The CAC 40 declined by 0.8% to 8,295 on Tuesday, reversing the gains observed in the prior session as investors continued to assess the implications of persistent tensions in the Middle East. President Trump reinstated a US blockade on Iranian vessels navigating the Strait of Hormuz and proposed a 20% fee on all other cargo traversing the waterway.

US forces are anticipated to reinstate maritime patrols and impose restrictions around Iranian ports and coastal regions, an action that Iran perceives as a breach of the interim peace agreement and one that may incite additional assaults on commercial shipping. The developments propelled oil prices significantly upward, intensifying worries regarding inflation and the potential for more stringent monetary policy.

Meanwhile, focus has shifted to the commencement of the earnings season. Among the decliners, luxury stocks experienced the most significant losses, with LVMH declining by 2.1%, Hermès by 1.8%, and Kering by 2.4%, all facing considerable pressure. Other notable laggards included Safran with a decline of 1.2%, EssilorLuxottica experiencing a drop of 2.5%, and Société Générale falling by 1.4%.