Stock market's CAC 40 index drops almost 2%, largely due to concerns over rising tariffs.
French Stocks Face Uncertainty Amidst Global Trade Tensions
In the wake of U.S. President Donald Trump's announcement of sweeping new tariffs, French stocks have experienced a turbulent week. The benchmark CAC 40 index dropped by 147.94 points or 1.9%, closing at 7,624.03 on July 31, 2025.
The tariffs, set to take effect on August 7, 2025, impose reciprocal tariffs on about 69 global entities and increase penalties on certain goods and countries. However, as of early August 2025, there is no concrete evidence that French stocks or specific companies like AXA, Teleperformance, or L'Oreal have been directly impacted by this new tariff round.
AXA, for instance, is down 6.7% due to first-half profit coming in below estimates, rather than any direct impact from the tariffs. Similarly, Teleperformance is down more than 16% after lowering its 2025 like-for-like revenue growth guidance.
Other major French companies have also seen selling pressure. L'Oreal, Credit Agricole, LVMH, Legrand, ArcelorMittal, Thales, Veolia Environment, Publicis Groupe, Renault, Stellantis, Orange, and several tech companies like Schneider Electric, Accor, Airbus Group, Edenred, Capgemini, STMicroElectronics, Dassault Systemes, BNP Paribas, Engie, Societe Generale, and Hermes International have all experienced a drop of 2 to 5%.
Meanwhile, Saint-Gobain, despite reporting a 3.4% year-over-year increase in first-half sales, is declining 5.1%. The pharmaceutical sector, too, is facing heavy selling pressure due to Trump's request for 17 global pharmaceutical companies to lower drug prices in the U.S.
In a positive note, Danone is rising 1.75%, while Orange is gaining more than 2%. The HCOB France Manufacturing PMI came in at 48.2 in July 2025, slightly lower than initial estimates, suggesting a continued contraction in the manufacturing sector. However, core inflation that excludes prices of energy, food, alcohol, and tobacco remained stable in July, at 2.3%.
Eurozone inflation also remained stable at the European Central Bank's 2% target in July, with the harmonized index of consumer prices increasing 2% year-on-year. This indicates a steady economic environment amidst the global trade tensions.
As the details of the tariffs unfold and economic and diplomatic responses are made, the market reactions of these French companies will continue to be a point of interest.
[1] Source: Reuters, Bloomberg [2] Source: French Ministry of Economy and Finance, French Stock Exchange (Euronext)
- Amidst the global trade tensions and the announcement of new tariffs, finance and business sectors are closely monitoring the impact on French stocks, with companies like AXA, Teleperformance, L'Oreal, and others experiencing drops due to various factors, not solely the tariffs.
- The volatile environment caused by U.S. tariffs and political maneuvers is influencing the stock market, resulting in business news headlines and political discussions about the well-being of companies like L'Oreal, Credit Agricole, and others, as well as the broader French economy.
