Wall Street opened lower on Friday, affected like European markets by uncertainty surrounding the outcome of the French legislative campaign.

In late morning trading, the Dow Jones fell by 0.4% to 38,426.2 points, while the Nasdaq Composite limited its decline to 0.1%, around 17,647 points.

Skepticism about the outcome of the forthcoming elections in France is keeping investors on the sidelines, with stress mounting on the Old Continent's stock markets.

In Paris, the CAC index is poised to end Friday's session with losses of 3%, which would bring its fall for the week as a whole to over 9%.

A lot of the news now seems to be priced in, but we don't think the discount applied to French assets is going to disappear any time soon", warn the teams at Capital Economics.

As was the case ten years ago, during the eurozone debt crisis, the upheavals that followed the European elections highlighted the institutional weaknesses of the European Union and shook the single currency, which stumbled below the $1.07 mark.

The political instability in France also led to a reappraisal of risk, with investors opting for sovereign debt deemed the safest.

The yield on 10-year German Bunds eased by 11 basis points to 2.36%, while that on 10-year US Treasuries fell by four basis points to 4.20%.

Alexandre Baradez, Head of Market Analysis at IG France, comments: "The incredible resilience of the US equity markets is nevertheless astonishing.

"It's worth remembering that during the eurozone debt crisis, the S&P 500 gave up almost 20% between May and August 2011, before recovering.

As usual in this situation, cyclical stocks, which are the most exposed to changes in the economic climate, are suffering the most.

The industrial (-1.6%), materials (-1.1%) and consumer goods (-1%) sectors posted the most significant declines of the day.

Fears surrounding the political situation in Europe are likely to overshadow improving US economic data.

In terms of indicators, import prices fell by 0.4% in May compared with the previous month, confirming the disinflationary trend observed in the statistics published this week.

The Federal Reserve's statement on Wednesday that it can only envisage a rate cut this year is also weighing on the markets' weekly balance sheet.

For the week as a whole, the Dow Jones is currently down around 1%, while the Nasdaq has managed to gain exactly 3%.

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