FRANKFURT (dpa-AFX): DZ Bank has adopted a more optimistic outlook for the U.S. stock market and the German benchmark Dax index. Currently, the semiconductor boom is overshadowing significant geopolitical and economic disruptions triggered by the de facto closure of the Strait of Hormuz amid the conflict involving Iran, analyst Birgit Henseler wrote in an outlook published on Thursday.

Accordingly, the expert raised her year-end forecast for the broad-based U.S. S&P 500 index from its current level of 7,300 points to 8,500 points. She now projects the German Dax to reach 27,500 points, up from a previous forecast of 25,000 points. This represents an upside potential of more than 13 percent from current levels.

"What is driving prices higher are semiconductors," Henseler continued. Global chip sales grew by approximately 80 percent year-over-year in March. According to the expert, this is primarily due to the expansion of infrastructure surrounding Artificial Intelligence. Consequently, earnings growth in the technology sector is accelerating sharply, providing a particular boost to U.S. stock exchanges.

The Dax is also holding its ground despite recurring setbacks, according to Henseler. "The primary growth drivers are the large industrial companies. The technology and financial sectors are also providing momentum." Average earnings expectations are 15 percent above the previous year. In addition to developments surrounding AI, major German corporations continue to benefit from a multi-billion fiscal package.

However, the geopolitical situation remains fragile and poses a risk to equity markets, Henseler warned. The expert pointed to the widely divergent positions between the U.S. and Iran, specifically regarding the Iranian nuclear program. Despite the ceasefire in effect since April, this fragility is evident in a constant interplay of diplomatic overtures and new incidents.

Nevertheless, DZ Bank's primary scenario is based on the assumption of a de-escalation in the Persian Gulf, as a relaxation of tensions is in the interest of both parties. On the Iranian side, the blockade has caused foreign exchange earnings to collapse, as oil exports constitute the majority of its trade. On the U.S. side, according to Henseler, energy prices and the rising cost of living are weighing on the U.S. President's approval ratings./la/jsl/jha/