The Dax fell 0.8% to 24,965 points on Thursday afternoon, extending a period of volatility for the German benchmark index.
The decline comes as oil prices climbed to their highest level since early June, injecting fresh uncertainty into equity valuations.
The recent rally, which had pushed the Dax near 25,500 points, is showing clear signs of exhaustion.
The German index has struggled to maintain a sustained upward trajectory this week, retreating from its recent record high of 25,900 points.
The pullback reflects broader caution among investors as global equity markets confront a critical juncture at the start of the summer trading season.
The recent rally, which had pushed the Dax near 25,500 points, is showing clear signs of exhaustion.
Rising energy costs are weighing on market sentiment, with crude oil benchmarks surging amid geopolitical tensions.