2026.01.1908:50:05UTC+00CAC 40 Slides to Year-to-Date Low as US–Europe Trade Tensions Escalate

On Monday, the CAC 40 index declined by 1.4% to approximately 8,160, marking its lowest point since the end of last year. This downturn was primarily driven by heightened trade tensions between the United States and Europe, which adversely affected investor optimism. U.S. President Donald Trump issued a threat to implement a 10% tariff on imports from eight European countries starting February, increasing to 25% by June, unless the U.S. secures control over Greenland. In retaliation, the European Union warned that it could counter with tariffs on as much as €93 billion worth of American goods. The luxury sector saw significant declines, with LVMH dropping 3.5%, while Kering and Hermès decreased by 2.3% and 2.2%, respectively. The technology sector also experienced selling pressure, as evidenced by STMicroelectronics falling 3.5%, Schneider Electric losing 1.9%, and Dassault Systèmes slipping by 1.8%. Conversely, Thales, a major player in the defense industry, rose by 1.8% after confirming its projections for 2025. On the domestic front, France advanced towards finalizing a 2026 budget agreement. This progress followed Prime Minister Sébastien Lecornu’s decision to make concessions to gain the support of Socialist parliamentarians, although the agreement still faces challenges in gaining parliamentary approval.