DAX Jumps Sharply Over 1% to a Three-Week High as US-Iran Pause Lifts Markets, SAP Leads Gains Monday

FRANKFURT — Germany's benchmark DAX index climbed sharply Monday, touching a three-week high as a weekend pause in fighting between the United States and Iran sent oil prices tumbling and lifted risk appetite across European markets heading into a busy week of corporate earnings.

A strong session in Frankfurt

The DAX rose 1.08%, or 271.20 points, to 25,370.20 as of mid-morning trading Monday, with the index extending gains further as the session progressed to reach 25,408.81, up 1.23%, according to market data. The advance pushed the DAX to its highest level in roughly three weeks, marking a notable rebound after a choppier stretch of trading earlier in the month that had seen the index pull back more than 4% from its record intraday high of 25,900.10, reached in early July. Over the trailing five trading days, the index has gained roughly 2.10%, and it now sits up about 3.59% since the start of the year.

Iran pause drives the rally

Monday's gains were driven primarily by developments in the Middle East, where the United States and Iran refrained from launching further attacks against each other over the weekend, following nearly two weeks of escalating strikes. That pause fueled hopes for a potential resumption of talks on an interim ceasefire arrangement, sending oil prices sharply lower and boosting broader risk sentiment across European trading floors. Brent crude futures fell roughly 6% to trade around $90 a barrel Monday, with steeper intraday declines of as much as 7.4% before prices pared back some of the losses. The retreat in energy prices offered relief to markets that had spent much of the year contending with elevated crude prices tied to repeated flare-ups in the conflict.

SAP leads a broad advance

Software giant SAP was the DAX's top performer Monday, with shares rising 5.29%. The gain builds on a strong recent run for the company, which surged 10% the previous Friday after reporting stronger-than-expected quarterly revenue, driven by robust cloud backlog growth and strong demand for its artificial intelligence platform. Other notable gainers Monday included online retailer Zalando, up 3.99%; automotive supplier Continental, up 2.14%; digital marketplace operator Scout24, up 1.97%; and Commerzbank, up 1.88%.

Not every DAX constituent participated in the rally. Engineering group GEA Group slipped 0.31%, chemical giant BASF fell 0.42%, and utility companies Eon and RWE dropped 1.13% and 1.96%, respectively, as the broader pullback in oil and energy prices weighed on utility and energy-linked names. Construction group Hochtief was the session's biggest decliner, falling 3.67%.

Germany's business climate survey also in focus

Beyond the geopolitical backdrop, investors were also watching Monday's release of Germany's closely followed Ifo business climate survey, a widely tracked gauge of sentiment among German companies. The Ifo data arrived alongside broader business survey and consumer sentiment figures that have provided mixed signals about the health of Europe's largest economy in recent weeks, even as corporate earnings reports have generally outperformed more cautious expectations heading into the reporting season.

A recovery from recent volatility

Monday's advance extends a recovery that began taking shape the previous Friday, when the DAX rose 1.36% to close at 25,099 points, rebounding from a near one-month low touched earlier in the week. That Friday rally was driven by a combination of strong corporate earnings, including SAP's results, along with unexpectedly upbeat eurozone business activity data. A survey from S&P Global showed eurozone business activity returned to growth in July, exceeding expectations, with Germany leading that recovery among the region's major economies.

The German market's rebound has unfolded against a backdrop of persistent headwinds throughout the summer, including new U.S. tariffs affecting imports from more than 60 trading partners, among them the European Union, at rates ranging roughly from 10% to 12.5%. Those tariffs have weighed particularly heavily on Germany's export-dependent automotive sector, with Volkswagen shares falling 2.4% the previous Friday after the company reported weaker earnings and issued a lower revenue outlook. Adidas also declined 1.5% that same session, underscoring how uneven the current earnings season has been across different corners of the German market even as the headline index posts solid gains.

A busy week of earnings ahead

With the DAX rally taking hold early in the week, investors are also bracing for what analysts have described as a demanding stretch of corporate earnings reports across Europe and the United States. Beyond Germany's own reporting calendar, global markets are watching for results from major U.S. technology companies expected later this week, given how closely European sentiment has tracked developments in the broader AI-driven rally that has powered much of this year's gains across global equity markets.

A market still shaped by geopolitical swings

The DAX's performance in 2026 has been closely tied to the shifting fortunes of the Iran conflict, with the index experiencing sharp declines during periods of escalation and equally sharp rebounds whenever diplomatic progress or a pause in hostilities has emerged. That pattern was on full display again Monday, as a single weekend development in the conflict was enough to drive the index to its best level in three weeks, illustrating just how sensitive European equity markets remain to developments thousands of miles away in the Middle East.

With markets now watching closely for confirmation that the pause in U.S.-Iran hostilities holds, and with a heavy slate of corporate earnings reports still to come this week, investors in Frankfurt and across Europe are likely to remain focused on two parallel storylines in the days ahead: whether the fragile calm in the Middle East can be sustained, and whether this week's earnings reports from major technology and industrial companies can support the kind of sustained rally that has periodically lifted the DAX toward record territory throughout 2026.