FINWIRES · TerminalLIVE
FINWIRES

German Stocks Extend Gains as US-Iran Sign Interim Peace Deal

By

German shares extended their gains on Thursday, with the blue-chip DAX index climbing 0.37%, as the US and Iran signed a tentative peace agreement earlier than anticipated.

Ahead of an initially expected Friday timeline, US President Donald Trump and his Iranian counterpart, Masoud Pezeshkian, digitally signed a memorandum of understanding aiming to permanently end their conflict and reopen the Strait of Hormuz. The news boosted market sentiment and helped drive oil prices lower.

On the economic side, the ifo Institute reduced its 2027 price-adjusted gross domestic product growth projection for Germany to 0.8% in its summer economic forecast, from 1.2% previously, while maintaining its 2026 assumption at 0.8%. Even as estimates are based on a gradual decline in energy prices following the US-Iran peace agreement, the research institute warned that prices could remain above pre-war levels, potentially shaving 0.4 percentage points off growth in both 2026 and 2027.

"While a massive energy price shock caused by the Middle East conflict is slowing down the economy, a highly expansionary fiscal policy is supporting growth. The economy is currently being shaped by conflicting forces," the ifo wrote.

On the corporate front, Siemens Energy (ENR.F) was DAX's top stock, closing 4.70% higher, as the German energy technology company confirmed withthat it is evaluating the long-term setup of its Transformation of Industry unit in an effort to accelerate its growth. Siemens Energy said that no final decisions have been made, clarifying an earlier report by Manager Magazin, citing confidential internal documents. The report stated that the company is weighing a potential spinoff of its compressors and steam turbines division.

Meanwhile, Deutsche Bank Research forecasts BASF's (BAS.F) second-quarter EBITDA will beat market expectations, while anticipating that the German chemicals company will affirm its full-year 2026 outlook during its earnings report on July 29.

"We forecast Q2 EBITDA to be up 31% YoY to EUR2.088bn (2% above consensus), driven by strong growth in the upstream businesses on improved pricing/margins alongside higher volumes. We expect mgmt to reiterate the FY 26 EBITDA guidance of EUR6.2-7.0bn. Yet we remain slightly above despite modest EPS cuts (1-4%) to reflect the [faster-than-expected normalization] of margins as supply disruptions ease. We are 8% above the mid-point and 2% above the high end of the range, but 2% below consensus," Deutsche Bank Research wrote. BASF was down 2.71% at closing.

Related Articles

Asia Markets

Update: US Equity Indexes Drop as Bets for Higher Interest Rates Jump After Fed Eliminates Easing Bias

(Updates with index/price moves, FedWatch outlook, macro data, and political/company news from the first paragraph.)US equity indexes fell while government bond yields jumped as odds favoring higher interest rates this year surged after the Federal Reserve removed the so-called easing bias from its policy statement.The Nasdaq Composite fell 1.4% to 26,021.66, with the S&P 500 down 1.2% to 7,420.10 and the Dow Jones Industrial Average lower by 1% to 51,492.55 on Wednesday. All sectors fell, with communication services, consumer discretionary, and consumer staples leading the decliners at the close.The Fed left its benchmark rate unchanged in the 3.50% to 3.75% range in a unanimous decision announced Wednesday, excluding language that suggested a lingering bias toward cuts."Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East," the Fed statement said. "Job gains have kept pace with the workforce, and the unemployment rate has changed little."The probability of a 25-basis-point increase in rates to a target range of 3.75% to 4% in July soared to 35% from 9% a day ago, according to the CME FedWatch tool. The comparisons for September were 47% versus 27%, and, for October, the data showed an increase to 45% from 33%. Strikingly, there is a 33% likelihood that rates will be 4% to 4.25% in December, implying that the Fed may raise rates by another 25 basis points even after tightening policy once between July and October.In economic news, retail sales climbed 0.9% after a downwardly revised 0.4% gain in April, the Census Bureau reported Wednesday. The consensus was for a 0.6% increase in May, based on a Bloomberg survey.Pending home sales rose by 3.8% in May, above the 0.9% increase expected in a survey compiled by Bloomberg and following a 0.3% increase in April, according to the National Association of Realtors. The monthly sales index was up 4.8% from a year ago.US Treasury yields jumped, with the 10-year surging 6.1 basis points to 4.49% and the two-year soaring 14.8 basis points to 4.2%.In geopolitical news, the US draft of the framework agreement with Iran includes a new 'minimum' standard for diluting Iran's uranium and toll-free passage of the Strait of Hormuz for 60 days, senior US officials told the Associated Press. That shows the US draft does not preclude Iran from imposing fees on maritime traffic after the fixed period.The US draft includes provisions to ensure "territorial integrity" of Lebanon after Israel's latest attacks in the country against the militant outfit Hezbollah, the officials were cited as saying. In return, the US will waive, but not eliminate, some sanctions that were previously imposed on Iran after the deal is signed on Friday, the news report said, adding that Tehran has not released its version of the peace deal.In his closing remarks at the G7 summit in France, French President Emmanuel Macron said that it is vital that Iran, Hezbollah, and Israel do not resume fighting, while noting that Paris supports a preliminary US-Iran deal to end the war, according to CNN.Front-month global benchmark North Sea Brent slipped 0.1% to $78.85 per barrel, and US West Texas Intermediate edged 0.2% lower to $75.92 per barrel.In company news, Moderna (MRNA) plans to invest in production sites in Germany and is interested in the plants that BioNTech (BNTX) has slated for closure, according to a Google translation of a Wednesday report published by German news outlet Handelsblatt. Shares of the COVID vaccine manufacturer soared 12%, the biggest outperformer on the S&P 500.

