Paris Stock Market Rebounds on Hopes of Fed Policy Shift

The week starts on a positive note for the Paris stock market. After a plunge of nearly 3% on Friday, the CAC 40 indeed shows a rebound of 0.76% at the opening. According to analysts, this would be driven by a renewed optimism about the Fed’s policy. A turnaround that raises questions: could the American slowdown ultimately benefit financial markets? Analysis.

The Paris stock market boosted by hopes of rate cuts

Investors now see in the U.S. unemployment report a catalyst for hope. With an increase in the unemployment rate in the United States in 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, a rate cut 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, the results of listed companies are 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 the next Fed meeting in mid-September.

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.