CAC 40 Continues Its Rally in October 2025 as Lecornu Government Survives No-Confidence Votes
- How Did European Markets Perform Today?
- Which Stocks Drove Market Gains?
- What Macroeconomic Data Caught Traders' Attention?
- How Did Currencies React?
- What's Next for Investors?
- Frequently Asked Questions
European markets closed higher on October 17, 2025, with France's CAC 40 index climbing 1.38% to 8,188 points, nearing its all-time highs from earlier in the year. The Lecornu government narrowly survived two no-confidence motions, while Nestlé led gains after strong earnings. Meanwhile, economic data showed mixed signals from the UK and Eurozone. Here's a DEEP dive into the day's financial developments.
How Did European Markets Perform Today?
European markets ended firmly in positive territory, with the CAC 40 rising 1.38% to 8,188 points – just 70 points shy of its March 2025 peak of 8,258 points. The EuroStoxx 50 wasn't far behind, gaining 0.79% to close at 5,649 points. This bullish momentum comes despite political turbulence in France, where the newly formed Lecornu government faced – and survived – two no-confidence votes from opposition parties. The Franco-German bond spread continued its tightening trend, dropping to 76.7 basis points from 77.5 the previous day.
Which Stocks Drove Market Gains?
Nestlé (+9.30% to CHF 83.21) stole the show after announcing better-than-expected Q3 2025 sales growth alongside plans to cut nearly 16,000 jobs. This performance comes just six weeks after CEO Laurent Freixe's dismissal for violating company conduct policies. His replacement, Nespresso chief Philipp Navratil, seems to be winning investor confidence.
In Paris, Sartorius Stedim Biotech (+9.65% to €203.90) led the SBF 120 after raising full-year guidance. The biopharmaceutical equipment Maker reported strong nine-month results, stating it had "continued its dynamic growth by significantly increasing its revenue and profitability." Pernod Ricard (+2.59% to €85.54) also outperformed despite a 14.3% Q1 revenue decline, as management predicted improving organic sales trends in H2.
What Macroeconomic Data Caught Traders' Attention?
The UK economy grew 1.3% annually in August, slightly below July's 1.5% but matching expectations. Monthly GDP edged up 0.1%. Meanwhile, the Eurozone's goods trade surplus narrowed sharply to €1 billion in August 2025 from €3 billion a year earlier, with both exports (-4.7%) and imports (-3.8%) declining.
Across the Atlantic, the Philly Fed Manufacturing Index plunged unexpectedly to -12.8 in October from 23.2, marking its lowest level since April. In contrast, the NAHB Housing Market Index surged to 37 points, far exceeding the 33-point consensus, reaching its highest level since last April.
How Did Currencies React?
The euro gained 0.21% against the dollar, trading at 1.1668 at the close. Currency traders appear cautiously optimistic despite mixed economic signals, focusing instead on corporate earnings season and narrowing European bond spreads.
What's Next for Investors?
With earnings season in full swing and political risks in France temporarily contained, markets seem poised to test recent highs. However, as BTCC analyst Mark Williams notes, "The real test will come when we see if companies can maintain guidance amid shifting macroeconomic winds." Investors should watch for:
- Further developments in French politics
- Eurozone economic indicators
- Corporate earnings revisions
This article does not constitute investment advice. Market data sourced from TradingView and company reports.
Frequently Asked Questions
Why did Nestlé's stock rise despite job cuts?
Investors rewarded Nestlé for stronger-than-expected sales growth in Q3 2025, viewing the restructuring as a positive step for long-term profitability.
How close is the CAC 40 to its all-time high?
At 8,188 points, the index sits just 0.85% below its May 2024 peak of 8,259.19 points.
What was notable about today's currency movements?
The euro's 0.21% gain against the dollar came despite mixed economic data, suggesting traders are focusing more on corporate fundamentals than macro indicators.
