The CAC 40 index fell on Friday, erasing the modest recovery seen earlier in the week as investors grappled with a dual threat of escalating geopolitical risk and persistent inflationary pressure.
The sell-off was broad-based but particularly acute in the technology sector, where high valuations are increasingly vulnerable to shifts in risk appetite.
STMicroelectronics led the decline among major constituents, reflecting wider weakness in the semiconductor supply chain.
The chipmaker's shares tumbled as traders rotated out of growth assets, fearing that renewed tensions between the United States and Iran could disrupt global logistics and energy supplies.
This geopolitical friction is compounding concerns that central banks may be forced to keep interest rates higher for longer to combat sticky price pressures.
The market's reversal comes just one day after the CAC 40 staged a brief rebound, rising 0.56% to 8,298.81 points on Thursday morning.