The DAX index continues to decline amid geopolitical uncertainty and surging oil prices, with investors growing cautious about the economic outlook.

Germany’s DAX index fell by approximately 0.5% in early trading, dropping to around 26,200 points. This marks a continued retreat from last week’s record high of 26,573 points, as investor sentiment remains subdued. Concerns over escalating tensions in the Middle East, particularly between Iran and the United States, are dampening market optimism.

The geopolitical situation has intensified following the expiration of a key framework agreement between Iran and the U.S., with no signs of a resolution. U.S. President Donald Trump has ruled out extending a ceasefire agreement, while Iran has issued warnings of heightened conflict. Rising oil prices reflect these uncertainties, with Brent crude surpassing $90 per barrel, raising fears of inflationary pressures that could further strain global markets.

Adding to the pressure, bond yields have surged to 15-year highs in Germany, France, and the U.S., making fixed-income investments more attractive compared to equities. Meanwhile, positive domestic economic data, such as a 15.1% increase in housing permits in the first half of the year, has failed to offset broader concerns. Analysts warn that rising energy costs and geopolitical risks could continue to weigh on investor confidence in the weeks ahead.