The CAC 40 declined by 0.7% to 7,992 on Tuesday, reversing the gains observed in the prior session and reflecting losses across European markets. This movement was influenced by apprehensions regarding inflated AI valuations and ongoing geopolitical tensions in the Middle East, which negatively impacted market sentiment.
Oil prices increased after reports emerged of a US strike on Iran’s Qeshm Island, countering recent declines that were fuelled by optimism regarding a potential diplomatic resolution between Washington and Tehran. Domestically, sentiment continued to be weighed down by apprehensions regarding France’s fiscal outlook following Fitch Ratings’ unexpected revision of the country’s outlook to negative.
This decision was attributed to worsening public finances, high levels of government debt and borrowing costs, sluggish economic growth, and ongoing political uncertainty. Most stocks traded in negative territory, with declines led by STMicroelectronics at -3.1%, followed by Dassault Systèmes at -2.3%, Safran at -1.4%, Schneider Electric at -1.3%, and Airbus at -1.2%.
