The German market index, the DAX, which initially had a positive start to the trading week on Monday, plunged sharply into negative territory by midday. By 12:30 p.m., the leading index was calculated at approximately 24,200 points, marking a drop of 0.4 percent from the official close on Thursday.
In the equity price lists, stocks of major car manufacturers struggled following recent tariff threats issued by Washington. Additionally, RWE and Deutsche Post faced significant downward pressure. The few notable gainers included Rheinmetall, Brenntag, and Symrise shares.
Andreas Lipkow, Chief Market Analyst at CMC Markets, noted that since the recent impressive U.S. earnings season, particularly for semiconductor and Big Tech companies, the markets are now slowly entering a phase driven by macro data. Moving forward, the focus is expected to intensify on the U.S. labor market and future U.S. monetary policy, a concern fueled by speeches from eleven American central bank governors.
Lipkow warned that rising energy costs will not be easily absorbed by the real economy. Furthermore, the situation in the global fertilizer market is likely to cause price turbulences within the food sector. He stated that these downstream effects make it challenging for many investors to establish a clear overarching context between quarterly earnings reports and current consumer behavior, noting that changes are already visible in smaller, secondary markets.
Regarding the DAX specifically, the geopolitical situation in the Middle East remains a dominant theme. While the start of the annual general meeting season is directing funds toward shareholder dividends, it remains doubtful whether these funds will be reinvested back into European equities. Key company reports are anticipated this week in Europe from firms such as Novo Nordisk, HSBC, and Shell. Meanwhile, in the United States, Palantir is set to present its results and offer insight into the Artificial Intelligence sector.
The European common currency traded lower on Monday afternoon: one Euro bought 1.1696 US Dollars, and consequently, one Dollar sold for 0.8550 Euros.
The price of gold also fell noticeably, dropping to $4,540 per fine ounce in the afternoon, representing a 1.6 percent decrease. This translates to a price of €124.80 per gram.
In contrast, the price of oil rose sharply. At noon Central European Time on Monday, a barrel of Brent crude oil (North Sea grade) cost $113.50, reflecting a 4.9 percent increase from the closing price of the previous trading day.