The German stock market experienced a notable decline on Tuesday, with the DAX index closing at 23,673 points, a decrease of 1.0 percent compared to the previous trading day. The index initially opened at the previous day’s level but subsequently trended downwards throughout the morning and remained in negative territory into the afternoon.
Jochen Stanzl, chief market analyst at CMC Markets, attributed the shift in sentiment to a pullback in major US indices after a period of gains. He commented that the possibility of the European Union accepting tariffs on goods from the United States was creating concern. “The legal framework for tariffs of 25 percent on steel and aluminum and 50 percent on cars and auto parts originated during Donald Trump’s first term. Currently, it doesn’t appear likely that the EU can effectively resist these tariffs, which are considered economically damaging” Stanzl noted.
The trade conflict also overshadowed comments from Federal Reserve Chairman Jerome Powell in Sintra, where he did not definitively rule out a potential interest rate cut in the near future. However, Stanzl pointed to better-than-expected Purchasing Managers’ Index (PMI) data released alongside Powell’s speech, which has dampened expectations for two rate cuts in the US this year.
Among individual stocks, shares of Zalando, Bayer and Adidas led gains in Frankfurt as the market closed. Siemens Energy shares were the weakest performers.
In other market news, the price of natural gas decreased by two percent, with a megawatt-hour (MWh) contract for August delivery costing 34 euros. This translates to a consumer price of approximately eight to ten cents per kilowatt-hour (kWh), including ancillary costs and taxes, if the price level persists.
Conversely, oil prices saw a slight increase, with a barrel of North Sea Brent crude trading at $66.85 at approximately 5:00 PM CET, up 0.2 percent or eleven cents from the previous day’s close.
The euro weakened slightly against the US dollar during Tuesday afternoon, with one euro trading at $1.1772.
