European stocks slide on French political crisis, US Fed concerns
European stocks slid on Tuesday, August 26, 2025, as political drama in France and concerns about the US Federal Reserve's independence rattled markets.
The STOXX 600 index fell 0.7% after earlier gains attributed to Fed Chair Jerome Powell's more relaxed tone.
France's CAC 40 index drops by 1.4%
French politics are making waves: Three opposition parties refused to support a key confidence vote, putting Prime Minister Francois Bayrou's government—and its budget plans—on shaky ground.
This pushed the CAC 40 index down by 1.4%, with major banks like BNP Paribas and Societe Generale dropping over 5%.
Global impact of US political interference fears
Worries aren't just local.
President Trump's recent firing of Fed Governor Lisa Cook raised alarms about US political interference in monetary policy, sparking a global rush to ditch risky assets.
Even British American Tobacco felt the heat, losing nearly 2% after its finance chief quit suddenly.