The current development on the German stock market is characterized by a persistent phase of weakness: the DAX is facing its fifth consecutive loss day, marking the longest negative streak of the current trading year. In early trading on June 12, 2025, the leading index was about 0.7 percent lower at around 23,785 points. The MDax and the Eurozone’s leading index EuroStoxx 50 also showed weakness.
Background and Causes
Disappointment over Trade Agreements: The initial hope for positive developments from the negotiations between the USA and China has vanished. An official statement from China is still pending, fueling uncertainty.
Wait-and-See Stance on EU-US Trade Agreement: The market is also waiting for progress on a potential trade agreement between the EU and the USA, which further intensifies uncertainty.
Geopolitical Tensions: The fear of a possible Israeli attack on Iran and the reduction of US embassy personnel in Iraq weigh on market sentiment. There is concern that retaliatory strikes against US bases could follow if escalation occurs.
Consolidation Phase: Analysts describe a consolidation in the market – “the air has gone out” – after optimism about economic recovery or political solutions has quickly faded.
Impacts for Investors
The current situation has several consequences for investors:
- Increased Volatility: The uncertainty leads to increased volatility in the markets.
- Cautious Investment Decisions: Many investors are holding back or reducing risk positions.
- Sectoral Differences: Certain sectors or companies may be more affected than others; currently, stocks such as Prosus and Oracle are also in focus.
- Long-Term Outlook Remains Unclear: As long as there are no clear signals from politics or the economy, the market climate remains tense.
Conclusion
The DAX is facing its fifth consecutive loss day – a sign of a pronounced consolidation phase following previous optimism. Geopolitical risks and uncertainties regarding international trade agreements continue to weigh on sentiment in the German stock market. For investors, this means increased caution and a potentially longer phase of lower price gains or further setbacks.