The German DAX slipped 0.6% to 26,410 points by mid-afternoon Monday, retreating from a record high set last week despite a sharp rise in oil prices amid escalating Middle East tensions.
The index held above its 21-day moving average, a key short-term trend indicator, after rebounding last week on signals from U.S. Federal Reserve official Kevin Warsh suggesting a potential rate hike. For August, the DAX remains on track to post a 3% gain.
The MDax of mid-cap companies fell 0.42% to 32,892 points, while the Euro Stoxx 50 edged down 0.1%. U.S. equity benchmarks turned negative at the end of last week and were poised for further modest losses. Asian markets showed little directional movement on Monday.
Portfolio manager Thomas Altmann of QC Partners attributed the oil price increase to reports that the U.S. military had targeted Iranian military sites for the first time since late July. However, equity and bond markets appeared relatively unfazed by the renewed military escalation, with most investors anticipating no large-scale or prolonged conflict.
Jochen Stanzl, chief market analyst at Consorsbank, noted that investors entered the week facing persistent concerns over inflation, unresolved geopolitical risks and expectations of a near-term Fed rate increase. He also highlighted that September historically ranks as the weakest month for equities, raising questions over whether the DAX can defy seasonal trends and continue rising.
The latest escalation followed reports that U.S. forces struck two missile launchers on Iran’s Larak Island to prevent the deployment of new sea mines in the Strait of Hormuz. Iran retaliated by claiming to have attacked two U.S. military bases in Jordan, while the United Arab Emirates reported a drone incident over its territorial waters.
German August consumer price inflation rose to 2.9% year-on-year, up from 2.6% in July and matching forecasts by Landesbank Helaba. The increase, which exceeds the European Central Bank’s 2% target, reinforced expectations that policymakers will raise interest rates at next week’s meeting. Markets have largely priced in such a move.
Zinssensitive sectors came under pressure, with real estate stocks Aroundtown, TAG Immobilien and Vonovia each declining up to 2.9%. U.S. investment bank Goldman Sachs also sharply reduced its price target for Aroundtown. Technology shares such as SAP and semiconductor supplier Aixtron fell around 1% each.
In the SDax small-cap index, OHB surged 11.6% following a major contract award, leading gains for the day and bringing its year-to-date advance to 74%. Sto followed with a 6.2% rise after reporting higher first-half revenue and operating profit despite competitive pressures and rising costs, and confirmed its 2026 outlook.
