Markets are showing hesitation in advance of the upcoming Trump-Putin meeting
Stock Market Wrap-up: Mixed Results Amid Geopolitical Tensions
In a day marked by geopolitical tensions and economic data, the stock market saw a mixed performance on Friday. The German benchmark index, S-Dax, closed virtually unchanged at 24,359 points, while the dollar index fell 0.3% to 97,905 points.
Defense stocks were under pressure, with Rheinmetall falling by over 1%. Despite strong financial growth in the first half of 2025, with group sales rising by 24% to €4.7 billion and an operating result increasing 18% to €475 million, the defense segment especially grew by 36% in sales and showed an operating result margin of 12.4%. Rheinmetall maintains a robust order backlog of €63 billion but has faced some short-term challenges due to political delays, impacting Q2 results somewhat.
Meanwhile, Thyssenkrupp shares continued to fall after losing 9% the previous day, with J.P. Morgan cutting its price target for the stock and seeing further downside risks in the medium term. No recent financial information was found for Thyssenkrupp, Verve Group, or Pandora, making it difficult to summarize their current financial situations based on the available data.
Verve Group, a newcomer to the SDAX, experienced a significant drop in its stock price, falling over 22%. The price of a barrel of North Sea Brent crude fell by 0.6% to $66.45, while a barrel of US WTI fell by around 0.7% to $63.54.
In the commodities market, producer prices rose sharply in July due to a sharp increase in the cost of goods and services, the most in three years. This rise, coupled with weak economic data from China, the world's second-largest oil consumer, dampened sentiment. Industrial production growth in China fell to an eight-month low.
In the political arena, optimism and hope for a first step towards peace is allowing investors to dream of new Dax records again, according to capital market strategist Jürgen Molnar from broker RoboMarkets. However, he also sees great potential for disappointment if the positions of the two powerful men harden or offend the Ukraine and Europeans.
Investors are hoping for a swift resolution to the Russian invasion of Ukraine, with a ceasefire potentially leading to a relaxation of sanctions against Russian oil, increasing supply on the world market. A 25 basis point rate cut is still expected by market participants in September, but US inflation data tempered expectations of a 50 basis point rate cut by the US Federal Reserve next month.
As the market looks towards Monday, there could therefore be significant disillusionment if geopolitical tensions persist and economic data continues to disappoint. The historic high of 24,639 points reached around a month ago remains some way off.
- The stock market's mixed performance on Friday was influenced by both geopolitical tensions and economic data, as seen in the performance of the S-Dax and the dollar index.
- Defence giant Rheinmetall showed strong financial growth in the first half of 2025, but the political delays faced by the company affected its Q2 results, causing a decrease in its stock price.
- Meanwhile, the stock prices of Thyssenkrupp and newcomer Verve Group saw significant drops, with J.P. Morgan lowering its price target for Thyssenkrupp due to perceived medium-term downside risks.
- The rise in producer prices in July, amidst weak economic data from China, and the ongoing geopolitical tensions in Ukraine and Russia, have created uncertainty in the general news and personal-finance sectors, potentially hindering business and investing decisions in technology and finance industries.
