Frankfurt's DAX attempted a recovery, rising 0.2% before paring gains to trade just above the flatline, as traders assessed a batch of corporate earnings and economic data, with trade negotiations also in focus. Regarding domestic data, Germany’s economy contracted by 0.1% in Q2, matching forecasts and reversing the 0.4% growth seen in Q1. Meanwhile, the German cabinet has approved the 2026 draft budget, which includes a record investment of €126.7 billion and planned borrowing of €174 billion, aimed at reinforcing infrastructure and defence. On the corporate front, Porsche AG led the gains, rising over 3%, as traders welcomed its commitment to a broad strategic overhaul, despite the company cutting its full-year outlook due to a €400 million tariff-related loss and increased trade uncertainty. Siemens Healthineers added more than 2% on strong Q3 earnings beat and after the firm raised its guidance.