The trading session was turbulent on equity markets amid rumors that the European Commission may ease its emissions trading system by extending the allocation of CO2 quotas to industrial firms.

The news, revealed by German daily Handelsblatt, triggered a plunge in shares of companies (Vicat, Holcim...) that had heavily invested in decarbonization, while benefiting other, more polluting players – notably chemical companies. The result? Air Liquide posted the day's strongest gain (+5.7%), closely followed by auto sector players Renault (+5.1%), Stellantis (+3.4%), and Michelin (+3.4%).

Across Europe, London also finished sharply higher (+1%). The City was notably lifted by Entain (+10.5%), which soared after results from its BetMGM subsidiary. MGM, which owns the other half of BetMGM, jumped 11% on the S&P 500.

In contrast, Frankfurt (-0.5%) was dragged down by cement maker Heidelberg Materials (-9.8%) and Siemens (-7%).

In the United States, markets were mixed, with investors weighing a 1.5% drop in the Nasdaq against a 0.6% rise in the Dow Jones, while the S&P 500 hovered between the two at -0.5%.

Stocks on the Move

Publicis fell 2.2%, ranking among the CAC 40's biggest decliners following the release of its annual results. The stock was notably hit by a downgrade from Barclays, which shifted its rating from "overweight" to "equal weight."

Oddo BHF reiterated its "outperform" stance on Amundi, raising its price target from 80 to 84 euros by end-2026 (post-DPS detachment) to reflect strong operational momentum and the announced SBB (share buyback program).

TotalEnergies and Tikehau Capital will create a joint investment platform aimed at supporting the rollout of public urban charging infrastructure for electric vehicles in Belgium and the Netherlands.

Soitec (+23.3%) rebounded after a much stronger-than-expected sequential improvement. Quarterly revenue came in at 160 million euros, down 29% year-on-year, but up 18% from the previous quarter, driven by Edge & Cloud AI. This unexpected year-end acceleration outweighed ongoing weakness in smartphones and automotive.

In Europe, Novo Nordisk (-17%) plunged after issuing 2026 guidance well below expectations. The pharma group expects adjusted sales and operating profit to fall between 5% and 13%, citing steep price pressures in the US and increased competition in obesity treatments. This regime shift, unprecedented since the launch of Wegovy, sent shockwaves through the stock despite quarterly sales beating forecasts.

A Flood of Indicators

Across the Atlantic , the US private sector created 22,000 jobs in January, versus a consensus of 46,000, after 41,000 in December, according to the ADP survey.
Private sector growth in the United States accelerated moderately in January, according to S&P Global's composite PMI, which came in at 53, up from 52.7 in December 2025.

The non-manufacturing purchasing managers' index stood at 53.8 in January, above a consensus of 53.5, the Institute of Supply Management (ISM) announced. It was also 53.8 in December.

"In the absence of this week's jobs report, private sector statistics (ADP, ISM) continue to show very weak momentum in the US labor market. Excluding healthcare, the private sector has been shedding jobs on average in recent months," commented Bastien Drut, head of strategy and economic research at CPR AM.

Data released by the US Energy Information Administration (EIA) showed US crude oil inventories stood at 420.3 million barrels for the week of January 26, a drop of 3.5 million barrels from the previous week, where specialists had expected a more limited decline of 2 million barrels.

In France, the HCOB composite PMI for overall activity fell below the unchanged mark of 50 for the first time in three months in January, at 49.1 versus 50 in December.

In Germany, the services PMI for January came in at 52.4, below the expected 53.3, after 52.7 in December.
In the eurozone, the HCOB composite PMI for overall activity slipped from 51.5 in December to 51.3 in January, indicating only modest growth in the eurozone's private sector – the weakest since last September.

Closely watched, the eurozone's annual inflation rate is expected to reach 1.7% in January 2026, down from 2% in December, according to a flash estimate from Eurostat, the EU's statistical office, entirely in line with economists' expectations.

A No-Surprise ECB... But Still Under Scrutiny

Tomorrow, the European Central Bank meeting is widely expected to confirm a status quo on monetary policy.

"The lack of surprises in January inflation reinforces the ECB's baseline scenario, which foresaw a sharp slowdown in inflation at the start of 2026 thanks to energy and services components. It confirms that the ECB is currently 'well positioned' and that it would take a lot for it to move in either direction. The current status quo is set to last," notes Juliette Cohen, strategist at CPR AM.

However, "given the decline in core inflation, the risk of an interest rate cut is probably higher than that of a hike," adds Dr. Vincent Stamer, analyst at Commerzbank.

Berenberg goes even further: "We expect the European Central Bank (ECB) to raise its key rate from mid-2027, moving it from its current 2% to a near-neutral level of about 3% by early 2028. As a result, growth should moderate and return to its trend pace in 2028," says Holger Schmieding, Chief Economist.

Other Key Figures
In London, Brent crude fell 0.5% to around 67.5 US dollars (USD) per barrel.
Gold slipped 0.4% to about 4,925 US dollars (USD) per ounce.
Bitcoin continued to contract, dropping 2% to around 74,000 US dollars (USD).
Finally, the euro lost 0.2% against the greenback, trading near 1.179 US dollars (USD).