DAX Rises 1.42% as Frankfurt Stocks Recover from Friday's Slump

The DAX index rose 1.42% to 23,757.69 points on Monday after a 2.7% drop on Friday, driven by economic concerns. European bank stocks gained, with Deutsche Bank shares up 3.3% and Commerzbank shares rising 5%. Defense stocks were boosted by a positive comment from investment firm Jefferies, with Rheinmetall shares gaining 3.4% and Hensoldt rising 2.2%. Lufthansa shares rose 1% after a more confident assessment by Barclays. Stabilus shares fell 11.4% due to a gloomy outlook.

European markets rebounded on Monday, with the DAX index rising 1.42% to 23,757.69 points after a 2.7% drop on Friday. The recovery was driven by economic concerns and a positive outlook from investment firms [2]. European bank stocks gained, with Deutsche Bank shares up 3.3% and Commerzbank shares rising 5%. Defense stocks were boosted by a positive comment from investment firm Jefferies, with Rheinmetall shares gaining 3.4% and Hensoldt rising 2.2%. Lufthansa shares rose 1% after a more confident assessment by Barclays. Stabilus shares fell 11.4% due to a gloomy outlook.

Investors were buoyed by the latest economic data, which indicated a potential rate cut by the U.S. Federal Reserve next month. The economic data slate was largely empty in Europe on Monday, but factory orders for June could provide more clues as to how corporate America is coping with the new tariffs regime [2].

The STOXX 600 Europe Banks index has been in an uptrend during five of the last six trading sessions, buoyed by improved profits and resilience amid the tariffs imposed by U.S. President Donald Trump. Shares of HSBC, Barclays, and Santander hit their 2008 highs [3]. The gains were bolstered by a report from the European Banking Authority (EBA) on Friday, which presented the outcome of its latest health check of the sector. The STOXX 600 Europe Banks index rallied nearly 2% at the open on Monday [3].

Swiss stocks slumped to their lowest in more than three months as investors digested a hefty 39% U.S. tariff rate. Swiss pharma stocks Novartis and Roche slipped 1.3% and 2.3%, respectively, after U.S. President Donald Trump sent letters to the leaders of 17 major pharmaceutical companies directing them to slash U.S. prescription drug prices. Swiss luxury companies Richemont and Swatch, among the most exposed to tariffs, fell more than 1.5% each [1].

UBS slipped 2.5% after the bank said it would pay $300 million to resolve U.S. mortgage securities cases related to misselling of mortgage-linked investments. Lloyds was a bright spot, gaining 6.3% to the top of the Stoxx 600 index after the UK's Supreme Court overturned a ruling on motor finance commissions in positive news for banks [1].

Oil prices steadied Monday, even after a group of top producers agreed to another large production hike in September, adding to global supply. Brent futures slipped 0.2% to $69.80 a barrel, and U.S. West Texas Intermediate crude futures rose 0.3% to $67.53 a barrel. The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September [2].

References:
[1] Reuters. (2025, Aug 4). European shares tick higher after Friday's selloff; Swiss stocks slump. Retrieved from https://www.reuters.com/markets/europe/european-shares-tick-higher-after-friday-selloff-swiss-stocks-slump-2025-08-04/
[2] Investing.com. (2025, Aug 4). European stocks rise as investors buy the dip at start of new week. Retrieved from https://www.investing.com/news/stock-market-news/european-stocks-rise-investors-buy-the-dip-at-start-of-new-week-4167061
[3] Livemint. (2025, Aug 4). European bank stocks surge to highest level since 2008 global financial crisis. Retrieved from https://www.livemint.com/market/stock-market-news/european-bank-stocks-surge-to-highest-level-since-2008-global-financial-crisis-whats-behind-the-bull-run-11754295471361.html