The German blue-chip index DAX slipped 0.67% to 26,393 points by midday Monday, paring gains from Friday’s record close despite a sharp rise in oil prices driven by escalating Middle East tensions. The index remained above its 21-day moving average, a key short-term trend indicator.
The MDax of mid-cap stocks fell 0.34% to 32,917 points, while the Euro Stoxx 50 declined nearly 0.3%. U.S. stock indexes had already turned negative ahead of the weekend, whereas Asian markets ended Monday mostly modestly higher.
The latest flare-up followed reports that the U.S. military targeted two missile launchers on Iran’s Larak Island, reportedly to prevent the deployment of new naval mines in the Strait of Hormuz. Iran responded by claiming it struck two U.S. military bases in Jordan, while the United Arab Emirates reported a drone incident over its territorial waters. Portfolio manager Thomas Altmann of QC Partners noted that while oil prices rose in response, equity and bond markets showed relative calm, suggesting investors expect the situation to remain contained.
Analysts at Consorsbank highlighted that investors entered the week facing persistent concerns over inflation, unresolved geopolitical risks, and expectations of a Federal Reserve rate hike. September is historically the weakest month for the DAX, raising questions over whether the index can defy seasonal trends.
German inflation data added to the pressure. Landesbank Helaba projected a German consumer price inflation rate of 2.9% for August, exceeding the European Central Bank’s 2.0% target. The forecast was supported by preliminary data from several German states and recent inflation prints from France and Spain. Markets have largely priced in a likely ECB rate hike next week.
Rate-sensitive sectors underperformed, with real estate stocks Aroundtown, TAG Immobilien, and Vonovia down as much as 3.7%. U.S. investment bank Goldman Sachs downgraded its price target for Aroundtown. In technology, SAP and semiconductor supplier Aixtron fell 1.3% and 1.6%, respectively.
Among notable corporate movers, space technology firm OHB surged 7.1% after securing a major contract, leading gains in the SDax. The stock is up 74% year-to-date. Sto advanced 5% after reporting higher half-year revenue and operating profit despite competitive pressures and rising costs, and confirmed its 2026 outlook. Bayer edged 0.5% higher after presenting data at the European Society of Cardiology congress showing its drug Kerendia could benefit patients with hypertensive nephropathy, a kidney condition linked to chronic high blood pressure.
