The DAX 40 extended losses to over 2% on Wednesday, trading at more than one-week lows, following President Trump's harsh remarks on Iran.
US President Trump said at the NATO summit that he believes the US-Iran memorandum of understanding is "over", adding that negotiations with Tehran are a waste of time.
Market sentiment was already fragile after the US and Iran exchanged attacks and Washington reinstated sanctions on Iran's oil sector following alleged attacks on three ships in the Strait of Hormuz.
At the same time, investors continued reducing exposure to semiconductor and AI-related stocks amid increasing unease over elevated valuations.
Losses were widespread, with banks, autos, software, technology, industrials, and consumer discretionary stocks leading the downturn, while utilities remained the lone bright spot.