Dow JonesNasdaq CompositeS&P 500$MRNA
Asia Markets

Update: US Equity Indexes Mixed Ahead of Fed Chair Warsh's Policy Views as Iran Warns Israel Over Lebanon Attacks

(Updates with index/price moves, macroeconomic data, and political/company news from the first paragraph.)US equity indexes traded mixed as investors await Federal Reserve Chair Kevin Warsh's views on monetary policy direction and inflation amid Iran's warning against continued Israeli attacks on Lebanon.The Nasdaq Composite slipped less than 0.1% to 26,379.5, and the S&P 500 edged 0.1% lower to 7,505.8 in Wednesday's midday trading. The Dow Jones Industrial Average advanced 0.2% to 52,110.3. Communication services, consumer staples, and consumer discretionary led the decliners. Industrials and materials were among the top gainers.The Federal Open Market Committee is widely expected to maintain the range for its federal funds rate at 3.50% to 3.75% for the fourth straight meeting, implying the focus will be on the updated Summary of Economic Projections and Kevin Warsh's first press conference as Fed chair on Wednesday afternoon.The rate-setting panel is likely to remove the lingering easing bias from the Fed policy statement, signaling instead an equal probability of the next policy move being a rate cut or an increase, according to a Stifel note. In the Summary of Economic Projections, policymakers will likely raise their inflation expectations amid rising energy prices and growth, with the latter reflecting a pickup in productivity via a rapid adoption of artificial intelligence, the note said.In his closing remarks at the G7 summit in France, French President Emmanuel Macron said that it is vital that Iran, Hezbollah, and Israel do not resume fighting, while noting that Paris supports a preliminary US-Iran deal to end the war, according to CNN.Iran will be able to export oil as soon as its agreement with the US is signed on Friday, CNN reported, while noting it has seen a draft of the memorandum of understanding. The MoU states Iran will "never produce nuclear weapons" while allowing Tehran to potentially tap into a $300 billion development fund if it meets commitments related to its nuclear program in further talks, the news agency reported.Meanwhile, Iran accused Israel of violating the truce in Lebanon 84 times since it reached the interim agreement with the US and warned of a "harsh response" if attacks continue, Al Jazeera reported. Israel carried out a series of strikes in southern Lebanon on Wednesday, CNN reported. The US-Iran framework agreement ends the war on all fronts, including Lebanon, the CNN report added.Front-month global benchmark North Sea Brent rose 0.7% to $79.50 per barrel, and US West Texas Intermediate climbed 0.9% to $76.72 per barrel.In economic news, retail sales climbed 0.9% after a downwardly revised 0.4% gain in April, the Census Bureau reported Wednesday. The consensus was for a 0.6% increase in May, based on a Bloomberg survey.Pending home sales rose by 3.8% in May, above the 0.9% increase expected in a survey compiled by Bloomberg and following a 0.3% increase in April, according to the National Association of Realtors. The monthly sales index was up 4.8% from a year earlier.In company news, US equity markets could see a major shift as the Securities and Exchange Commission considers allowing "tokenized stocks" under a proposed innovation exemption, Reuters reported Wednesday, citing analysts and lawyers. The move, expected under SEC Chair Paul Atkins, aims to give companies regulatory flexibility to experiment with digital asset models, it said. Robinhood (HOOD) shares jumped 12%, the top gainer on the S&P 500.Applied Materials (AMAT) stock advanced 7.5%, among the biggest gainers on the S&P 500 and the Nasdaq, after the company and EssilorLuxottica unveiled a long-term joint development agreement to advance augmented reality optics platforms for smart glasses.

