Around 10:30 AM, the CAC40 was down by about 1.2%, hovering near 8015 points, while the pan-European Euro Stoxx 50 dropped 1.3%. For the record, Wall Street was closed on Monday in observance of Martin Luther King's Day.

To recap, Donald Trump threatened several European countries over the weekend with increased tariffs in an effort to pressure them into supporting his plan to annex Greenland, prompting Europeans to consider retaliatory measures.

On Monday evening, the American president sparked further concern by threatening to impose a 200% tax on French wines and champagnes due to Emmanuel Macron's refusal to participate in his "Peace Council."

According to Edmond de Rothschild AM, this challenging geopolitical sequence could also entail a potentially significant economic cost, estimated at between 0.2% and 0.5% of growth depending on the severity of the tariff threat.

"When considering both goods and services, the relationship remains broadly balanced, but is substantial enough that a tariff escalation would have immediate effects on industrial supply chains, inflation, and investment," the asset management firm warns.

The issue of trade tensions is expected to overshadow the ZEW index, which measures the sentiment of German investors and analysts and is due later in the morning—a figure usually closely watched for any sign of economic recovery in Germany.

"Much hope is pinned on the stimulus plan. Its announcement last spring sparked a rebound in the ZEW index (and other business climate indices), but recent trends have become more hesitant," notes Oddo BHF.

In terms of individual stocks in Paris, LVMH (-2%) and Kering (-3%) are once again among the biggest losers on the CAC40, particularly affected by the new tariff threats issued by Donald Trump.

Conversely, Renault (+1%) is posting the best performance on the leading Parisian index, with the automaker reporting a 3.2% rise in global vehicle sales in 2025, outpacing a market up by 1.6%.

At the top of the SBF 120, Abivax surged nearly 6% after La Lettre reported that Anglo-Swedish pharmaceutical giant AstraZeneca is also in the running to acquire the French biotech company.

Virbac (+4%) also stood out in a declining market: the animal health specialist reported its fourth-quarter and full-year 2025 revenues, figures that were well received by several analysts.

Elsewhere in Europe, Wise jumped 12% in London after the fintech company posted quarterly results that beat expectations and confirmed its annual targets, now aiming for a pre-tax profit margin at the upper end of its range.

On the other hand, Logitech fell 6% in Zurich, penalized by comments from Morgan Stanley, which downgraded its rating on the Swiss computer accessories and peripherals group from "equal weight" to "underweight."