The German DAX index closed slightly lower, reflecting investor hesitation driven by geopolitical tensions in the Middle East and rising bond yields, which have made equities less appealing.

The German DAX index ended the trading day at 26,091.33 points, marking a modest decline of 0.14%. Investor sentiment remained subdued as concerns over escalating tensions in the Middle East and the unresolved situation in the Strait of Hormuz weighed heavily on the market. These geopolitical uncertainties have dampened enthusiasm for riskier assets like stocks.

Adding to the cautious mood, bond yields have surged to multi-decade highs, with key government bonds from the United States, Germany, and Japan offering significantly higher returns. The appeal of these safer investments has drawn attention away from equities, particularly in sectors sensitive to interest rate fluctuations. Technology stocks, for instance, continued to struggle, with the semiconductor index dropping 2% and shares of Infineon leading losses with a nearly 4% decline.

Meanwhile, the global chip industry faced additional pressure amid doubts about the long-term profitability of investments in artificial intelligence infrastructure. In Asia, concerns about the financial stability of SoftBank, which is reportedly planning a bond issuance to fund its AI ambitions, further unsettled investors. However, there was a bright spot in the market as Chinese robotics company Unitree made a spectacular debut on the Shanghai Stock Exchange, with its stock surging over 600% shortly after trading began, driven by strong interest in its AI-driven humanoid robots.