The German Dax index significantly declined on Tuesday, closing at 22,327 points, a 3.5 percent drop from the previous day’s close. The index had a weak start and continued to lose ground throughout the day. Continental, FMC and Daimler Truck were among the stocks that fell the most, with Continental’s shares plummeting by around 12 percent. Only a few companies, such as E-On, Beiersdorf, Henkel, Vonovia and Fresenius, managed to end the day in the green.
According to Jochen Stanzl, chief market analyst at CMC Markets, the market’s reaction was not surprising, given the growing concerns about a potential global trade war. “The headlines about a looming global trade war have become too loud to be ignored on the Frankfurt stock market, which is dominated by companies that generate almost two-thirds of their revenue outside the US and have a strong presence in cyclical sectors such as automobiles and industry” Stanzl said. “The Dax is highly dependent on the global trade and thus also on the disruptions that could arise from a global trade war. Continental’s warning about a weak, domestically driven automotive demand and trade-related tensions in 2025 brought the problems to the doorstep of the Dax.”
Stanzl also mentioned that the market is waiting to see if other themes, such as artificial intelligence, pricing power, a business-friendly government and Rheinmetall, will be able to shield the index from a larger correction. “At least, the trade policy implications are getting closer and are hardly audible anymore. Trump has not yet imposed direct tariffs on Germany or the European Union” the analyst said.
The analyst also attributed the negative sentiment on Wall Street to a weaker US economic growth, with several indicators pointing to a slowdown. “Single voices within the US Federal Reserve emphasize publicly that trade disruptions do not only lead directly to higher import prices, but also indirectly increase production costs, which can dampen long-term economic growth” Stanzl said. “The sell-off in New York is accelerating because it did not come to a last-minute solution before the tariffs took effect.”
Meanwhile, the natural gas price fell, with a megawatt-hour of gas for April delivery costing 44 euros, a four percent decrease from the previous day. This implies a consumer price of at least nine to 11 cents per kilowatt-hour, including additional costs and taxes, if the price level remains stable.
The oil price also declined, with a barrel of Brent crude oil costing 70.45 US dollars, a 1.6 percent decrease from the previous day’s close.
The European currency, the euro, was stronger, with one euro costing 1.0525 US dollars and one US dollar being worth 0.9501 euros.