DAX Whipsaws Through 25,000 as Options Expiry Collides with Geopolitical and Fed Crosscurrents

German benchmark recovers after dipping below 25,000 on options expiry, with defensive stocks gaining while inflation data and Fed rate hike signals weigh on sentiment.

The German benchmark flirted with the 25,000 threshold on Friday as the monthly expiration of options and futures rattled trading desks, while competing narratives around the Iran deal and the Federal Reserve’s hawkish tilt kept investors guessing. The so-called Hexensabbat — or triple witching — normally amplifies volatility, and this session was no exception.

At around 14:39 Frankfurt time, the DAX briefly dipped under the round-number mark to a session low of 24,956 points, as institutional players squared positions or rolled them into new contracts. The index quickly recovered, last trading at 25,068 points, up 0.17% on the day. Trading volume ran roughly 12% above the daily average, though the absence of Wall Street due to the Juneteenth holiday tempered afternoon impulses — and also reduced selling pressure.

The conflicting forces were clear. Thursday’s session had been powered by relief over the surprise US-Iran framework agreement, which pushed oil prices lower and eased inflation fears. Yet that optimism was tempered when the Federal Reserve, now under Kevin Warsh, left rates unchanged and, more importantly, signaled that half of its policymakers see at least one more rate hike in 2026, pushing the prospect of cuts far into the future. The DAX had closed Thursday at 25,027 points, less than 2% away from its January record of 25,507 points.

Friday’s sector leadership looked markedly different from the day before. While Infineon had soared 6.4% on Thursday and Siemens Energy jumped 4.5% on talk of a possible sale of its compressor unit, the expiry session was dominated by defensive strength. Rheinmetall topped the DAX with a 2.6% gain, buoyed by lingering geopolitical tension despite the US-Iran pact. Mercedes-Benz, Infineon, and BMW added between 1% and 1.4%. On the flip side, Volkswagen’s preferred shares tumbled 4.33%, hit by a dividend adjustment and ongoing structural concerns. Fresenius Medical Care and RWE also fell as rising bond yields punished defensive names.

The earlier session had been far more brutal for industrial and software heavyweights. SAP lost nearly 5% on Thursday, while both Mercedes-Benz and BMW gave up more than 4% — a pronounced sector rotation that had energy and tech leading the charge. Friday’s expiry saw a rebalancing, with short-covering and position-rolling creating pockets of strength in previously battered names.

Chart technicians see the uptrend holding, with the DAX still above its 50-, 100-, and 200-day moving averages. The distance to the 200-day line is roughly 3.4%, and the relative strength index at 58 signals no overheating. The support zone between 24,950 and 24,764 points proved its worth on Friday. On the upside, the first test sits at the June 16 high of 25,114 points, followed by the 52-week peak at 25,508 points — about 1.7% away.

German producer prices for May came in at 2.2% year-on-year, below the 2.5% consensus, providing some relief on the inflation front. The Iran deal, though still fragile after US Vice President JD Vance called off the formal signing ceremony, has calmed energy markets — oil prices barely moved and energy stocks traded sideways on Friday. Investors will watch whether the DAX can close the week above 25,000 points at the 17:30 settlement, which would send a confident signal heading into next week’s trading.