European Stock Markets Stumble, CAC 40 Under Political Pressure

In Paris, the CAC 40 dropped by 1.9%, falling below 7,700 points, driven by sell-offs in financial and industrial stocks. The announcement by François Bayrou regarding a confidence vote in Parliament on September 8 has heightened fears of government instability. The National Rally, La France Insoumise, and the Greens have already indicated their intention to vote against the motion, further weakening the executive's position. This political uncertainty has resulted in a surge in French bond yields, with the spread against the German Bund reaching an unprecedented peak since April. "Yes, it's a risk, but the ultimate risk is to do nothing," the minister stated during a press conference in Paris. "We cannot emerge from this situation without courage." In the background, global markets are also processing Donald Trump's declaration that he intends to remove Lisa Cook from her position as a governor at the Fed, a move seen as a threat to the independence of the U.S. central bank.