The German stock market experienced a significant downturn on Tuesday, with the DAX index closing at 23,673 points – a 1.0 percent decrease compared to the previous day’s close. The index, which began the trading day at the previous close level, entered negative territory by midday and remained in the red throughout the afternoon.
Jochen Stanzl, chief market analyst at CMC Markets, attributed the shift in sentiment to a broader pullback in major indices on Wall Street following a period of gains. He commented that there is a growing perception that the European Union may be compelled to accept tariffs on goods imported from the United States, potentially the least unfavorable outcome. Stanzl noted that the legal framework for tariffs of 25 percent on steel and aluminum and 50 percent on automobiles and auto parts originated during the Trump administration and the EU currently appears unlikely to effectively resist these tariffs, which are seen as economically detrimental.
The ongoing trade conflict also overshadowed comments from Federal Reserve Chairman Jerome Powell, who in Sintra did not rule out a potential interest rate cut in the near future. However, Stanzl pointed out that concurrently released better-than-expected Purchasing Managers’ Index (PMI) data had dampened expectations for two rate cuts in the U.S. this year.
Leading stocks in Frankfurt at the close included shares of Zalando, Bayer and Adidas, while Siemens Energy’s shares finished as the weakest performer.
Meanwhile, the price of natural gas declined, with a megawatt-hour (MWh) of gas for August delivery costing 34 euros, a 2 percent decrease from the previous day. This suggests a consumer price of approximately eight to ten cents per kilowatt-hour (kWh) including ancillary costs and taxes, assuming the price level remains consistent.
In contrast, oil prices saw a slight increase. A barrel of North Sea Brent crude oil traded at $66.85 at approximately 5:00 PM CET, up 11 cents or 0.2 percent from the previous trading day’s close.
The Euro weakened slightly against the U.S. dollar on Tuesday afternoon, with one Euro trading at $1.1772. Consequently, one U.S. dollar was worth 0.8495 Euros.