Buyers were somewhat more active on the Paris market, but sellers maintained pressure despite a rare positive signal from the Federal Reserve that seemed likely to halt the slide and encourage a "buy the dips" strategy.
John Williams, head of the influential New York Fed, a self-described "dove" and voting member of the Federal Open Market Committee, stated that "the Fed could still lower its interest rates 'in the short term' without compromising its inflation target." This position stands in stark contrast to four of his colleagues who recently expressed doubts about a third monetary easing in December.
According to the CME FedWatch tool, expectations for a rate cut in four weeks rebounded sharply, climbing from 35% to 70% probability.
Nevertheless, Wall Street remained cautious. Initial gains of 0.5% on the Nasdaq and S&P 500 evaporated, with indices dragged down by Nvidia, which plunged another 2.5%. The Nasdaq-100 even slipped back into the red, down 0.45%, and posted a weekly loss of 4.3%--its worst performance in seven months, since early April. This reversal is unprecedented in its scope and hasn't been seen since last April.
After opening the session down more than 1.2% (hitting a floor near 7,880), the CAC attempted to reclaim the 8,000 mark, but gains failed to hold (-0.2% at present). Trading volumes underscored buyers' lack of conviction, with only EUR1.8 billion exchanged.
The EuroStoxx50 dropped 1.2% (-3.2% for the week), following Frankfurt (-0.85%) and Amsterdam (-1.1%).
The CBOE's 'VIX' volatility index--the so-called 'fear gauge'--which saw intraday volatility of 36% on Thursday, remained jittery Friday, up 1% at 26.7.
After more than six months of nearly uninterrupted gains, volatility appears to be back in force on the markets and could become the norm through year-end.
This renewed nervousness highlights, above all, investors' lack of confidence in the continuation of the Fed's rate-cutting cycle, which had previously seemed all but certain.
Yesterday's U.S. jobs report, which far exceeded expectations, led investors to reconsider the likelihood of another rate cut next month.
The European morning was animated by the first results of S&P Global's monthly PMI surveys of private sector purchasing managers.
The flash HCOB composite PMI for overall activity in the eurozone came in at 52.4 in November, down slightly from October's 52.5, still indicating solid growth in private sector activity.
In France, the HCOB flash composite PMI for overall activity rebounded from 47.7 in October to 49.9 this month, its highest level since August 2024, signaling near-stagnation in private sector activity in November.
France's synthetic business climate indicator, calculated by Insee from business leaders' responses, rose by one point to 98 in November, approaching its long-term average of 100.
With renewed uncertainty surrounding Fed policy, which is likely to keep investors on edge, it seems unlikely that equity markets will return to the calm seen since the start of the year.
With earnings season over and U.S. economic indicators returning after a six-week government shutdown, investors are turning their attention to the American economy and the Federal Reserve, watching closely for any sign of economic conditions or potential monetary policy shifts.
This promises continued turbulence for equities, and investors accustomed to snapping up bargains after recent market dips--following the "buy the dips" adage--may find themselves disappointed this time.
In the bond market, the 10-year French OAT yield fell 2 basis points to 3.466%, while the equivalent German Bund dropped 3 points to 2.689%, widening the spread to 77 basis points.
In London, Brent crude slipped 1.65% to $62.20, with WTI falling by a similar margin to $58.
The euro edged down another 0.2% against the greenback, to $1.1500. The yen rebounded 0.8% to 180.00 (+0.6% against the dollar to 156.6 after hitting a low of 157.5 the previous day). The yuan also rose, gaining 0.45%.
In French corporate news, Veolia announced an agreement with Enviri to acquire Clean Earth, calling it "its largest and most transformative acquisition since merging with Suez, both for accelerating growth in the United States and in the American hazardous waste sector."
After a week-long suspension, Ubisoft returned to the Paris market at 10 a.m. following the release of its half-year results. The group posted a net adjusted group share loss of −EUR37 million in the first half of its 2025-26 fiscal year, compared to a −EUR208.1 million loss a year earlier. Non-IFRS diluted earnings per share came in at −EUR0.28, versus −EUR1.64 last year. The stock was up nearly 11% by late morning.
Canal+ announced last night that it has secured the renewal of 100% of its exclusive rights to the UEFA Champions League--the most prestigious European football competition--which it will continue to broadcast in France until 2031, to the "great relief" of analysts covering the stock.
