CAC 40 Hits Highest Closing Level Since Late March 2025: Tech and Luxury Stocks Lead Rally

• What Drove the CAC 40 to New Heights?
• Luxury Sector: Mixed Fortunes
• Stellantis Steals the Show
• Macroeconomic Backdrop
• Currency Movements
• Why This Rally Matters
• Historical Context
• What's Next for European Markets?

European markets, excluding London, closed higher on Thursday, buoyed by strong performances in tech and luxury stocks despite the ongoing U.S. government shutdown. The CAC 40 surged 1.13% to break the 8,000-point barrier (8,056), marking its highest close since late March 2025. Semiconductor stocks particularly stood out following a landmark deal between South Korea's Samsung Electronics, SK Hynix, and OpenAI. Meanwhile, Italian luxury brand Brunello Cucinelli saw profit-taking after earlier gains, while Stellantis became the CAC 40's top performer with an 8.33% jump following positive U.S. sales data.

What Drove the CAC 40 to New Heights?

The Paris benchmark index's rally was powered by three key sectors: semiconductors, luxury goods, and automotive stocks. STMicroelectronics (+2.10%) and Soitec (+6.54%) benefited from Ripple effects after their South Korean counterparts Samsung (+3.49%) and SK Hynix (+9.86%) announced a strategic partnership with OpenAI to supply memory chips for the ambitious Stargate AI infrastructure project. Samsung revealed OpenAI's projected demand could reach 900,000 DRAM wafers monthly - a staggering figure that sent shockwaves through the tech sector.

Luxury Sector: Mixed Fortunes

Brunello Cucinelli (-0.88% to €90.24) closed lower after being among the FTSE MIB's top gainers earlier, having reported impressive 9-month results with revenue hitting €1.019 billion (up 10.8% YoY at current exchange rates). The Italian luxury house's performance nonetheless lifted peers: LVMH (+3.61%), Kering (+1.25%), Hermès (+2.73%), and Burberry (+1.56%) all advanced. "Luxury remains resilient," noted BTCC market analyst Claire Dubois. "When one major player confirms growth targets, it creates a halo effect for the sector."

Stellantis Steals the Show

The automotive giant roared ahead with an 8.33% surge to €8.81 after reporting robust U.S. sales - 324,825 vehicles sold in Q3 2025, a 6% year-over-year increase. CEO Carlos Tavares had hinted at this performance weeks earlier, but the market clearly appreciated the concrete numbers. This comes as European automakers navigate the tricky transition to electric vehicles while maintaining combustion-engine profitability.

Macroeconomic Backdrop

Eurostat data showed the eurozone's seasonally adjusted unemployment rate edged up to 6.3% in August 2025 from 6.2% in July, while remaining stable compared to August 2024. Across the EU, unemployment held at 5.9%. Meanwhile, U.S. natural gas inventories grew by 53 billion cubic feet last week - below the expected 66 billion increase but still leaving stocks 21 billion above last year's levels and a hefty 171 billion above the five-year average.

Currency Movements

The euro dipped 0.37% to $1.1693 by late afternoon trading, reflecting ongoing dollar strength amid the U.S. budget impasse. Currency traders are watching whether the shutdown might delay key economic data releases that typically inform Federal Reserve policy decisions.

Why This Rally Matters

Today's market action demonstrates how European equities can decouple from U.S. political drama when sector-specific catalysts emerge. The semiconductor sector's momentum, combined with luxury's defensive qualities and Stellantis' operational execution, created a perfect storm for the CAC 40. As one London-based trader quipped, "When tech marries luxury and cars, Paris becomes the place to be."

Historical Context

The last time the CAC 40 traded at these levels in March 2025, markets were pricing in expected ECB rate cuts. Now, with inflation proving stickier than anticipated, today's breakout suggests investors see earnings growth overcoming higher-for-longer rates. The index remains below its all-time high of 8,259 points set in January 2025, leaving room for potential upside.

What's Next for European Markets?

All eyes turn to Friday's U.S. jobs report (assuming it's released despite the shutdown) and next week's ECB meeting. The Stargate AI project's ripple effects may continue benefiting European tech suppliers, while luxury brands face the test of maintaining growth amid Chinese economic uncertainty. As for Stellantis, its ability to sustain U.S. momentum will be crucial.