The CAC 40 closed nearly flat at 8,183 on Friday as investors weighed domestic economic data and prospects for peace in the Middle East. France’s economy contracted 0.1% quarter-on-quarter in Q1 2026, reversing a 0.2% expansion in the previous quarter and marking the first contraction since Q2 2020. Preliminary data also showed annual inflation accelerated to 2.4% in May from 2.2% in April, the highest level since February 2024, largely driven by higher energy prices amid ongoing Middle East tensions. Meanwhile, markets assessed the likelihood of an extension to the US-Iran ceasefire after reports that both sides had agreed to a framework deal pending approval from US President Donald Trump. Luxury stocks weighed on the index, with LVMH down 1.6% and L'Oreal losing 1%, while industrials advanced, with Airbus up 1.1% and Safran gaining 0.9%.