The DAX 40 edged lower toward the 25,000 mark on Monday, as geopolitical tensions returned to the forefront after the latest US-Iran escalation over the weekend.
Fresh hostilities have disrupted traffic through the Strait of Hormuz, pushing oil prices higher and raising concerns over renewed inflationary pressures and the prospect of further monetary tightening.
Investors also remained cautious ahead of the upcoming earnings reports from major US banks.
At the same time, the tech sector faced renewed pressure.
Infineon Technologies led losses among stocks, down over 2%.
Shares of construction company Hochtief and energy technology group Siemens Energy, both beneficiaries of the artificial intelligence (AI) boom, also fell 1.8% and 0.3%, respectively.