French CAC 40 Index Sheds Initial Declines, Modestly Gains
In the financial landscape, a cloud of uncertainty looms over the upcoming August 1 deadline for the US-EU trade deal. The European Commission and the White House have been at odds over the details, creating market turbulence, particularly in French stocks.
The benchmark CAC 40 is buoyed by gains from Eurofins Scientific, Kering, LVMH, Stellantis, Edenred, Renault, Teleperformance, Pernod Ricard, Hermes International, and Dassault Systems. Eurofins Scientific leads the pack with a 4% increase, followed by Kering and LVMH, up 3.9% and 3.5%, respectively. However, these gains are somewhat offset by the uncertainty surrounding the trade deal.
The EU has proposed a quota system that would benefit EU steel and aluminum exports, while the U.S. fact sheet focuses on meaningful quotas favouring U.S. exports. Both sides agree on addressing non-tariff barriers, particularly in digital trade and agricultural products like pork and dairy, aiming to streamline certifications and eliminate unjustified barriers.
This ambiguity in the details has created uncertainty in markets, including French stocks, given France's significant industrial and agricultural sectors tied to EU trade dynamics. A trade deal that favours balanced quotas and reduces tariff and non-tariff barriers could positively impact French exporters by improving access and reducing costs for steel, aluminum, and agricultural goods. Conversely, unresolved disputes or perceived U.S.-favoured terms may dampen investor confidence and weigh on French equities sensitive to international trade conditions.
Elsewhere in the French economy, consumer confidence showed a marginal improvement in July. The consumer sentiment index rose from 88 to 89, and the assessment about personal financial situation, both past and future, improved slightly as well. However, U.S. President Donald Trump's position is seen to have hardened ahead of the August 1 deadline, adding to the uncertainty.
In the corporate sector, Carrefour reported a 2.8% increase in net sales for the first half of 2025 compared to the same period last year. The Q2 2025 net sales stood at 21.3 billion euros, marking a modest increase from Q2 2024. However, Michelin is experiencing a decline of 1.65%.
Meanwhile, other French stocks are subdued in cautious trade on Friday. Capgemini, Saint Gobain, Airbus, Vinci, Air Liquide, Unibail Rodamco, AXA, Safran, Schneider Electric, Publicis Groupe, Legrand, ArcelorMittal, and Danone are lower by 0.4 to 0.8%.
Despite the uncertainty, European Union officials express optimism about a possible trade deal with the United States. If a deal is reached, it could bring clarity to the markets and provide a boost to French stocks and consumer confidence. However, if talks fail, the EU has adopted countermeasures targeting €93 billion worth of U.S. products, to be enforced on August 7.
In summary, while the deal advances and receives praise for progress, its final shape remains uncertain just before the deadline, and this uncertainty likely introduces volatility in French stocks related to trade exposure.
Investors may find potential opportunities in the stock-market, as the progress of the US-EU trade deal holds the possibility of bringing clarity and a boost to French stocks. Consequently, a deal that addresses tariff and non-tariff barriers effectively could positively impact French exporters, but continued uncertainty or perceived favoritism could instead dampen investor confidence and affect the performance of French equities.