Frankfurt’s DAX 40 closed about 3.4% lower on Tuesday at 23,753, its weakest level since early December, deepening the sharp losses from the previous session. Sentiment was pressured by mounting uncertainty over the duration of the conflict in the Middle East and its potential fallout for the global economy. A series of retaliatory strikes across the region has intensified worries about sustained disruptions to global energy supplies, raising the risk of renewed inflationary pressures and diminishing expectations for interest rate cuts by major central banks.
Selling was broad-based, with technology, consumer discretionary, banking, insurance, chemicals, pharmaceuticals & healthcare, industrials, and transport & logistics all under heavy pressure, each declining between 4% and 6%. Even defense stocks, which had previously benefited from geopolitical tensions, moved sharply lower, with Rheinmetall down 4%, Renk off 3.7%, and Hensoldt losing 2.6%, underscoring the depth of negative investor sentiment.
Separately, Beiersdorf shares tumbled nearly 20% after the company signaled a weaker outlook for 2026, adding to the overall bearish tone in the market.