Middle East risk returns to the foreground
The DAX has fallen back below the 25,000 mark at the start of the new trading week, reflecting a sharp increase in geopolitical uncertainty. With US-Iran negotiations having collapsed and the ceasefire effectively over, the conflict in the Middle East has re-emerged as a major market risk alongside existing valuation concerns around high-flying technology stocks.
Although officials continue to refer to ongoing technical discussions, attacks on commercial shipping and reciprocal military strikes have intensified. Energy markets have responded accordingly, with Brent crude trading around $79 per barrel and maintaining an upward trajectory.
Asian markets and chip stocks come under pressure
Asian equity markets reflected the heightened uncertainty, with sharp declines across Japan, South Korea and China. Semiconductor stocks, including SK Hynix and Samsung Electronics, came under renewed selling pressure as profit-taking accelerated after recent gains.
Investors are increasingly concerned that any disruption to shipping through the Strait of Hormuz could tighten energy supplies, raise input costs and increase the risk of another global slowdown. That would be particularly challenging for export-sensitive markets such as Germany, where industrial margins remain exposed to energy and demand shocks.
US earnings season becomes the next test
In Frankfurt, nearly all DAX constituents are trading lower, with Deutsche Telekom standing out as the only notable exception. Today's session may give investors a brief opportunity to reassess positioning before the US earnings season begins on Tuesday, 14 July, when corporate updates are expected to become the next major driver of market sentiment.
