German equities retreated on Thursday after the Dax initially reached a record high of close to 26,693 points, as growing market turbulence in the United States prompted investors in Frankfurt to adopt a defensive posture following the Democrats' electoral success.
Weighed down by declining artificial intelligence equities and a sharp drop in Rheinmetall shares following corporate figures, the Dax closed 0.43 percent lower at 26,325.01 points. The MDax index dropped 0.92 percent to finish at 30,891,56 points. In New York, following midterm election results that dealt a setback to President Donald Trump, the selloff in artificial intelligence shares accelerated significantly, spreading from the Nasdaq to encompass the broader Dow Jones Industrial Average.
Salah-Eddine Bouhmidi of broker IG noted that euphoria over the election had given way to disillusionment, with market participants focusing on anxieties surrounding the future of the artificial intelligence boom amid fears that Democratic victories could lead to stricter regulations that delay data center expansion and projects. Analysts at Index-Radar observed that while the Dax had previously built up relative strength compared to US indices, the market situation in New York increasingly resembled an oversold condition requiring strict risk management. Capital shifted toward more defensive segments, driving Infineon shares down by an 8.5 percent margin, while semiconductor suppliers across the MDax and SDax, alongside Siemens Energy and Hochtief, also suffered under pressure.
Rheinmetall exerted the heaviest weight on the Dax. Following a downward revision to its forecast after the previous session's close, the defense contractor's share price plummeted 16 percent to reach its lowest level since February 2025. JPMorgan analyst David Perry stated that while the company's strategy was not flawed, its prior targets appeared unrealistic. Within the defense sector, Renk shares also registered losses following quarterly reports.
Several other Dax-listed corporations released quarterly performances. Commerzbank equities dropped 2.8 percent; DZ Bank analyst Philipp Hässler pointed to strong third-quarter figures but noted negative surprises regarding net interest income guidance, prompting a downgrade to hold due to a lack of near-term catalysts. Deutsche Telekom shares declined 2.1 percent despite solid figures, driven by concerns over a complete merger with T-Mobile US as the proposed dividend increase of ten percent fell short of stronger market expectations.
In the MDax, Lanxess shares initially surged as much as 20 percent before trimming their gain to six percent at the closing bell, driven by short covering among bearish investors despite routine quarterly results and a refined outlook. Bechtle advanced after raising its annual targets, while HelloFresh shares jumped 11.5 percent despite weak third-quarter operations, as lower marketing expenditures drove operating profit above expectations.
Across the broader region, the EuroStoxx 50 closed 0.55 percent lower at 6,231.54 points, while the Swiss SMI and London's FTSE 100 also slipped into negative territory. In New York trade, the Dow Jones Industrial Average declined 2.4 percent and the Nasdaq 100 dropped 4.5 percent.
