The CAC 40 jumps over 1.6% as easing Iran-US tensions boost Paris

A Market Energized by Geopolitical Calm

Two days after Donald Trump announced what he called « very fruitful » discussions with Iran and the postponement of US military strikes, the Paris Stock Exchange continues to eagerly digest the news. The CAC 40, which had dropped by more than 2% on Monday morning amid fears of an open conflict in the Middle East, is now showing a strong rebound. As of 12:30 PM, the index is up 1.62%, reaching 7,869.68 points.

Almost all components of the index are in positive territory, with only three stocks declining out of the forty that make up the CAC. This unusual dispersion signals an underlying movement, a general relief rather than targeted sector excitement. The SBF 120 confirms this trend with an increase of 1.66%.

However, the context remains fraught with nervousness. The VIX, the volatility index, is at 26.78, up more than 11%. This high level serves as a reminder that while the markets welcome the potential yet still uncertain resumption of dialogue between Washington and Tehran, they have not entirely dismissed the uncertainties related to the Strait of Hormuz, a critical artery of global oil trade.

Legrand, STMicroelectronics, and Schneider Electric Leading the Recovery

At the top of the chart, Legrand shows the best performance on the CAC 40 with a rise of 3.73% to 140.55 euros. The electrical infrastructure specialist is fully benefiting from the widespread upward movement.

STMicroelectronics follows closely, up by 3.24% to 28.40 euros. The Franco-Italian semiconductor manufacturer benefits from a unique context: the group announced the launch of volume production of its STM32 microcontrollers in China, in partnership with Huahong. This step marks a concrete advancement in diversifying its global supply chain.

Schneider Electric advances by 3.23% to 249.60 euros. The stock benefits from an HSBC note, which has set a buy recommendation with a raised price target of 285 euros. Hermès gains 2.88% to 1,697 euros, despite a price target cut by JP Morgan (from 2,350 to 2,250 euros, with a neutral recommendation). Saint-Gobain completes the top gainers with an increase of 2.70% to 72.32 euros.

Orange at the back of the pack, Danone and TotalEnergies see slight decline

In a market that is largely trending upward, today's declines are limited in scope. Orange shows the most significant drop, down 1.74% at 16.90 euros. The telecom operator is in the news for several reasons: an exclusivity agreement has been signed with the Verdoso fund for the sale of Globecast, its media services business. Additionally, the group has announced the appointment of Frédéric Sanchez as the future chairman of the board, replacing Jacques Aschenbroich.

TotalEnergies slips 0.28% to 76.99 euros. The oil giant, directly exposed to Middle Eastern tensions, is moving against the market trend despite a note from Morgan Stanley that gives an « overweight » recommendation with a raised target of 88.30 euros. Paradoxically, the reduced risk of escalation in the Strait of Hormuz is weighing on oil stocks by diminishing the scenario of a crude supply shock.

Danone falls 0.26% to 68.14 euros. The food group is making several strategic announcements, including the creation of a joint venture with Arcor in the Argentine dairy market and the signing of the acquisition of Huel, a global leader in complete meals. These moves are not enough to place the stock in today's rising trend.