DAX40 – The Downturn Returns to Europe

European stock indices are falling on Friday – the Stoxx 600 is down by around 0.65%, the DAX is down 0.89%, and the CAC 40 is down 0.88%. The main factor putting pressure on the markets is the escalation of trade rhetoric by President Donald Trump, who in a post on Truth Social on Thursday threatened “significantly higher” tariffs on EU goods if the EU fails to meet the terms of last year’s trade agreement – namely, reducing its own tariffs on US goods to zero. At the same time, the markets are monitoring the exchange of fire between the US and Iran in the Strait of Hormuz, which, although officially having no impact on the ceasefire, is heightening geopolitical uncertainty. The dollar is slightly weaker – the USDIDX index is down 0.36%, and the EUR/USD pair is holding steady around 1.1771. Among sectors, energy is performing best – supported by rising oil prices, led by Eni with a 2.28% gain; finance and industry are faring worst, with both sectors losing a combined 1% or so, dragged down by Allianz (-4.96%) and Rheinmetall (-4.77%).

A table showing the best and worst performers during today’s trading session in Europe. Source: XTB HQ Research Department

Sector performance Source: XTB HQ Research Department Companies

• Commerzbank has published its results for the first quarter of 2026 – net profit rose by 9.4% to €913 million, beating the consensus forecast of €868 million. The bank has raised its full-year net profit forecast to at least €3.4 billion and announced new strategic targets aiming to double profits by 2030 and achieve a return on equity of 21%. At the same time, the bank announced a third wave of redundancies – 3,000 jobs are to be cut as part of a defensive strategy against a hostile takeover by UniCredit, which already holds a stake of nearly 30%. UniCredit has made a formal takeover bid valued at €37 billion, but it is facing resistance from both Commerzbank’s board and the German government – Chancellor Friedrich Merz has outright rejected the “hostile and aggressive” takeover attempts.
• IAG (owner of British Airways and Iberia) has published its Q1 2026 results – revenue stood at €7.18 billion (+1.9% y/y), whilst operating profit jumped by 77% to €351 million, beating expectations. However, the company warned that full-year profit would be lower than originally forecast due to rising fuel costs – the total fuel bill is expected to reach around €9bn, 70% of which is hedged. IAG shares are down by around 1.5%, and the travel sector is one of the worst performers on Friday.
• Rheinmetall is down nearly 5% on Friday and is the biggest loser on the Euro Stoxx 50 index. The company published its Q1 2026 results – revenue rose by 7.7% y/y to EUR 1.94 billion, but clearly disappointed the market, which had expected over EUR 2.1–2.2 billion. Operating profit stood at EUR 224 million (+17% y/y), but also fell short of the consensus estimate of EUR 262 million, whilst EPS of EUR 2.42 was below the expected EUR 2.70. However, the management maintained its forecast of 40–45% sales growth for the full year, pointing to a record order book of EUR 73 billion (+30% y/y) as confirmation of solid structural demand. It is worth noting that the weaker results did not deter insiders – two key members of the management board, including the CEO, purchased shares totalling nearly EUR 1 million, which historically may signal confidence in the company’s long-term value.

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