Market Wrap: Geopolitical Rebalancing; Markets Wary of the Outcome of the 5-Day “Standoff” 🚨

Volatility currently observed in major financial instruments. Source: xStation

The volatility currently seen in the currency market. Source: xStation

The volatility currently seen in the European stock market. Source: xStation

• Tuesday’s trading session on European markets is proceeding in a volatile atmosphere, though one dominated by uncertainty surrounding the five-day ceasefire agreed upon between the U.S. and Iran regarding attacks on energy targets, even though Iran denies that any talks took place and Israel itself continues its attacks.
• The dollar, oil, and gold remain the key indicators of market volatility amid geopolitical turmoil.
• Looking at them now, we can see that today’s session is taking place amid a climate of market skepticism. Oil and the USD are outperforming gold, which may indicate that the market still sees many risks in the coming days.
• OIL and OIL.WTI are up more than 1%, although prices remain below $98 per barrel. 
  • The USDIDX dollar index is up 0.23%, with currencies from the Southern Hemisphere once again performing the worst, losing 0.67% (AUDUSD) and 0.55% (NZDUSD) against the USD, respectively.
  • On the stock exchanges themselves, we don’t see a clear trend, although momentum has turned more bearish in recent minutes. The German DAX 40 is currently down 0.8%, while the French CAC 40 is down 0.7% at the end of the first trading session on Tuesday. The Polish W20 is performing very poorly, with declines of around 1.1% (the biggest loser on the continent).
  • When it comes to individual companies, SAP is drawing the most attention from investors. Its shares fell 4% to €147.66, their lowest level in 26 months, making it the worst-performing stock on the DAX index, with a total decline of 29% since the start of the year. JPMorgan analyst Toby Ogg downgraded the stock from “Overweight” to “Neutral” and drastically reduced the price target from €260 to €175, while also removing the stock from the “Analyst Focus List.” He cited the expected slowdown in the growth of the Current Cloud Backlog (CCB) metric, increasing earnings volatility resulting from the business model transformation, and the need for increased investment in the face of intensifying competition, which led him to lower his earnings forecasts for 2026–2028.
  • Kepler Cheuvreux and Jefferies also lowered their price targets to €190 and €230, respectively, but both firms maintained their "Buy" ratings, signaling confidence in the company's long-term potential despite short-term challenges.
  • Bayer AG shares fell nearly 3% following reports that the investment fund Inclusive Capital Partners is considering selling a block of 8.5 million shares (0.9% of the share capital) worth approximately €327 million, which the market interprets as a signal that Ubben believes the company’s growth potential has been exhausted. As a result, Bayer ranked as the second-worst performer in the main German index.
  • Shares of Spain's Puig surged 16% after Estée Lauder and the Spanish beauty group announced they were in talks regarding a potential acquisition.image.jpg