FRANKFURT (dpa-AFX) - Economic and inflation concerns fueled by the war with Iran have handed the Dax its weakest week since the US tariff storm in April 2025. Adding to the pressure, dismal US labor market data further stoked economic uncertainty. The German benchmark index fell nearly one percent on Friday to 23,591.03 points, resulting in a weekly loss of 6.70 percent.

The MDax, which tracks mid-cap stocks, closed with a daily loss of 0.7 percent at 29,482.78 points. The Eurozone's leading index, the EuroStoxx 50, fell by just over one percent.

"Investors got cold feet following disappointing labor market data from the US and ahead of a potentially eventful weekend, continuing their retreat from equities," said Andreas Lipkow of broker CMC Markets. The situation in the Middle East is not improving, and there is currently no sign of a swift end to the war waged by the US and Israel against Iran.

Meanwhile, US President Donald Trump has demanded an "unconditional surrender" from Iran. While the US assesses that the country's combat effectiveness has been significantly weakened by the attacks, the Iranian leadership is nevertheless attempting to expand the war across the entire Middle East, targeting oil and gas infrastructure in the Gulf States. Furthermore, maritime traffic in the Strait of Hormuz – a critical bottleneck for global oil and gas trade – has now come to a near-complete standstill, according to the maritime consultancy Joint Maritime Information Center (JMIC).

The resulting surge in oil and gas prices carries significant inflationary risks. The longer the war lasts, the greater these risks become. However, experts remain confident for now that the situation will remain manageable. Robert Greil, chief strategist at private bank Merck Finck, assumes a relatively short war of no more than three months in his base-case scenario. "A much faster end to the war seems less realistic to us, as does a much longer duration involving, for example, a months-long closure of the Strait of Hormuz based on what we know today," Greil explained.

In light of geopolitical uncertainties, defense stocks were once again in high demand. At the top of the Dax, Rheinmetall gained nearly 3 percent. In the MDax, shares of tank transmission manufacturer Renk led the pack with a gain of over 7 percent. Shares of submarine builder TKMS and defense electronics specialist Hensoldt were also among the top performers./mis/jha/