DAX Slips as Iran-U.S. Tensions Flare After Base Attacks

The DAX had been trading near record highs earlier this week, supported by strong corporate earnings and expectations of a European Central Bank rate cut in June. Wednesday's selloff erased those gains, leaving the index flat for the week.

Traders said the market was caught off guard by the timing of the attack, which came just hours after U.S. officials signaled a de-escalation was possible. The sudden shift in tone caught many short-term positions leaning the wrong way, amplifying the move.

A similar pattern played out in Asian markets earlier in the session. South Korea's KOSPI dropped 2.4% on the same news, with the won strengthening against the dollar. That selloff set the tone for European open.

The next concrete marker for the DAX is the U.S. response. If Washington opts for targeted strikes rather than a broader military campaign, the risk premium could fade quickly. A more aggressive response would likely push the index toward the 18,000 support level, a zone that has held since early April.

For now, the market is in wait-and-see mode. The DAX closed near session lows, with volume running about 20% above the 30-day average, suggesting institutional repositioning rather than retail panic.