The Paris stock market is expected to open higher on Friday for the final session of a decisive week, largely shaped by the strategic decisions of the U.S. Federal Reserve. However, it remains uncertain whether the central bank's dovish tone will be enough for the CAC 40 to post weekly gains.
As of 8:05 a.m., the December futures contract on the CAC 40 index was up 27.5 points at 8,118.5 points, indicating a modest rise at the open.
Yesterday evening, the Paris market gained 0.8% to close at 8,086 points, marking the best performance among European exchanges. Still, the CAC 40 is down over 0.3% for the week overall, making today's performance crucial in determining its final weekly result.
Global equity markets have largely digested the latest announcements from the Federal Reserve, which refrained from adopting a more restrictive stance despite the current strength of the U.S. economy and ongoing sharp divisions within its monetary policy committee.
The post-FOMC period proved particularly positive for Wall Street, despite disappointment over Oracle's weaker-than-expected quarterly results, which reignited fears that massive investments in AI could weigh on the balance sheets of major U.S. tech giants.
Weighed down by Oracle's underperformance--its shares plunged more than 10% yesterday--the Nasdaq Composite ended Thursday's session in the red, but with only a limited decline of 0.2% at 23,593.8 points, reflecting a constructive market sentiment just weeks before year-end.
"Had this setback occurred just three weeks ago, the market reaction would have been much harsher," Danske Bank analysts noted this morning.
Signaling investor confidence, the Dow Jones rose more than 1.3% last night to 48,704 points after hitting a new all-time high above 48,756.3 points during the session, while the S&P 500 advanced 0.2% to 6,901 points, bringing it within about twenty points of its absolute record.
With the major uncertainty surrounding the Fed now resolved, the question remains whether markets still have enough momentum to launch the traditional year-end rally.
Historically, global stock markets tend to rise in the final weeks of the year, buoyed by portfolio rebalancing into the year's winning stocks and early positioning for the year ahead.
However, the Dow Jones has already gained 14.5% since January 1, while the S&P 500 and Nasdaq are up 17% and 22% respectively, suggesting much of the action has already taken place.
In Paris, the CAC 40 has added 9.5% this year--a strong result considering the political uncertainties that dampened momentum in 2025. Yet, the Paris index is less than 3% below its all-time high, which could discourage investors from closing their books too early.
With the Fed meeting now behind, the market can also return to a more rational decision-making process, grounded in economic fundamentals and corporate results, with a new earnings season set to kick off in January.
In the meantime, investors will turn their focus next week to the latest eagerly awaited U.S. inflation and employment figures.
This will be the last full trading week before Christmas and New Year's, which may also lead to lighter trading volumes.
Today's key indicators include final consumer price data from France, Germany, and Spain, as well as trade balance and industrial production figures from the UK--none of which are expected to significantly move the markets.
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