The Frankfurt DAX index surged approximately 1.6%, closing at 23,642 on Tuesday — marking its peak since June 16. This upswing was fueled by robust fiscal spending initiatives, encouraging economic reports, and indications of diminishing tensions in the Middle East. Germany's cabinet has sanctioned draft budgets that feature an investment increase to €115.7 billion for 2025 and €123.6 billion for 2026, a significant rise from the €74.5 billion in 2024, all geared towards boosting economic growth. Additionally, the government unveiled its intention to elevate defense spending to 3.5% of GDP by 2029, anticipating a pivotal NATO summit centered on defense expenditures. Furthermore, in his address to Congress, Federal Reserve Chair Jerome Powell reiterated his cautious approach to rate cuts, underscoring the bank's dedication to controlling inflation amidst persistent global uncertainties. Notably, the rally was spearheaded by travel and building materials sectors, with Deutsche Lufthansa experiencing a 7% ascent and Heidelberg Materials appreciating nearly 6%, reflecting investor appetite for risk amid the sustained Israel-Iran ceasefire. Deutsche Bank, Siemens Energy, and Volkswagen also made notable gains.