Paris Stock Exchange displayed unexpected resilience amid market volatility, with the CAC40 index up 0.3% to around 7965 points, achieving a weekly gain of 0.5%. The European Central Bank’s fourth consecutive interest rate cut bolstered investor sentiment, leading to a 0.9% rebound in the Paris market. Meanwhile, U.S. markets experienced modest gains, and attention is on key inflation figures from both the U.S. and Germany, alongside ongoing earnings reports from major tech companies.
Paris Stock Exchange Shows Resilience Amid Market Turmoil
The Paris Stock Exchange kicked off Friday with a modest uptick, reflecting a week marked by volatility yet demonstrating a surprising resilience in the face of recent market disturbances. The CAC40 index rose by 0.3%, hovering around 7965 points.
Despite the shockwaves from DeepSeek, a cautious stance from the Federal Reserve, and mixed financial results from several American tech giants, the Paris market has managed to achieve a symbolic weekly gain of approximately 0.5%.
ECB’s Actions Provide a Boost to European Markets
Investor sentiment was bolstered yesterday by the European Central Bank’s (ECB) decision to lower interest rates for the fourth consecutive time, signaling the potential for further monetary easing in the months ahead. Florian Ielpo, head of macroeconomic studies at Lombard Odier IM, remarked, “This dovish shift is essential for enhancing the appeal of European stock markets.”
The analyst further noted that the ECB appears to be moving toward a more accommodative stance, which is likely to support European assets in the medium term. Following three sessions in decline, the Paris market rebounded yesterday with a 0.9% gain, closing at 7941 points and recovering all losses from earlier in the week.
Meanwhile, the DAX and STOXX Europe 600 indices also capitalized on this favorable environment, reaching new all-time highs and showcasing the recent outperformance of European stocks over their American counterparts. Analysts at Danske Bank highlighted that the broadening of the upward trend is encouraging, as all 25 sectors within the STOXX 600 advanced yesterday.
On the other side of the Atlantic, Wall Street concluded the session with modest gains, with the Dow Jones up 0.4%, the S&P 500 rising by 0.5%, and the Nasdaq increasing by 0.3%. After a week of turbulence, the final session promises to be eventful with the release of key inflation figures from both the United States and Germany.
In Germany, inflation surged from 2.4% to 2.8% year-on-year in December, driven by an unfavorable base effect on energy prices, which may reverse in January. In France, consumer prices are anticipated to rise by 1.4% year-on-year in January 2025, reflecting a slight acceleration from the previous month’s rate of 1.3%.
In contrast, the Federal Reserve’s Chairman Jerome Powell has openly expressed concerns about the recent price increases in the U.S. market. The monthly PCE price deflator, the Fed’s favored inflation measure, will be closely monitored at 2:30 PM. Analyst Dilin Wu from Pepperstone cautioned that if the core PCE index exceeds the expected consensus of 2.8% year-on-year, it could prompt the Fed to delay any rate cuts.
Investors are also keeping an eye on the ongoing fourth-quarter earnings season. Last night, Apple reported results that surpassed expectations, leading to a more than 3% increase in its stock during electronic trading, despite ongoing challenges in China. Intel, once seen as an underperformer in the tech sector, also reported better-than-expected results, raising hopes for a recovery.
However, trade policy uncertainties persist, with reports indicating that Donald Trump is preparing to impose 25% tariffs on imports from Canada and Mexico starting tomorrow, which could influence market sentiment.