Paris stocks fell through the closely watched 8,000-point mark on May 12, 2026, as investors digested stronger-than-expected U.S. inflation and a Middle East situation that remained stuck, weighing on risk appetite across Europe.
By mid-afternoon in Paris, the CAC 40 was down 0.94% at 7,982.21—its fourth straight session in the red. Société Générale and BNP Paribas were among the biggest laggards, alongside Schneider Electric, Airbus, Safran, Capgemini and EssilorLuxottica.
On EssilorLuxottica, Deutsche Bank initiated coverage with a “hold” rating and a price target of 183 euros (about $198), saying first-quarter results came in below expectations. The stock was already down 40% since the start of the year, with additional risks tied to Alphabet and Apple gaining ground in the connected-glasses segment.
French borrowing costs jump, adding about $4.3 billion to the state’s bill
The pressure wasn’t limited to equities. According to Reuters, yields on France’s 10-year government bonds briefly hit 3.53%—their highest level since March—before settling around 3.50%.
The spread versus equivalent German yields, a key gauge of perceived French sovereign risk, widened to about 79 basis points, its broadest level since April.
The overall rise in bond yields since the start of the Middle East conflict is directly straining public finances: France’s Economy Ministry estimates the higher funding costs will add 4 billion euros (about $4.3 billion) to the state’s financing bill for the current year.
France trims 2026 growth outlook and lifts inflation forecast
France’s Finance Ministry also revised its projections. Expected growth for 2026 was cut to 0.9% from 1.0%, while inflation is now projected at 1.9% on average for the year, up from 1.3% previously.
The upward inflation revision is mainly tied to a surge in imported energy prices, which the ministry linked directly to geopolitical tensions.
In equities, U.S. inflation fears added to the gloom: a stronger-than-expected U.S. inflation reading pushed back expectations for Federal Reserve easing, mechanically pressuring valuations in Paris and across Europe. The mix of slowing French growth, rising long-term rates and persistent political instability has left markets searching for a bottom.
