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26 Aug 2025

European indices decline as the political crisis in France escalates

European indices declined as markets assessed the possibility of a no-confidence vote in the French government next month, following US President Donald Trump's latest attempts to interfere with Federal Reserve policy.

During Tuesday's trading, the pan-European STOXX Europe 600 index fell 0.8% to 554 points, with losses limited by a rise in defense stocks.

The German DAX fell 0.75% to 24,085 points, while the French CAC 40 fell 1.95% to 7,691 points, and the British FTSE 100 fell 0.65% to 9,261 points.

France's three main opposition parties announced they would not support the confidence vote called by Prime Minister François Bayrou on September 8 regarding his budget plans, according to CNBC.

Shares of German luxury goods company Puma fell 2.3% after jumping 16% in Monday's session. The rise was supported by a Bloomberg report that the French Pinault family, the company's largest shareholder, is consulting with advisors about a potential sale of its stake.

This comes after Trump announced via social media the dismissal of Lisa Cook, a member of the Federal Reserve Board of Governors, following months of pressure on the central bank to cut interest rates, including repeated criticism and threats to fire Fed Chairman Jerome Powell

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