German Blue Chips Surrender 25,000 as Chip Rout and Strait of Hormuz Jolt Sentiment

Germany's DAX slid 1.29% to 24,671, dragged by tech and auto stocks as fading AI optimism and a cargo vessel attack in the Strait of Hormuz sparked risk-off trading.

The DAX’s brief flirtation with the 25,000-point threshold ended abruptly on Friday, as the index slumped 1.29% to close at 24,671 — undermined by a double dose of selling pressure from the semiconductor space and a fresh geopolitical flashpoint in the Strait of Hormuz. Opening in the red at 24,848, the benchmark briefly touched a session high of 24,870 before a wave of risk-off trading sent it sliding to an intraday low of 24,548.

The technology-heavy selloff was fuelled by fading AI euphoria and growing unease about potential “AI inflation” that could push up prices for end-user devices, quickly overshadowing overnight optimism from Micron Technology’s outlook. Adding to the anxiety, news of an attack on a cargo vessel in the Strait of Hormuz reignited supply-chain fears, driving the VDAX-NEW volatility index up 3.1% to 17.35% — a clear signal of rising institutional nervousness.

Only a handful of defensive names managed to eke out gains. SAP advanced 2.16%, while Beiersdorf and Adidas both added roughly 2.1%. Elsewhere, the picture turned grim. Zalando nosedived 6.32% to €24.92, making it the session’s biggest loser. Siemens Energy tumbled 5.84% to €153.92, plagued by renewed questions over long?term margins in its wind?power business, and Infineon shed 4.52% to €78.30. Auto stocks also took a beating: Volkswagen fell 3.91% and Mercedes-Benz dropped 2.91%. Rheinmetall, meanwhile, suffered a brutal week, losing nearly 20% over the past five sessions as investors cashed in after the defence group’s record-breaking rally.

Technically, the DAX is hovering just 0.27% above its 50?day moving average of 24,604, leaving the index in a precarious spot. The relative strength index stands at 48.3, neutral but tilted to the downside. A clean break below that moving?average line would open the door toward 24,480 and, if that fails, the 24,300 zone — where the 100? and 200?day averages converge. Year?to?date, the blue?chip gauge is clinging to a meagre 0.5% gain, and at 3.3% below its January peak of 25,508, any further weakness would erase that advance entirely.

Wall Street offered no respite. The S&P 500 ended almost flat, while the Nasdaq slipped 0.24% as US tech shares mirrored the European weakness in chips and AI?related names. Commodity markets sent mixed signals: Brent crude fell to $72.95 a barrel, a modestly disinflationary cue, while gold climbed to around $4,084 an ounce, pointing to a more cautious risk posture among investors.

Looking ahead, next week’s calendar is dense with potential catalysts. The European Central Bank’s Sintra forum kicks off on Monday evening, with Christine Lagarde’s remarks on inflation likely to influence the euro and, by extension, German exporters. Tuesday brings the preliminary German CPI reading for June, expected to show a slight stabilisation that could limit further ECB easing. On Wednesday, the Caixin manufacturing PMI from China and the euro?zone estimate for HICP are due. The highlight, however, arrives on Thursday — one day earlier than usual because of the US Independence Day holiday — with the US labour market report. That print will be pivotal in shaping expectations for the Federal Reserve’s rate path and, ultimately, the DAX’s direction into the weekend. Failure to hold the 24,548 floor could see the index test the 24,300?point support, dangerously close to its longer?term trendlines.