By 8:10 a.m., the "future" contract on the CAC 40 index—January-end delivery—was up 15.5 points at 8,366 points, signaling a slight rebound at the open after the modest profit-taking that marked the start of the week.

Despite reassuring inflation figures released yesterday in the United States, the Paris market slipped more than 0.1% to 8,347.2 points on Tuesday, logging a second consecutive session of decline. Investors appeared not only concerned by ongoing geopolitical tensions in Iran and Greenland, but also by the seemingly increasing threat to the Fed's independence in the face of repeated pressure from Donald Trump.

Some analysts are also worried about the excessive complacency among market participants and their tendency to ignore bad news. Citi strategists, for example, point out that the Levkovich Index—a barometer measuring market sentiment to assess whether conditions are stressed, balanced, or overly optimistic—is currently in a state of euphoria.

Against this backdrop of greater caution, Wall Street ended a streak of six gains in seven sessions last night, with losses of 0.8% for the Dow Jones, 0.2% for the S&P 500, and 0.1% for the Nasdaq.

After the lukewarm reception to JPMorgan's mixed results yesterday (-4.2%), Bank of America, Citigroup, and Wells Fargo will publish their quarterly figures at midday, followed by Goldman Sachs and Morgan Stanley tomorrow. These reports will provide a pulse check on the financial health of the country's major banks.

Robust earnings will likely be needed to help major stock indices resume their upward trajectory after a blistering start to the year.

"Valuations remain high, with global equities now trading at the 90th percentile relative to their historical average," notes Citi's star strategist, Scott Chronert.
"Such lofty valuations leave little room for error if companies fail to meet their earnings forecasts," he warns.

While upcoming corporate results will shed more light on the current health of major U.S. groups, they will also provide reliable clues about the economic situation in the United States, where recent indicators have proven robust.

Yesterday's inflation data, along with last week's strong labor market statistics, paint a picture of a soft landing for growth, which seems to pave the way for the Fed to continue its more accommodative monetary policy.

However, the ramp-up of earnings season will not entirely overshadow broader economic questions, and investors will closely watch, at 2:30 p.m., U.S. producer prices and retail sales for November, hoping they will show inflation has been better contained and that household consumption remained strong during the holiday season.

"Nonetheless, budget constraints are tightening (real wage growth is slowing)," note the Oddo BHF teams, "and various reports indicate that consumers are more cautious, except in the luxury segment."

The Fed's Beige Book, expected in the evening, will help determine whether regional business and demand conditions—which were disrupted until mid-November due to the government 'shutdown'—have normalized at the very end of 2025.