Dow JonesNasdaq CompositeS&P 500$AMAT$HOOD
Asia Markets

Exchange-Traded Funds, US Equities Mixed After Midday

Broad Market IndicatorsBroad-market exchange-traded funds IWM and IVV were mixed after midday Wednesday, with the latter trading lower. Actively traded Invesco QQQ Trust (QQQ) was up 0.3%.US equity indexes were also mixed ahead of the Federal Reserve's monetary policy announcement under newly minted Kevin Warsh, while Iran warned against Israel's continuing attacks on Lebanon.EnergyIShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) each fell 0.5%.TechnologyThe State Street Technology Select Sector SPDR ETF (XLK) gained 1.2% and iShares US Technology ETF (IYW) rose 0.7%, while iShares Expanded Tech Sector ETF (IGM) was up 0.9%.The State Street SPDR S&P Semiconductor (XSD) increased 1.9% and iShares Semiconductor (SOXX) was 3.4% higher.FinancialThe State Street Financial Select Sector SPDR (XLF) added 0.6%. Direxion Daily Financial Bull 3X Shares (FAS) added 1.7%, and its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), lost 1.7%.CommoditiesCrude oil rose 1%, and the United States Oil Fund (USO) fell 0.5%. Natural gas shed 2.8%, and the United States Natural Gas Fund (UNG) was 2.6% lower.Gold on Comex gained 0.7%, and the State Street SPDR Gold Shares (GLD) also rose 0.5%. Silver advanced 1.1%, and iShares Silver Trust (SLV) was up 0.6%.ConsumerThe State Street Consumer Staples Select Sector SPDR (XLP) was down 1.5%. The Vanguard Consumer Staples ETF (VDC) fell 1.4% and iShares Dow Jones US Consumer Goods (IYK) was down 1%.The State Street Consumer Discretionary Select Sector SPDR (XLY) declined 0.9%. VanEck Retail ETF (RTH) was 1.4% lower, and the State Street SPDR S&P Retail (XRT) dropped 0.3%.HealthcareThe State Street Health Care Select Sector SPDR (XLV) shed 0.6%, iShares US Healthcare (IYH) decreased 0.4%, and Vanguard Health Care ETF (VHT) slipped 0.2%. IShares Biotechnology ETF (IBB) gained 2.3%.IndustrialThe State Street Industrial Select Sector SPDR (XLI) added 1.1%. Vanguard Industrials Index Fund (VIS) gained 1.2%, while iShares US Industrials (IYJ) rose 1%.CryptocurrencyIn midday activity, bitcoin (BTC-USD) was up 0.1%. Among cryptocurrency ETFs, ProShares Bitcoin ETF (BITO) rose 0.5%, ProShares Ether ETF (EETH) fell 1.4%, and ProShares Bitcoin & Ether Market Cap Weight ETF (BETH) was 0.2% higher.

Dow Jones^EEM^EXI^FAS^FAZ^GLD^IBB^IGM^IGV^IPK^IVV^IWMNasdaq Composite^IYE^IYH^IYJ^IYK^IYW^PMR^QQQ^RTH^SOXXS&P 500^SPY^UNG^USO^VDC^VHT^VIS^XLE^XLF^XLI^XLK^XLP^XLV^XRT^XSD$BETH$BITO$EETH