DAX Dips Further

The DAX 40 extended losses to over 2% on Wednesday, trading at more than one-week lows, amid heightened geopolitical concerns. At the NATO summit, President Trump said he believes the US-Iran memorandum of understanding is "over" and that negotiations with Tehran are a waste of time, His remarks raised fears of renewed military action and oil supply disruptions through the Strait of Hormuz, fueling inflation concerns and reinforcing expectations of further ECB rate hikes. Market sentiment was already fragile following new exchanges of attacks between the two countries and Washington's reinstatement of sanctions on Iran's oil sector after alleged attacks on three ships in the Strait of Hormuz. Meanwhile, investors continued reducing exposure to semiconductor and AI-related stocks amid growing concerns over high valuations. Losses were broad-based, led by banks, autos, software, technology, industrials, and consumer discretionary stocks, while utilities remained the lone bright spot.

The DAX 40 fell around 1% toward 25,200 on Wednesday, extending losses from the prior day, as escalating tensions in the Middle East dampened risk appetite. The United States launched multiple strikes against Iran and reinstated sanctions targeting its oil sector, following alleged Iranian attacks on three vessels in the Strait of Hormuz. Oil prices pushed higher, raising concerns over inflation and higher interest rates ahead of the Fed's June meeting minutes this evening. At the same time, investors continued reducing exposure to semiconductor and AI-related stocks amid increasing unease over elevated valuations. Selling was widespread across sectors, sparing only utilities. Among individual stocks, Vonovia (-3.2%), Rheinmetall (-3.1%), MTU Aero Engines (-2.5%), Deutsche Bank (-2.5%), and SAP (-2.2%) posted the biggest losses. Lufthansa dropped 4% after Cititgroup cut its rating to "sell" from "neutral". By contrast, E.ON, RWE and Scout24 advanced the most, adding between 0.8%-1.3%.

The DAX Index is dropping 240 points. Leading the losses are Vonovia (-3.04%), MTU Aero Engines AG (-2.96%) and Rheinmetall (-2.89%). Top gainers were Scout24 (1.29%), E.ON (0.97%) and RWE (0.85%).