Paris Stocks Soar as Fed Policy Pivot Sparks Market Frenzy

Paris bourses stage a bullish breakout—because nothing fuels rallies like desperate hope in central bank mercy.

Fed whispers send CAC 40 flying

Traders pile into risk assets as Powell's potential rate cut hints trigger classic 'bad news is good news' algo reactions. Never mind that the policy shift signals economic distress—markets will take their sugar rush wherever they can get it.

The French market's 2.3% surge mirrors global euphoria, proving yet again that financial markets run on monetary heroin. When the withdrawals hit? That's a problem for Future You.

In Brief

• The Paris stock market rebounds thanks to expectations of a Fed rate cut.
• Despite declining profits, investors remain confident in light of favorable monetary signals.

The Paris stock market boosted by hopes of rate cuts

Investors now see in the U.S. unemployment report a catalyst for hope. Within July, markets indeed anticipate a possible turning point in the Fed’s monetary policy.

Result: the probability of an interest rate cut in September ROSE from 38% to over 80%.

For operators, this expected easing is a windfall. Indeed,makes stocks more attractive in a context where market volatility has recently strengthened risk aversion.

Disappointing results, but renewed confidence in the stock market

Despite a global economy still under pressure, theare not as bleak as expected. Of the 39 CAC 40 companies, quarterly results show a net profit totaling 51.8 billion euros. This represents a decline of 28%. As for yield, it remains under pressure due to the strong euro and tensions related to U.S. tariffs.

Yet, the stock market already anticipates a lull. Even the French 10-year borrowing rate remains stable at 3.35%. This signals a reassured market. In this context, eyes are now focused on.

In any case, the stock market could start a bullish cycle if optimism lasts (despite uncertainties over public debt or geopolitics). August therefore promises to be decisive.

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