Do you understand me? OR Are you understanding me?

... and the correct question is: "Do you understand me?"

'Understand' is an example of a stative verb. Stative verbs are verbs that do not take the continuous form (-ing). As always in English, some stative verbs are action verbs depending on the contextual meaning of that verb. This guide to stative and action verbs helps explain the differences between these two verb types and provides clues to helping you decide whether a verb is stative or active.