The CAC 40 Plummets Amid Wall Street AI Shock

A Session Under the Impact of the American Shock

The origin of the movement is clear: on Thursday, Wall Street recorded its largest correction since April 2025. At the close on Thursday, November 5 at 10:00 PM (Paris time), the Nasdaq 100 fell by 6.36%, the S&P 500 by 4.36%, and the Dow Jones by 3.44%. Investors fear a regulatory tightening in the United States following the midterm elections, which could impact investments in data centers, while questions about technology valuations and the profitability of AI spending were already prominent.

The wave spread to Asian markets overnight. The Nikkei 225 dropped 5.96% at the day's close at 7:30 AM (Paris time). In Europe, tension is evident everywhere: the STOXX 600 loses 1.81% during the session, the DAX 2.40%, and the FTSE 100 2.34%. The VIX index, a barometer of nervousness, jumps by about 60% to settle around 26.58 points, indicating a sharp change in the risk regime.

Paris in the Red Across the Board

The dispersion reflects the extent of the downturn: only 3 stocks in the CAC 40 are rising, while 37 are falling. Against this backdrop, the French climate remains tense. On the evening of November 4, the National Assembly rejected the first part of the finance bill for 2027, with 458 votes against, 0 for, and 2 abstentions. This budgetary sequence maintains a high risk premium on the French signature, with the spread between the 10-year OAT and the Bund standing at 148.2 basis points as of November 5.

The few rare increases stand out against the backdrop of corporate announcements. Legrand rises by 1.88% to 129.95 euros, following a session where the stock had dropped 3.5%. The group has raised its organic growth target for 2026, now between 11% and 13%, after reporting a 19.5% increase in revenue over nine months. Deutsche Bank raised its target price from 170 to 175 euros while maintaining its buy recommendation.

STMicroelectronics bucks the trend, up 2.5% to 37.99 euros, after unveiling its new generation of STM32G5 microcontrollers, aimed at powering AI data centers and robotics. ArcelorMittal advances by 0.95% to 55.02 euros, as the group reported an adjusted net income increase to $868 million and earnings per share exceeding expectations, despite a net loss linked to the shutdown of its Kryvyi Rih site in Ukraine.

Luxury, Technology, and Communication Lead Declines

The decline is impacting the heavyweights of the stock exchange. LVMH shows the steepest drop in the index, falling 3.75% to 402.95 euros, followed by Kering, which decreases by 3.29% to 184.34 euros. This comes despite the group's announcement of appointing Martine Rose as the creative director of Balenciaga, effective November 16. The luxury sector, sensitive to market sentiment, is fully affected by the trend of risk reduction.

Technology and digital services are not spared. Capgemini loses 3.56% to 125.85 euros, despite being selected by the European Commission to lead a consortium tasked with modeling cyber threats related to advanced AI models. Publicis Groupe falls 3.43% to 101.30 euros, despite JP Morgan having raised its price target from 133 to 145 euros.

Bouygues drops 3.16% to 41.73 euros following its nine-month financial results. The group raised its annual target for current operating income, but its net profit attributable to the group declined from 369 million euros to 306 million euros, due to a 569 million euro impairment of its stake in TF1.