For 48 hours, the financial world revolved around a single point: Beijing, where Donald Trump, accompanied by several leading figures of American capitalism, was received with great fanfare by Chinese leader Xi Jinping.
While thorny issues crowded the agenda (tariffs, access to rare earths, Taiwanese sovereignty, ties with Iran and Russia...), the final takeaway remains thin.

'Expectations ahead of the summit had even been deliberately lowered,' notes Bernd Weidensteiner, analyst at Commerzbank. 'Both sides had signaled in advance that a major breakthrough was unlikely, and the very framing of the summit - centered on 'stability' as a three-year objective - reflects a strategic choice: managing the relationship rather than fundamentally reshaping it.'

Beyond the performative cordiality between the two leaders, the summit was weighed down by deep structural disagreements, and the lack of enthusiasm from both parties to find solutions offered little comfort to markets. This was further compounded by Xi's stern warning on Taiwan, stating that any mishandling of the issue could lead both nations into 'conflict' and an 'extremely dangerous situation.'

Semis in retreat

In France, the Paris index was dragged down by STMicro (-4.22%), facing significant profit-taking after a year-to-date performance of nearly +144%. Other stars of the semiconductor sector also saw sharp contractions, including Germany's Infineon (-4.23%) and the Netherlands' ASML (-4.42%).

Until now, the AI winners - semiconductor manufacturers and their equipment suppliers - seemed immune to rising inflationary fears, but the climb in bond yields appears to be prompting investors to trim risk exposure. This evening, the 10-year T-Bond yield reached 4.59% (+13 bps) while the French OAT of the same maturity stood at 3.96%.

Another laggard on the CAC, Stellantis posted a 3.51% decline following the signing of a strategic cooperation agreement with Dongfeng aimed at strengthening its partnership with the Chinese automaker. The announcement was coolly received by analysts, who highlighted the European group's lag after several years of underinvestment.

Over the past week, the CAC 40 has posted a decline of approximately 2%, significantly underperforming the FTSE (-0.5%) and the DAX (-1.7%).

Iran in the background

The retreat in indices was also supported by the rise in oil prices, with Brent now trading around 109 USD per barrel (+2.3%) as the situation in Hormuz remains deadlocked.

Abbas Araqchi, the Iranian Foreign Minister, signaled that Iran was open to discussions, but 'only if the other party showed seriousness and sincerely sought genuine negotiations.'

It is difficult to argue with him: questioned aboard Air Force One after his trip to China, Donald Trump remarked on potential Iranian proposals: 'If I don't like the first sentence, I just throw it away... if they talk about nuclear, in any form, I don't read the rest of their letter.'

Positive statistics fail to reassure

Markets nevertheless attempted to find solace in two data points released today across the Atlantic. Manufacturing activity in New York State rose sharply in May, according to the New York Fed. The Empire State Manufacturing Index climbed nine points to 19.6, its highest level in over four years.

Furthermore, on a monthly basis, U.S. industrial production increased by 0.7% in April, following a 0.3% decline in August. It had been expected to rise by 0.3%. The capacity utilization rate stood at 76.1%, compared to the 75.8% expected and 75.7% the previous month.
This was not enough to relieve U.S. markets: this evening, the S&P 500 and the Dow Jones are down 1.2%, while the Nasdaq has shed 1.6%.