The CAC 40 Index Closes 0.64% Lower

The CAC 40 Index dropped 55 points or 0.64 percent on Monday to close at 8582 points. Losses were led by Kering (-4.34%), Stellantis NV (-3.73%) and Saint-Gobain (-3.00%). Offsetting the fall, top gainers were STMicroelectronics (3.25%), Sanofi (1.17%) and Schneider Electric (0.66%).

The CAC 40 shed 0.7% to close at 8,580 on Monday amid geopolitical risks and a lack of progress in diplomatic efforts to resolve the Iran war, as tensions in the region escalated. Iran has decided to shift its policy from defensive to “fully offensive” due to the deadlock in efforts to reach a permanent end to the war with the US, a senior Iranian official said, while US President Donald Trump further escalated his rhetoric. Oil prices moved higher amid the ongoing conflict near Hormuz. Luxury stocks posted losses amid heightened risk aversion, with LVMH shedding 2.7%, L’Oréal down 2.5%, Hermes losing 1.6% and Kering tumbling 4.3%. Industrials traded mostly lower, with Airbus shedding 0.5%, Air Liquide down 0.9% and Thales losing 1.3%. Financials fell on energy-driven inflationary pressures, with BNP Paribas down 0.9% and AXA shedding 1%. In contrast, tech stocks gained, tracking strength in US chipmakers, with STMicroelectronics jumping 5.1% and Schneider Electric up 0.8%.

The CAC 40 traded little changed around 8,641 on Monday, following previous week's decline as investors further pared expectations of a near-term Federal Reserve rate hike. Soft US economic data reinforced the view that the Fed may keep interest rates unchanged in September, with markets now pricing in roughly a 67% probability of a pause, up from less than 50% a month ago. In Europe, attention is turning to the release of the ECB’s latest Monetary Policy Meeting Accounts later this week after policymakers left key interest rates unchanged in July. Meanwhile, investors largely brushed aside renewed geopolitical tensions in the Middle East, where Israel launched fresh strikes on Lebanon while President Donald Trump prepared additional sanctions against Iran. On the corporate front, STMicroelectronics surged 3.6%, tracking strength in global technology stocks. In contrast, Danone (-1.3%), Saint-Gobain (-1.1%), and Dassault Systèmes (-1.0%) ranked among the worst laggards.