/SPY in equivalent terms ~34.1 points/dollar.
DAX 2026 YTD performance has been mixed: Siemens Energy strongest performer +50 percent YTD on raised 2026 fiscal year guidance; SAP weakest at approximately -33 percent YTD despite Q1 2026 +17 percent profit growth. The dispersion reflects sector-specific dynamics: industrial energy/grid stocks benefiting from EU electrification capex; software facing valuation reset.
The combined April 2026 reading: DAX pressured by mixed signals. Trade-barrier concerns weigh on automotive (Volkswagen, BMW) and industrial (Siemens) sectors. Banking and insurance (Deutsche Bank, Allianz) benefit from lower yields supporting funding costs. The DAX has absolute gained substantially in 2024-2025 from approximately 14,000 (early 2023) to 24,129 (April 2026, +72 percent total return) but has trailed SPY in USD terms once currency-adjusted.
How DAX and S&P 500 Diverge
DAX and SPY have related but fundamentally different sector compositions. DAX is industrial-cyclical heavy (33 percent industrial sector); SPY is tech-heavy (top 7 mega-cap tech ~32 percent of SPY). The two indices therefore capture different aspects of the global growth cycle.
The practical implication: DAX outperforms SPY during global manufacturing cycle expansion (China demand recovery, US capex acceleration, EU fiscal stimulus). SPY outperforms DAX during US tech-led expansion (AI capex, mega-cap dominance, multiple expansion). The 2024-2026 era has been a US tech-led expansion: NVDA +12x peak-to-peak (2023-2025), hyperscaler $400 billion+ annual AI capex.
Correlation between DAX and SPY (in USD terms) averages 0.65-0.80 in normal conditions. During global risk-off correlation rises to 0.85+. During US-specific events correlation drops. Beta of DAX to SPY: approximately 1.10-1.30 over 2020-2026 (DAX more volatile due to currency exposure plus cyclical sensitivity).
DAX 40 Composition and Recent Changes
DAX 40 expanded from DAX 30 to DAX 40 in September 2021 to broaden the index. Current top constituents (April 2026): SAP largest weight at approximately 10 percent (despite -33 percent YTD performance). Siemens approximately 9 percent. Allianz approximately 7 percent. Linde (industrial gases) approximately 6 percent. Deutsche Telekom approximately 5 percent. Volkswagen, BMW, Mercedes-Benz combined approximately 10 percent. Siemens Energy approximately 4 percent (after +50 percent rally).
The DAX is total return index (dividend reinvested) since 1988, distinguishing it from S&P 500 (price index). The dividend reinvestment provides approximately 200-300 basis points of additional annual return for DAX holders vs S&P 500 holders making like-for-like comparisons misleading.
DAX free-float adjustment removes inside ownership stakes (Volkswagen Porsche family stake, etc.). Index reweighting occurs quarterly. The 2024-2026 era saw strong rotation within DAX: industrials/electrification gained at expense of auto/energy.
DAX vs S&P 500 Long-Term Performance
Long-term DAX performance from 1992 to 2026: DAX rose approximately 8x in 34 years (8 percent annualized). S&P 500 rose approximately 11x in 34 years (8.5 percent annualized excluding dividends, 11.5 percent including dividends total return).
The gap reflects compositional differences and currency dynamics. DAX has been hit harder by major European crises (2008 GFC, 2011 European debt, 2020 COVID, 2022 Russia). DAX has benefited from European recoveries (2009-2015 recovery, 2017-2021 expansion).
The 2024-2026 era has continued the SPY outperformance trend. From 2024 start: DAX +30 percent in EUR terms; SPY +50 percent in USD terms. Currency translation: EUR/USD strengthened from 1.10 to 1.168 (+5.8 percent), partially offsetting DAX underperformance.
Net result: DAX in USD terms approximately +37 percent vs SPY +50 percent (2024-2026). DAX/SPY underperformance gap approximately 13 percent over 28 months.
How the Pair Performs Through Macro Cycles
Three macro cycle examples of DAX-vs-SPY dynamics. 2017-2018 global expansion: DAX rose from 12,000 to 13,500 peak January 2018 (+12 percent); SPY rose 17 percent. SPY outperformed despite synchronous global recovery, reflecting US tax-cut tailwind.
2020-2021 pandemic recovery: DAX fell to 8,500 (March 2020) then recovered to 16,000 by end of 2021 (+88 percent peak-to-peak). SPY fell 34 percent then recovered +95 percent peak-to-peak. SPY outperformance reflected work-from-home tech beneficiaries.
