Rising Oil Prices, Inflation Push CAC 40 To 4-Month Trough

France's benchmark CAC 40 index dropped to a four-month low during Tuesday trading, pressured by surging crude oil prices, climbing bond yields, and accelerating domestic inflation. The index slid to an intraday trough of 8,033.04 before paring some losses to trade down 0.17% at 8,103.75. Geopolitical frictions contributed heavily to the risk-off tone after a drone attack prompted Saudi Arabia to close a key pipeline bypassing the Strait of Hormuz, while diplomatic discussions between Iran and Gulf States were postponed. Macroeconomic data from INSEE further damped investor sentiment, revealing France's annual inflation rate accelerated to 2.4% in August from 2.1% in July, matching preliminary estimates and logging a three-month high. The pickup was primarily driven by a sharp jump in energy inflation to 16.7%. The EU-harmonized annual inflation rate also rose to 2.6%. Market heavyweight decliners included Capgemini, Dassault Systemes, and luxury giant LVMH, offsetting gains in defense and industrial names like Thales and Legrand.