Stock Exchange: The CAC 40 collapses! Is it Macron's fault?

On June 10, 2024, the Paris Stock Exchange experienced an unprecedented shock. The CAC 40, a barometer of French economic health, plummeted by 1.5% at the opening. This stock market debacle followed two major events: the surprise victory of the National Rally in the European elections and the dissolution of the National Assembly by President Emmanuel Macron.

A storm invades the Paris Stock Exchange! 

The political tsunami that swept over the French scene inevitably caused massive turmoil in the financial markets. In the first few minutes of trading, panic gripped stock market investors. Consequently, the CAC 40 quickly plunged by 1.5%, a staggering drop of 150.75 points, settling at 7,851.05 points around 9:25 am.

In this stock market turmoil, certain sectors were particularly hard hit. For instance, banks suffered the heaviest losses, such as Société Générale, BNP Paribas, and Crédit Agricole. Similarly, companies reliant on concession contracts with the State were not spared, like Eiffage and Vinci. The manager of Paris airports, ADP, also bore the brunt of this wave, falling by 4.29% to 122.60 euros. Meanwhile, the euro fell sharply against the dollar, losing 0.41% to 1.0757 dollars per euro.

An explosive political context 

This painful stock market correction originates from the political earthquake caused by the European election results. Indeed, the National Rally led by Jordan Bardella, credited with about 32% of the votes, caused widespread dismay. Worse still, this far-right surge led Emmanuel Macron to make the radical decision to dissolve the National Assembly, paving the way for early legislative elections.

The dramatic drop of the CAC 40 on the Paris Stock Exchange on June 10, 2024, will be etched in history. It strikingly demonstrates the interdependence between politics and economics. Emmanuel Macron’s decision to dissolve the National Assembly, combined with the rise of the National Rally, triggered an earthquake on the Paris Stock Exchange. Now, all eyes are on the upcoming legislative elections.