German equities recovered on Tuesday after a selloff triggered by Middle East tensions, as declining oil prices lifted sentiment across the market. The DAX erased early losses to finish 0.6% higher at 25,739 points, extending a strong weekly opening. The MDax index of mid-cap stocks advanced 1.7% to 31,764.
Oil prices came under pressure during trading after Iran's leadership signaled a willingness to negotiate with the United States. Parliament Speaker Mohammed Bagher Ghalibaf told Iranian media that "diplomacy does not mean capitulation but the transformation of field strength into political gains," according to reports in Tehran. Japanese news agency Kyodo reported that Iran had offered to reopen the Strait of Hormus within seven days if the American blockade were lifted.
The pullback in oil helped dampen inflation anxieties among investors. However, energy price spikes remain a concern for central bankers. ECB Chief Economist Philip Lane said the recent surge in energy costs would keep Eurozone inflation elevated at higher levels for longer than previously anticipated.
Gains in US and Asian markets also supported the German equity index. The Nasdaq 100, which surged strongly the previous day — even after European trading closed — is now back within striking distance of its record set in early June. Shares of Meta Platforms posted their best single-day gain since April 2025, rising more than 11%, buoyed by the strong market reception of its new consumer AI product Muse, launched earlier this month, and positive analyst commentary.
In corporate news, Adidas shares climbed 3.4% after US financial-services firm StoneX issued a buy recommendation. Travel operator Tui saw its shares initially fall more than 2% on concerns over the Iran conflict and a shift toward last-minute summer bookings, but rebounded to close up 2.4%. The company reported preliminary figures showing package-tour booked revenue was 5% lower than in the same period last year. Richard Clarke of Bernstein Research wrote that despite demand concerns, the key data points could have a reassuring character.
Among smaller caps, AI-robotics firm Circus rose over 8% after launching commercial operations in the United Arab Emirates.
On the macro side, the UN General Debate begins in New York, where US President Donald Trump is expected to hold talks with Gulf-state representatives and possibly his Iranian counterpart Massud Peseschkian. Trump is also scheduled to meet Chinese leader Xi Jinping this week, who is visiting the United States from September 23 to 25.
