The escalating Middle East war is likely to cause further losses for the German stock market on Wednesday.

Risky investments like stocks are therefore in low demand among nervous investors. The flight to safer havens such as government bonds, gold, or currencies is likely to continue. In addition, attention is turning to the upcoming US interest rate decision this evening.

The pre-market indicator X-Dax DE000A0C4CA0DE0008469008DE000A0C4CA0 signaled a loss of 0.2 percent to 23,381 points for the German benchmark index DE0008469008 three-quarters of an hour before the start of trading. The day before, the DAX had already lost just over one percent, and with further losses now, the recently important support level at 23,400 points would be put to the test again.

The Eurozone's leading index, the EuroStoxx 50 EU0009658145, is expected to fall 0.2 percent on Wednesday.

"The world is holding its breath," Stephen Innes of SPI Asset Management summarized the current situation in the Middle East. There are no longer any whispers behind closed doors; rather, the situation has escalated into a showdown, and "the next step belongs to Washington."

Addressing Iran, US President Donald Trump now demanded "unconditional surrender." He also wrote on the Truth Social platform: "We now have complete and total control of the skies over Iran," without explaining who he meant by "we," after Israel had previously spoken of "full air superiority in the skies over Tehran." He also indirectly threatened Iran's Supreme Leader Ayatollah Ali Khamenei, saying they knew where he was hiding but would not kill him for the time being.

Away from the battlefield, the focus this evening after the stock market closes will shift to US monetary policy. The Federal Reserve is expected to leave its key interest rate unchanged at between 4.25 and 4.50 percent, so the economic and monetary policy outlook will likely be the focus of attention.

Chancellor Friedrich Merz also expects a trade deal with the US by July 9th – but not for all sectors. Whether the automotive industry will be included remains unclear. Stocks such as VW DE0007664039, BMW DE0005190003, and Mercedes DE0007100000 fell slightly on Tradegate compared to the previous day's Xetra close.

Meanwhile, Airbus NL0000235190 rose slightly on Tradegate. The aircraft manufacturer is making its dividend policy more attractive and increasing the payout ratio at the upper end from 30 to 40 percent to 30 to 50 percent. The targets for 2025 were also confirmed.

Gerresheimer DE000A0LD6E6 saw a more significant increase, gaining 3.0 percent, although this only implies a partial recovery from the previous day's slide. Financial investors Warburg Pincus and KPS are still discussing a joint takeover of the packaging specialist. However, Gerresheimer stated that it is unclear whether an offer will be made. Previously, the Bloomberg news agency, citing people familiar with the matter, reported that KPS had decided against a bid after discussions with Warburg and a review of its books. This had dragged the share price down on Tuesday.

Shares of Deutsche Pfandbriefbank DE0008019001 fell 4.5 percent on Tradegate. The credit provider plans to withdraw from the US market.