German stock market falls 0.6% as Middle East war escalates

The German stock market, including the DAX, MDAX, and Euro Stoxx 50, experienced losses on Thursday due to fears of an escalation of the war in the Middle East. The Israeli military reported attacks on Iran, and US President Donald Trump appeared more open to US involvement. High-ranking US officials are reportedly preparing for a possible attack in the coming days.

Frankfurt (dpa-AFX) - Fears of an escalation of the war in the Middle East continue to weigh heavily on the German stock market. On Thursday, the DAX, MDAX, and Euro Stoxx 50 indices all experienced significant losses.

The DAX, Germany's primary stock market index, fell by 0.6 percent to 23,188 points, marking a return to the level it had at the beginning of May [1]. The MDAX, which tracks mid-cap stocks, dropped 0.8 percent to 29,453 points. The Euro Stoxx 50, a leading index for the eurozone, lost 0.7 percent [1].

The Israeli military reported that it had attacked Iran, targeting sites in Tehran and other areas, including a heavy water reactor near Arak [1]. According to Israeli military sources, Iran had previously fired several missiles at Israel. US President Donald Trump appears more open to US involvement in the Middle East conflict, although negotiations with Iran may still be a consideration [1].

High-ranking US officials are reportedly preparing for a possible attack in the coming days [1]. The situation has also prompted the Group of Seven (G7) leaders to convene for a two-day summit in Canada, starting on Monday, to discuss regional affairs and economic stability [2].

The G7 leaders are expected to address the ongoing conflict between Israel and Iran, as well as the situation in the Indo-Pacific region, where China's military activities are a growing concern [2]. The summit is set to be the first major multilateral event attended by Trump during his second term, and it will be the first time for Canadian Prime Minister Mark Carney, German Chancellor Friedrich Merz, and British Prime Minister Keir Starmer to attend.

The G7 leaders are expected to issue brief "action-oriented" statements rather than a detailed joint statement, reflecting the difficulty of reaching consensus on major global issues under Trump's "America First" agenda [2]. The summit will also include discussions on strengthening supply chains for critical minerals and addressing global economic imbalances.

The ongoing tensions in the Middle East and the potential for further military action are likely to continue to impact global financial markets, including the German stock market. Investors and financial professionals should closely monitor the situation and prepare for potential volatility.

References:
[1] Frankfurt stock market opening - Further losses, Middle East war dampens mood. (2025). Marketscreener. Retrieved from https://www.marketscreener.com/quote/index/DAX-7395/news/Frankfurt-stock-market-opening-Further-losses-Middle-East-war-dampens-mood-50283079/
[2] G7 leaders to begin two days of talks amid trade, Middle East tensions. (2025). Kyodo News. Retrieved from https://english.kyodonews.net/news/2025/06/3a7256f044b9-g7-leaders-to-begin-2-days-of-talks-amid-trade-middle-east-tensions.html?phrase=sushi&words=