DAX Falls 1.7% on July 9 as Iran Escalation Shakes European Markets

Germany’s DAX index fell 1.7% to 25,036 on July 9 after U.S. President Donald Trump declared the Iran ceasefire “over” and announced fresh military strikes. The Frankfurt benchmark suffered its worst day in weeks as oil prices surged nearly 5% to $78.02 per barrel, rattling investors across Europe. Meyka rates the DAX a C+ with a 12-month forecast of 26,454, suggesting limited upside from current levels despite the volatility.

Why the DAX tumbled on Trump’s Iran declaration

The DAX fell 1.7% to 25,036 on July 9, extending losses from the prior session as President Trump declared the ceasefire “over” at the NATO summit in Ankara. The U.S. then launched fresh airstrikes on Iran, which responded by targeting U.S. allies in the Middle East. Frankfurt’s technology and industrial-heavy composition left it particularly exposed to the dual shock of geopolitical risk and energy price volatility.

Oil prices spike, dragging down key sectors

Brent crude rose 5.2% to $78.02 per barrel on Wednesday, the highest since June 19, as traders feared renewed disruption to shipping through the Strait of Hormuz. Within the DAX, real estate firm Vonovia fell 3.2%, defence contractor Rheinmetall dropped 3.1%, and software giant SAP slid 2.2%. Airline Lufthansa suffered the steepest loss, falling 4% after Citigroup downgraded it to sell, citing the spike in oil prices and travel demand concerns.

Meyka data points to limited downside from here

Meyka grades the DAX a C+ with technical indicators showing mixed signals: RSI at 49.97 suggests neutral momentum, while the Bollinger Bands upper band sits at 25,751. The 12-month price forecast of 26,454 implies just 5.6% upside from July 9’s close. With the index down 1.7% on the day but up 1.9% year-to-date, the data suggests the selloff may be overdone relative to medium-term fundamentals, though geopolitical risk remains elevated.

European markets stabilize as investors assess peace prospects

By Thursday, July 10, European shares rebounded as oil prices eased and markets assessed the escalating conflict’s implications for efforts to end the war. The pan-European STOXX 600 rose 0.5%, helped by a rebound in tech stocks. Trump also said he did not expect a return to full-scale war, easing some of the extreme worries that had gripped traders on Wednesday. The DAX’s recovery from intraday lows suggests the market may be pricing in a lower probability of prolonged Middle East disruption.

Final Thoughts

The DAX’s 1.7% drop on July 9 reflects genuine geopolitical risk, but Meyka’s C+ grade and 26,454 forecast suggest the selloff may overstate the long-term damage. Oil prices and Trump’s rhetoric will remain the key drivers in the near term.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.