The CAC 40 declined by 0.3% to 8,340 on Wednesday, reflecting a lacklustre performance in the preceding session, as investors remained focused on evaluating the implications of rising tensions in the Middle East. President Trump’s decision to withdraw a proposed 20% tax on goods transiting the Strait of Hormuz provided minimal relief to the markets, as Tehran’s steadfast commitment to maintaining the closure of the waterway intensified concerns over supply disruptions.

The latest development has resulted in an increase in oil prices, reigniting apprehensions regarding sustained inflationary pressures. Markets have incorporated expectations for two rate increases in 2026, with a hike in September now deemed inevitable. Industrial and financial stocks experienced a downturn, with Airbus declining by 1.3%, Safran by 1.2%, Air Liquide by 1.6%, BNP Paribas by 1.1%, and AXA by 1.3%.

In contrast, luxury stocks demonstrated superior performance, with LVMH rising by 2.6%, Hermès by 2.2%, and Kering by 3%. This uptick is attributed to optimism surrounding a recovery in the global personal luxury goods market, following Bain & Company’s report of stronger-than-anticipated demand in the second quarter, especially within the US market.