2022 Russia invasion: DAX fell from 16,000 to 11,800 (October 2022 trough, -26 percent). SPY fell from 4,800 to 3,600 (-25 percent peak-to-trough). DAX underperformed modestly due to German energy crisis specific impact.
2024-2026 AI era: DAX from 16,750 (early 2024) to 24,129 (April 2026, +44 percent in EUR terms, +37 percent in USD terms). SPY from $470 to $708 (+51 percent). SPY outperformance reflects AI capex narrative.
The pattern: SPY tends to outperform DAX during US-led growth narratives and global liquidity expansion phases. DAX outperforms during global manufacturing cycle expansions or European-specific recoveries.
How the Pair Performs in Stress
Stress history shows specific DAX-vs-SPY patterns. 2008-09 GFC: DAX fell from 8,000 to 3,700 (-54 percent peak-to-trough); SPY fell 57 percent. Roughly parallel decline.
2011 European debt crisis: DAX fell from 7,500 to 5,000 (-33 percent peak-to-trough September 2011); SPY fell 19 percent. DAX/SPY underperformance gap approximately 14 percent (regional crisis specific to Europe).
2020 COVID flash crash: DAX fell from 13,800 to 8,500 (-38 percent March 2020); SPY fell 34 percent. DAX/SPY gap approximately 4 percent.
2022 Russia invasion: DAX fell from 16,000 to 11,800 (-26 percent peak-to-trough October 2022); SPY fell 25 percent. Roughly parallel decline (DAX recovered faster as Russia gas crisis stabilized).
2026 Iran war: DAX roughly flat (Germany less directly affected by Middle East shock); SPY down approximately 8 percent peak-to-trough. DAX/SPY ratio expanded approximately 8 percent.
The pattern: DAX/SPY compresses during European-specific crises (2011) and US-led recoveries. The pair expands during US-specific shocks (2026) where Germany is insulated.
Volatility and Trading
DAX realized volatility approximately 18-25 percent annualized vs SPY 13-18 percent. The 1.2-1.5x ratio reflects DAX cyclical sensitivity and currency exposure (EUR/USD translation adds 5-7 percent annualized vol for USD-based investors).
60-day rolling correlation between DAX (USD terms) and SPY averages 0.65-0.80 (positive but variable). During global risk-off correlation rises to 0.85+. During US-specific events correlation drops to 0.40-0.55. Beta of DAX to SPY approximately 1.10-1.30 over 2020-2026.
For pair-trade implementation, DAX exposure through DAX futures (FDAX on Eurex), EWG ETF (iShares MSCI Germany, USD-quoted), DXGE (Wisdomtree Germany Hedged, USD-currency-hedged version) or German ADRs (SAP). SPY exposure through SPY ETF, IVV, or VOO.
The pair has produced cyclical returns. 2024-2026 era: long SPY short DAX (USD terms) gained approximately 13 percentage points cumulative. 2011 European debt crisis: long SPY short DAX gained 14 percentage points.
Reading the Pair as a Trading Tool
For pair traders comparing DAX to SPY, focus on relative performance ratios rather than absolute index values. Convert to common currency (USD) for like-for-like comparison.
Current setup: DAX 24,129 in EUR, EUR/USD 1.168, equivalent DAX USD value of approximately 28,200 in USD-equivalent points. SPY $708 in USD. The relative performance ratio depends on starting point chosen.
Long DAX / short SPY (USD terms) captures global manufacturing cycle recovery scenarios: benefits from China growth recovery, EU defense + infrastructure capex acceleration, US tech multiple compression, EUR/USD strength. Long SPY / short DAX captures continued US tech-led rally + German headwinds: benefits from AI capex, German auto compression, dollar strength, China weakness.
Position sizing: DAX 18-25 percent annualized vol vs SPY 13-18 percent (1.2-1.5x). The pair has produced cyclical returns: 2024-2026 long SPY short DAX (USD) gained +13pp; 2011 European debt long SPY short DAX gained +14pp; 2017-2018 global expansion long SPY short DAX gained +5pp.
Most actionable when global manufacturing cycle direction divergent from US tech narrative.
How DAX-vs-SPY Compares to Other Country Pairs
DAX/SPY captures Germany-specific industrial-cyclical exposure vs US tech-led broad-market. Compared to other country pairs.
Vs FXI/SPY: FXI (China large-cap) captures China growth vs US. China more cyclical to US in growth-focused regime; Germany more cyclical to global manufacturing.
