The CAC 40 shed 0.2% to close at 8,637 on Friday amid stalled negotiations to end the conflict in the Middle East. Persistent geopolitical tensions continued to fuel concerns over supply disruptions and inflation risks, with US President Donald Trump renewing calls for tougher economic pressure on Iran, while Tehran reportedly adopted a more assertive military posture. Annual inflation rose to 2.1% in July from 1.8% in June, confirming preliminary estimates and reinforcing expectations that price pressures remain elevated. Bond yields moved higher on energy-driven inflation concerns as oil prices rose, pressuring credit-sensitive stocks. Luxury shares posted losses amid higher risk aversion, with LVMH down 0.3%, L’Oreal shedding 0.9% and Kering losing 1%. Financials closed mixed, with Societe Generale down 0.5% and BNP Paribas edging lower, while AXA and Credit Agricole each added 0.6%. STMicroelectronics declined 1.7%, tracking weakness in US tech shares.