Consultation Held on Proposal for Council Directive Regarding Uniform Food Labeling across Member States
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The Paris Stock Exchange, home to the CAC 40 Index, faced a precarious start on Tuesday, May 6, as traders weighed the ongoing trade war and the looming Federal Reserve (Fed) monetary policy meeting. As the clock struck 9:50 AM, the CAC 40 dipped by 0.24%, shedding 18.71 points to 7,709.22 points. Yesterday, it ended with a minor decline of 0.55%, at 7,727.93 points.
Jim Reid, an economist at Deutsche Bank, noted the waning prospects of a trade truce due to the lack of progress in negotiations and a message from Donald Trump suggesting 100% tariffs on foreign films. This has heightened concerns surrounding the de-escalation of trade tensions among investors.
However, US Treasury Secretary Scott Bessent hinted on Monday that 17 countries have been offered "outstanding" trade deals by the US. Bessent also suggested substantial advancements with China, a country subject to tariffs up to 145%, in the coming weeks. Despite this optimistic outlook, investors remain apprehensive without concrete details.
This week, the Fed's monetary policy decision is under the spotlight, following a two-day meeting scheduled for Wednesday. Historically, the Fed has kept its rates between 4.25% and 4.50% since December. Nevertheless, François Rimeu, a strategist at Crédit Mutuel AM, anticipates no rate adjustments at the upcoming meeting, given the current economic data doesn't warrant a decrease.
Industrial and aerospace stocks have been hit particularly hard by the uncertainty surrounding Donald Trump's tariffs, as they are sensitive to global economic conditions. Saint-Gobain, ArcelorMittal, Safran, and Airbus were all in the red by 1.18%, 1.78%, 1.48%, and 1.88%, respectively, at 9:50 AM.
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Keywords: Stock market, CAC 40, Customs, Donald Trump, Trade war
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The ongoing trade war and the Federal Reserve's monetary policy decision are causing uncertainties in the stock market, as evident with the CAC 40's dip on Tuesday. Investors are being cautious, particularly with industrial and aerospace stocks that are sensitive to global economic conditions, including those like Airbus and Safran. For savvy investors seeking guidance in navigating the market, Momentum, our premium investment newsletter, offers valuable technical, economic, and financial analysis to help you make informed decisions and trade smarter, not harder. Subscribe to our annual subscription and enjoy five months complimentary.
