The German DAX index opened under pressure on Tuesday, trading below the psychologically significant 25,000-point mark as investors digested a sharp rebound in oil prices.
The benchmark index, which had closed above the threshold for the first time since early June on Monday, is now facing a fresh test of its support levels amid shifting market sentiment.
The repricing in energy markets is directly linked to escalating geopolitical friction between the United States and Iran.
Despite a reported framework agreement aimed at de-escalating the conflict, the market's initial relief has faded, replaced by caution over the durability of the diplomatic breakthrough.
This renewed risk premium is weighing heavily on European equities, which had rallied on the back of the earlier news.
The DAX's struggle to hold the 25,000 level highlights the fragility of the current market rally.