FRANKFURT (dpa-AFX) - A complex mix of market drivers continued to deter investors from taking on new equity risk on Thursday. Renewed tensions in the Middle East, ongoing scrutiny of AI valuations, and the prospect of rising interest rates are weighing on sentiment. Two hours ahead of the opening bell, broker IG signaled a 0.1 percent decline for the Dax, pegging it at 24,167 points.

The projected loss is slightly narrower than previously anticipated. New York futures showed signs of recovery following yesterday's losses, while some Asian markets managed modest gains, even as the Middle East conflict escalates dangerously despite a two-month-old ceasefire.

The U.S. and Iran engaged in heavy reciprocal fire for the second consecutive night. However, according to market observer Thomas Altmann of QC Partners, few believe a long-term re-escalation is imminent. 'The prevailing assumption is that Donald Trump will want to position himself as a peace president during the FIFA World Cup, which kicks off today,' the expert commented this morning.

On Thursday, the ECB is widely expected to raise its key interest rate by 0.25 percentage points in response to the fallout from the conflict with Iran. Consequently, Arnaud Mares of Citigroup expects investor focus to shift toward any signaling regarding future monetary policy steps. The U.S. bank currently maintains its forecast for a second consecutive rate hike in July./tih/stk