Over the past week, the Paris index fell 1.4%, its second consecutive weekly decline, following the 1.23% drop recorded between 12 and 16 January. Sentiment was jolted by Washington's expansionary aims regarding Greenland, along with Trump's threats to tax European countries that would not back the project, and then… by the billionaire's U-turn. "This geopolitical easing was reflected in markets with a rebound in risky assets,” report analysts at E. de Rothschild.

The mood was also fairly gloomy on other European stockmarkets: London fell 0.16% on Friday, while Frankfurt only just managed to stay afloat… 0.18%.

Markets on edge between geopolitics and monetary uncertainty

The (relative) easing of tensions around Greenland does not, however, make investors forget the many remaining flashpoints around the world, from Ukraine to Taiwan, via Gaza and Iran.

Against this backdrop, Paris was led by Thales, up 2.82% today (the CAC's biggest gainer), followed closely by Safran (+1.44%). In Frankfurt, Rheinmetall also stood out, with +1.84%, while Britain's BAE Systems added 1.66%.

"The defence sector has very significantly outperformed the major stock indices since the start of the year, whether in US, Asian or European markets,” notes Bastien Drut, head of strategy and economic research at CPR AM. "Tensions between major powers mean military budgets should continue to rise over the coming years,” he adds.

In this respect, the United States can count on much higher customs revenues: they rose from $79bn to $264bn between 2024 and 2025.

However, "although presented as a tax on foreigners, these measures weigh on US households and generate around 0.5 percentage point of inflation. At the same time, consumption remains solid but fragile, supported by a savings rate that has fallen to 3.5%, its lowest level in three years,” Oddo BHF said this morning in a sector note.

The market is closely watching the succession to Jerome Powell at the Fed, where Kevin Warsh is emerging as the favorite amid rising political pressure. The January 28 FOMC meeting will be crucial in assessing the institution's independence.

In Europe, Goldman Sachs expects the ECB to keep rates unchanged in 2026, as the threshold of economic deterioration required to act has not yet been reached. At present, policy is seen as appropriate in the face of resilient growth, with inflation close to target. Unless there is a material deterioration or negative data over several successive quarters, the status quo should therefore prevail this year.

Finally, note that France has opted to use Article 49.3 to pass the 2026 finance bill, locking in a public deficit around 5% of GDP, less ambitious than initial targets.

Mixed indicators on both sides of the Atlantic

Throughout the day, markets digested a wide series of statistics: in the euro zone, the HCOB flash composite PMI for overall activity, compiled by S&P Global, held steady at 51.5 in January, signalling a 13th consecutive monthly rise in private-sector activity, albeit at a moderate pace.

In France, in January 2026, the composite business climate indicator was stable compared with December, at its highest level since June 2024: at 99, it is almost at its long-term average (100).

Still in France, the HCOB flash composite PMI for overall activity, compiled by S&P Global, fell back from 50 in December to 48.6 for the current month, signalling a return to contraction in the French private sector in January.

In the United Kingdom, retail sales volumes rose 0.4% in December 2025, after a 0.1% fall in November (a figure unrevised from the previous estimate), according to the Office for National Statistics (ONS).

In Germany, the Composite Purchasing Managers' Index (PMI), which covers manufacturing and services, came in at 52.5 in January, versus 51.3 in December, S&P Global said. It had been expected at 51.8.

Finally, across the Atlantic, S&P Global's Composite PMI, covering manufacturing and services, came in at 52.8 in January, in line with expectations after 52.7 in December. The services PMI was 52.5 after 52.5 in December and a consensus of 52.9. The manufacturing PMI rose to 51.9 from 51.8, versus a consensus of 52.

Stocks on the move

In European corporate news, Ericsson gained 10.5% after significantly improving profitability in 2025 by prioritising margins over revenue. The release also lifted rival Nokia, whose shares rose 2.6%.

Stif surged 14.7% after annual revenues beat expectations. Portzamparc expects results to do the same. The research firm remains positive, with a slightly raised target from €79 to €81.70.

Amongst notable decliners, Adidas (-5.4%) was hit by an RBC downgrade, from "outperform” to "neutral”, with the target cut from €190 to €160.

Finally, Ubisoft fell nearly 41% over the past week after announcing a deep reorganisation of its business, marked by the cancellation of six video games, including the highly anticipated remake of "Prince of Persia: The Sands of Time”, and the postponement of seven other titles. The company cites accelerated impairment of €650m linked to the cancellations, and has lowered its net bookings forecast to around €1.5bn.

In London, Brent crude gained 2.1% to $65.8 a barrel.
Gold is trading at record highs at $4,982 an ounce (+0.9%).
Finally, the euro is steady against the greenback at around $1.176.