Stock market's CAC 40 index declines close to 2% due to concerns over tariffs leading to stock losses
Headline: French Stock Market Takes a Hit as Trump's Tariffs Bite
The French stock market is feeling the impact of former U.S. President Donald Trump's tariffs, with several French companies experiencing a decline in their stock prices. The benchmark CAC 40 was down 1.9% at 7,624.03 a few minutes ago.
The 15% tariff on French wines and spirits, part of a broader set of reciprocal tariffs affecting multiple countries, risks reducing the competitiveness of these key French export products in the U.S. market. This could lead to lower sales and economic disruptions within this sector.
Many French companies are feeling the pinch. L'Oreal, Credit Agricole, LVMH, Legrand, ArcelorMittal, Thales, Veolia Environment, Publicis Groupe, Renault, Stellantis, and AXA are among those experiencing a decrease in their stock prices. AXA, for instance, is down 6.7% due to first-half profit coming in below estimates.
Schneider Electric, Accor, Airbus Group, Edenred, Capgemini, STMicroElectronics, Dassault Systemes, BNP Paribas, Engie, Societe Generale, Hermes International, Safran, and Unibail Rodamco are down 2 to 5%. The decline in these companies is a reflection of the market volatility and economic uncertainty caused by the tariffs.
However, not all news is negative. Eurozone inflation remained stable at 2% in July, according to data from Eurostat, matching the European Central Bank's 2% target and contrary to forecasts predicting a decrease to 1.9%. Similarly, core inflation, which excludes prices of energy, food, alcohol, and tobacco, also remained stable at 2.3%.
The HCOB France Manufacturing PMI for July 2025 is 48.2, slightly lower than initial estimates of 48.4 and unchanged from June's reading of 48.1. This indicates a contraction in the manufacturing sector, but the stability in inflation rates suggests that the overall economy may be more resilient than initially thought.
One company bucking the trend is Saint-Gobain, which is declining 5.1% despite reporting a 3.4% year-over-year increase in first-half sales at constant currencies. The exact reasons for Saint-Gobain's decline are not clear, but it could be a reaction to the broader market uncertainty caused by the tariffs.
The tariffs, therefore, generate shockwaves not only in French trade sectors like wines and spirits but also influence investor sentiment in stock markets tied to these industries. The escalation has led to widespread concerns among trade partners about the detrimental consequences for their economies.
While the direct impacts on French stock indices or GDP are not yet clear, the tariffs clearly pose economic challenges to export sectors in France. It remains to be seen how these developments will unfold in the coming months.
[1] [Source 1] [3] [Source 3]
- The decline in several French companies' stock prices, such as L'Oreal, Credit Agricole, LVMH, and AXA, suggests that Donald Trump's tariffs are causing financial issues within the business sector, which may have wider economic implications.
- The uncertainty in the stock market, as evidenced by the decreased stock prices of various French companies like Schneider Electric, Accor, Airbus Group, and Thales, is partly due to the financial impact of the tariffs imposed by former U.S. President Donald Trump.
