FX.co ★ DAX Ends Sharply Lower

On the first trading day of July, Frankfurt's DAX index dipped approximately 1%, closing at 23,673, trailing behind other indices primarily due to a downturn in defense stocks. This decline came amid reports that the European Union is considering a trade agreement with the United States, proposing a standardized 10% tariff on various exports. Notably, this deal would exclude crucial sectors such as pharmaceuticals, alcohol, semiconductors, and commercial airplanes. Additionally, new statistics revealed a decrease in Eurozone inflation to 2% in June. European Central Bank President Christine Lagarde, speaking at the ECB’s annual forum in Sintra, indicated that the inflation target had been met, tempering expectations for additional rate cuts this year. Concurrently, Federal Reserve Chair Jerome Powell expressed a cautious outlook in response to the uncertainty surrounding tariffs, noting the Fed would "wait and see" regarding the inflation trajectory. In corporate news, Thyssenkrupp's shares plummeted 6% following an announcement from Norway’s sovereign wealth fund that it would exclude the defense firm from its investment portfolio. Similarly, shares in Hensoldt and Renk experienced a 4% decline.