FX.co ★ DAX Slides As Far-right Surge In EU Elections Sparks Uncertainty

German stocks dropped on Monday as optimism for U.S. rate cuts waned and the euro fell to a one-month low against the dollar. This decline followed significant gains by far-right parties in the European Parliament elections.

In an unexpected turn of events, French President Emmanuel Macron called for a snap election after a devastating defeat, labeling it 'an act of confidence.' Similarly, German Chancellor Olaf Scholz faced considerable losses. Despite these setbacks, centrist parties across the bloc largely maintained their positions, complicating efforts for mainstream parties to form majorities necessary for passing legislation.

Attention has also turned to the upcoming Federal Reserve policymakers' meeting on Wednesday, where an update on rate forecasts is expected, though no changes in policy rates are anticipated.

The benchmark DAX index fell by 129 points, or 0.7 percent, to 18,427, following a half-percent decline on Friday.

Banks experienced losses, with Commerzbank dropping 1.3 percent and Deutsche Bank losing 0.5 percent.