FX.co ★ DAX at 1-Week Low

The DAX 40 declined 0.5% to around 25,870 on Wednesday, its lowest level in a week, reflecting broad weakness across European equity markets. Sentiment deteriorated as the dispute between the US and Iran over control of the Strait of Hormuz intensified, driving oil prices higher and stoking worries about renewed inflationary pressures and the outlook for interest rates. The US military reported that it had destroyed five Iranian crude oil tankers, sinking one of them, in retaliation for Tehran’s attack on a US warship.

Against this backdrop, the ECB is widely expected to raise interest rates by 25 basis points on Thursday, with investors closely monitoring any guidance on the future trajectory of monetary policy. Energy-intensive industrials and banking stocks were among the worst performers on the day. Rheinmetall fell 3%, making it the index’s weakest constituent and erasing the previous session’s gains. Beiersdorf lost nearly 2% after Deutsche Bank cut its rating on the stock from “Hold” to “Sell.”