Vs EWJ/SPY: EWJ (Japan) captures Japan vs US. Japan currency-driven (yen weakness benefits exports); Germany more euro/structural-driven.
Vs FTSE/SPY: FTSE 100 (UK) captures UK vs US. FTSE has heavy energy + materials exposure (~22 percent), making it commodity-driven. DAX is more pure industrial-cyclical.
Vs CAC 40/SPY: CAC 40 (France) captures France vs US. CAC more luxury/consumer-discretionary heavy (LVMH, L'Oreal). DAX more industrial-heavy.
Vs Euro Stoxx 50/SPY: Euro Stoxx 50 captures broader Eurozone vs US. DAX is German subset with ~30-40 percent overlap. DAX provides cleaner Germany exposure.
For allocator monitoring, DAX/SPY serves as the German industrial-cyclical vs US tech gauge. April 2026 reading: SPY outperforming on AI capex narrative; DAX held back by German auto headwinds despite Siemens Energy strength. The pair complements EWG/SPY (broader Germany exposure) for comprehensive Germany exposure read.
Forward View: Watch EU Fiscal Acceleration
DAX 24,129 (April 25 2026), SPY $708. DAX 2026 YTD: Siemens Energy +50 percent (electrification leader); SAP -33 percent YTD despite cloud strength. EUR/USD 1.168.
Forward-looking through 2026: German fiscal expansion (500 billion EUR infrastructure fund March 2025) provides multi-year tailwind to defense, infrastructure, electrification. EU defense capex acceleration supports German industrial sector. China growth recovery would catalyze German auto and industrials. US tech-led rally exhaustion would compress SPY relative to DAX.
Risk factors: continued China weakness; sustained dollar strength; trade barriers escalation hurting German auto exports; SAP additional weakness on cloud competition. Watch EU defense and infrastructure capex announcements for catalysts. Watch China stimulus for export demand recovery. Watch EUR/USD direction (above 1.20 supports DAX in USD; below 1.10 hurts).
Expected DAX continuation in 24,000-25,500 range absent major catalyst. Mean reversion vs SPY would require either US tech multiple compression or German fiscal acceleration. The pair offers leading-indicator characteristics for global manufacturing cycle vs US tech narrative.
Conditional Forward Response (Tail Events)
How S&P 500 ETF (SPY) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in DAX 40. Computed from 1,238 aligned daily observations ending .
Following these triggers, S&P 500 ETF (SPY) rises 0.05% on average over the next 5 sessions, versus an unconditional baseline of +0.26%. 123 qualifying events; S&P 500 ETF (SPY) closed positive in 54% of them.
Following these triggers, S&P 500 ETF (SPY) rises 0.15% on average over the next 5 sessions, versus an unconditional baseline of +0.26%. 123 qualifying events; S&P 500 ETF (SPY) closed positive in 54% of them.
Past behavior in the tails is descriptive, not predictive. Mean response is the simple arithmetic mean of compounded 5-day forward returns following each trigger event; baseline is the unconditional mean across the full sample window. Edge measures the gap between the two.
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Frequently Asked Questions
What are DAX and SPY?+
DAX 40 is the German large-cap equity benchmark covering top 40 most liquid German stocks on FWB Frankfurt Stock Exchange. Currently at 24,129 (April 25 2026, lost ~2.3% for week). DAX expanded from DAX 30 to DAX 40 in September 2021. Industrial sector dominates ~33%, software (SAP) ~10%, financials ~15%, auto ~10%. DAX is total return index (dividend reinvested since 1988). SPY (SPDR S&P 500 ETF, AUM ~$560 billion) tracks cap-weighted S&P 500 with price $708. DAX captures global manufacturing cycle exposure; SPY captures US tech-led broad-market exposure.
How do DAX and SPY diverge?+
Fundamentally different sector compositions. DAX industrial-cyclical heavy (33% industrial); SPY tech-heavy (top 7 mega-cap tech ~32%). DAX outperforms during global manufacturing expansion (China demand recovery, US capex, EU stimulus). SPY outperforms during US tech-led expansion (AI capex, mega-cap dominance). 2024-2026 era US tech-led: NVDA +12x peak-to-peak, hyperscaler $400B+ annual AI capex. Correlation 0.65-0.80 normal. During global risk-off rises to 0.85+. During US-specific events drops. Beta of DAX to SPY 1.10-1.30. DAX realized vol 18-25% vs SPY 13-18%.
