FRANKFURT (dpa-AFX) - The German stock market is expected to post moderate gains at Thursday's opening, continuing a pattern of cautious trading as investors await clearer market direction. Market analyst Thomas Altmann from QC Partners noted that "the search for direction continues," with both buyers and sellers holding back until a clearer trend emerges. The prevailing investor motto appears to be "wait and see" amid ongoing uncertainty.

One hour before trading began, the X-Dax indicated modest upward momentum, though this solid start wasn't driven by US market performance. New York exchanges had moved slightly lower after the Xetra close the previous evening, with investors taking a breather following the recent record rally. Commerzbank analysts observed that market participants are showing caution ahead of Friday's release of PCE inflation data, which serves as the Federal Reserve's primary inflation measure.

Defense stocks could remain in focus domestically, with Rheinmetall shares trading near record levels. Automotive stocks are also drawing attention as they seek to confirm a recovery movement triggered by retroactively reduced US import tariffs. Meanwhile, seed producer KWS Saat and biofuel manufacturer Verbio are expected to see activity following recent financial reports and outlook statements.

The upcoming PCE inflation data release on Friday represents a critical moment for global markets, as the figures will significantly influence the Federal Reserve's future interest rate decisions. Higher inflation readings could prompt more restrictive monetary policies, potentially impacting markets worldwide. Medical technology stocks faced pressure due to tariff concerns, following a US Commerce Department announcement regarding potential higher duties on imports of certain medical devices since early September.