The Paris stock market fell by 0.4% this morning, to around 7595 points, penalized in particular by Dassault Systèmes, which gave up 5% after lowering its annual forecasts (see below), and Capgemini (-2%).

Christopher Dembik, Investment Strategy Advisor at Pictet AM, warns that "it is clear that the particular political context in France will continue to weigh on stock market momentum".

"However, we must be wary of exaggerating the impact of politics on the CAC 40's performance", says the analyst.

While the Paris Bourse has been on a tear recently, dropping 4.7% since the European elections on June 9, Wall Street continues to set record after record.

Buoyed by semiconductor-related stocks, the Nasdaq Composite last night set its fifth all-time high in a row, and its 25th record this year.

The S&P 500 was not to be outdone, reaching its 35th record since January 1 last night.

However, the coming days are likely to see a new bout of volatility, with the publication of the latest US inflation figures on Thursday, which will be closely watched by investors.

Federal Reserve Chairman Jerome Powell is due to appear before Congress today, where he is likely to acknowledge some progress in the fight against inflation, while reiterating that the Fed remains "data-dependent".

"This is usually seen as a signal that the rate-cutting cycle is about to get underway", points out Christopher Dembik at Pictet AM.

According to the Fedwatch barometer, traders are currently expecting a rate cut in September with a probability of almost 74%.

Investors are also counting on a promising crop of second-quarter results to restore some of the optimism that has characterized stock markets since the start of the year.

The season kicks off in earnest on Friday, with the accounts of major US banks JP Morgan, Citi and Wells Fargo.

According to FactSet data, analysts expect US corporate profits to rise by 8.8% year-on-year, their best performance since early 2022.

In a sign of market confidence, assets considered safe, such as German Bunds, barely moved yesterday, allowing the spread with French OATs to contract to around 66 basis points. This morning, the 10-year Bund is trading at 2.53% versus 3.19% for the OAT.

In French company news, Dassault Systèmes has announced that it is adjusting its annual forecasts, now targeting total sales growth of between 6 and 8% (compared with 8-10% previously), as well as EPS growth of 8 to 11% (instead of 10-12%).

Saint-Gobain has announced that it has finalized the acquisition of CSR Limited, a leading player in building materials in Australia, with sales of A$1.9 billion and an EBITDA margin of around 18% for its last financial year.

Stellantis said on Tuesday that it plans to equip more models with its hybrid powertrain technology to meet growing demand from its European customers.

Saft has announced that it will supply MDA Space Ltd with more than 250 rechargeable lithium-ion batteries to power the MDA Aurora product range, which supports the transition from analog to digital satellite technology.

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