What is DAX composition?+
Top constituents (April 2026): SAP largest weight ~10% (despite -33% YTD); Siemens ~9%; Allianz ~7%; Linde ~6%; Deutsche Telekom ~5%; Volkswagen, BMW, Mercedes-Benz combined ~10%; Siemens Energy ~4% (after +50% rally). DAX is total return index (dividend reinvested since 1988), distinguishing it from S&P 500 (price index). Dividend reinvestment provides ~200-300bp additional annual return for DAX holders. DAX free-float adjustment removes inside ownership stakes. 2024-2026 era saw strong rotation within DAX: industrials/electrification gained at expense of auto/energy.
How has DAX performed long-term vs SPY?+
DAX rose ~8x from 1992 to 2026 (8% annualized). S&P 500 rose ~11x same period (8.5% annualized excluding dividends, 11.5% including dividends total return). Gap reflects compositional differences and currency dynamics. DAX hit harder by major European crises (2008 GFC, 2011 European debt, 2020 COVID, 2022 Russia). DAX benefited from European recoveries (2009-2015, 2017-2021). 2024-2026: DAX +30% in EUR terms; SPY +50% in USD. EUR/USD strengthened 1.10 to 1.168 (+5.8%) partially offsetting. Net DAX in USD ~+37% vs SPY +50% (gap ~13% over 28 months).
How does the pair perform through macro cycles?+
2017-2018 global expansion: DAX +12% to 13,500 peak Jan 2018; SPY +17%. SPY outperformed (US tax-cut tailwind). 2020-2021 pandemic recovery: DAX fell to 8,500 then to 16,000 by end 2021 (+88%); SPY fell -34% then +95%. SPY outperformance from work-from-home tech. 2022 Russia: DAX 16,000 to 11,800 (-26%); SPY -25%. DAX modestly underperformed (German energy crisis). 2024-2026 AI era: DAX 16,750 to 24,129 (+44% EUR, +37% USD); SPY $470 to $708 (+51%). SPY outperformance reflects AI capex narrative. Pattern: SPY outperforms during US-led growth and global liquidity expansion. DAX outperforms during global manufacturing cycle or European-specific recoveries.
How does the pair perform in stress?+
2008-09 GFC: DAX 8,000 to 3,700 (-54%); SPY -57%. Roughly parallel. 2011 European debt: DAX 7,500 to 5,000 (-33% Sep 2011); SPY -19%. DAX/SPY underperformance gap ~14% (regional crisis). 2020 COVID: DAX 13,800 to 8,500 (-38%); SPY -34%. Gap ~4%. 2022 Russia: DAX -26% peak-to-trough Oct 2022; SPY -25%. Parallel (DAX recovered faster as gas crisis stabilized). 2026 Iran war: DAX flat; SPY -8%. DAX/SPY expanded ~8%. Pattern: DAX/SPY compresses during European-specific crises (2011) and US-led recoveries. Expands during US-specific shocks (2026).
How volatile is the pair?+
DAX realized volatility 18-25% annualized vs SPY 13-18% (1.2-1.5x ratio reflects cyclical sensitivity and currency exposure - EUR/USD translation adds 5-7% annualized vol). 60-day rolling correlation 0.65-0.80 (positive but variable). During global risk-off rises to 0.85+. During US-specific events drops to 0.40-0.55. Beta DAX to SPY 1.10-1.30. DAX exposure: DAX futures (FDAX on Eurex), EWG ETF (iShares MSCI Germany USD), DXGE (Wisdomtree Germany Hedged USD-hedged), or German ADRs (SAP). SPY exposure: SPY ETF, IVV, VOO. Pair has produced cyclical returns: 2024-2026 long SPY short DAX (USD) gained +13pp; 2011 European debt long SPY short DAX +14pp.
How do I trade DAX vs SPY?+
For pair traders, focus on relative performance ratios rather than absolute index values. Convert to common currency (USD) for like-for-like comparison. DAX 24,129 EUR, EUR/USD 1.168, equivalent ~28,200 USD-points. SPY $708. Long DAX / short SPY (USD) captures global manufacturing cycle recovery: China growth recovery, EU defense + infrastructure capex acceleration, US tech multiple compression, EUR/USD strength. Long SPY / short DAX captures continued US tech-led rally + German headwinds: AI capex, German auto compression, dollar strength, China weakness. Position sizing: DAX 18-25% vol vs SPY 13-18% (1.2-1.5x). Watch EU defense/infrastructure announcements; China stimulus; EUR/USD direction.
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Data sourced from FRED, CoinGecko, CBOE, and other providers. This page is for informational purposes only and does not constitute financial advice. Past performance does not guarantee future results.