The fear of sharp interest rate hikes in the USA caused the Dax to slide at the beginning of the week.
The leading German index lost 1.4 percent to 13,562 points in the first few minutes, marking its lowest level in four and a half weeks.
In view of the ever-increasing interest rate expectations, the stock market is currently being re-evaluated, says Thomas Altmann from QC Partners.
“For one thing, rising interest rates are having a direct impact on profits.
On the other hand, bonds are becoming increasingly competitive for stocks.
And both are depressing share prices.”
Share prices had already fallen noticeably on Friday after even higher inflation rates were announced in the United States.
The inflation rate in the world's largest economy was 8.6 percent in May, the highest in 40 years.
The increase exceeded expectations.
On average, economists had expected an increase to 8.3 percent.
Housing, food and energy prices were the main contributors to price increases.
The so-called core inflation rate, which excludes the volatile components of food and energy, rose to 6 percent year-on-year and was thus also above forecasts.
The next interest rate decision by the Federal Reserve is due on Wednesday.
The new inflation data increases the pressure on monetary authorities in Washington.
At the beginning of May, they took the largest interest rate step in 22 years and raised the key interest rate by half a percentage point to the new range of 0.75 to 1 percent.
Fed Chairman Jerome Powell signaled similarly large hikes for the Wednesday and July meetings.
Among the individual values, only a few stocks were able to work their way into the plus.
This included Rheinmetall in the MDax, which was almost four percent higher after a buy recommendation from Goldman Sachs.
The armaments company also expects business to pick up.
"We are expecting a significant increase in sales of up to 20 percent per year and are now in the process of increasing our capacities," said Armin Pappberger, CEO of Rheinmetall, to "Bild am Sonntag".