FRANKFURT (dpa-AFX) - After a strong start to the year on the German stock market, the DAX held steady on Monday. Escalating tensions in Iran and the intensifying dispute between US President Donald Trump and US Federal Reserve Chairman Jerome Powell are dampening the upbeat mood somewhat.

Germany's leading index, which on Friday briefly reached a new record high of 25,281 points and has already gained three percent since the start of the year, slipped by 0.04 percent to 25,253 points.

The MDAX, the index for mid-cap stocks, rose by 0.16 percent to 32,218 points. Meanwhile, the Eurozone's leading index, the EuroStoxx 50, fell by 0.22 percent to 5,985 points.

"German stocks have had a spectacular start to the new year, and from a technical perspective, the DAX is now massively overbought," commented portfolio manager Thomas Altmann of QC Partners on recent trading days. "Now, the markets are facing what could be called a 'week of truth'," he expects, as the earnings season for the fourth quarter of 2025 is about to begin. It will have to be seen whether rising stock prices are also being supported by rising corporate profits.

Despite immense geopolitical risks, the DAX has so far maintained its positive track record in the first month of the year. The main driver for prices is the hope for a revival of the German economy in 2026, thanks to a massive infrastructure package. Developments in the United States are also boosting the German stock barometer, most recently on Friday after the US jobs report, which experts say has given the Federal Reserve "more room for further interest rate cuts than current projections suggest."

Meanwhile, the dispute between Trump and Powell has escalated: The Fed chairman rejected criminal investigations against him and a looming indictment as an attempt to influence the Fed's work. According to Powell, the US Department of Justice served subpoenas to the Fed on Friday and threatened with an indictment.

In addition, mass protests in Iran against the regime continue despite rising death tolls, excessive threats from the security apparatus, and an almost complete internet blackout. EU foreign policy chief Kaja Kallas has now said she is prepared to propose new sanctions against Iran. Trump has also increased pressure on the Islamic Republic./ck/mis