After spending much of the session in the red, the Paris Bourse managed to break above water late in the day, resisting a sharp pullback in banking stocks, with Credit Agricole down 3.66%, Societe Generale losing 3.59%, and BNP Paribas shedding 1.41%. The sector's decline is particularly notable given that the earnings reports from all three institutions were generally robust.

Indeed, Credit Agricole posted a group net income in line with consensus estimates (EUR 1.6bn), while Societe Generale reported a net profit of EUR 1.7bn, beating expectations by 7%. BNP Paribas performed even better with a net result of EUR 2.97bn, 10% above consensus. This disconnect between fundamentals and market reaction reflects growing investor anxiety regarding the economic outlook.

A somber economic context

These fears were further fueled this morning by several disappointing indicators. Insee announced that French GDP stagnated in Q1 2026 (0.0% following +0.2% in the previous quarter), confirming a loss of growth momentum. At the same time, inflation appears to be rebounding, with an expected increase of 2.2% in April following +1.7% in March.

The picture is similar at the European level. According to Eurostat, Eurozone growth is expected to reach only 0.1% in the first quarter, falling short of expectations (+0.2%). This slowdown is reinforcing investor caution.

Adding to this is the lack of progress in the Middle East. Fitch Ratings warned of risks associated with a prolonged crisis in Iran, citing a potential impact on public finances and a 'growing global systemic risk'.

In this uncertain climate, the ECB unsurprisingly left its rates unchanged (2%), a decision widely anticipated by the markets. 'The most important signal lies in what the Governing Council did not say', noted Madison Faller (JP Morgan Private Bank), highlighting a strategy of maximum flexibility. The institution could proceed with a single 25-basis-point hike this year before an extended pause, barring a resurgence of inflationary pressures.

'The ECB has clearly opened the debate on a possible rate hike in June if the situation deteriorates again', added Juliette Cohen, strategist at CPR AM.

Stocks on the move

In Paris, the CAC 40 was buoyed by Engie (+4.93%), Veolia (+3.25%), and STMicro (+2.9%).
Conversely, Stellantis fell 6.4% following earnings that missed expectations, with earnings per share coming in at EUR 0.14 against the EUR 0.21 expected.

Also of note was the performance of Air France-KLM, which gained 3.8% after stabilizing its net loss at EUR 252m in the first quarter, despite a constrained environment and soaring oil prices. The group also recorded solid revenue of EUR 7.48bn, in line with expectations.

Finally, Soitec (+12.25%) posted the strongest gain on the SBF 120. This return to favor is linked to a perceived gap between short-term fundamentals, which remain weakened (notably by persistent softness in the mobile market), and a potential for re-rating tied to strategic growth drivers.

Elsewhere in Europe, DHL stood out with the largest gain on the Euro Stoxx 50 index, rising 7.51%, ahead of Bayer (+4.39%), while Munich Re and Deutsche Börse trailed the pack (-3% and -1.32%).

Black gold and key figures

On the geopolitical front, Middle East tensions continue to drive energy prices higher. Persistent disruptions in the Strait of Hormuz are maintaining pressure on supply, propelling WTI to USD 104 per barrel and Brent to around USD 110. The prospect of a prolonged blockade, mentioned by a US administration official, is heightening global supply concerns.

Lastly, US indicators published today also confirmed a slowdown in activity. US GDP grew by 2% in the first quarter, below expectations (2.2%), following a previous increase of 0.5%.

However, weekly jobless claims came in at 189,000, better than anticipated, reflecting the resilience of the labor market.
In parallel, the Chicago manufacturing index contracted in April, contrary to expectations.