Newsflash: France’s stock market has suddenly lurched lower, as political turmoil in Paris ratchets up a notch.The CAC 40 share index has tumbled by 1.8%, following reports that France’s new prime minister, Sebastien Lecornu, has reportedly resigned!That’s a remarkable development, as Lecornu took office less than a month ago, and unveiled key members of his new government only yesterday.These news alerts, from Reuters, came just before the market tumble:06 Oct 2025 08:42:42 - NEW FRENCH PM LECORNU HAS PRESENTED HIS RESIGNATION TO MACRON - BFM TV CITING ELYSEE06 Oct 2025 08:43:12 - ELYSEE: MACRON HAS ACCEPTED RESIGNATION OF PM LECORNUTime to wrap up….Political drama in Paris and Tokyo have gripped investors today, with mounting anxiety over politicians’ ability to address rising government debt levels.

French government bond prices have dropped today, after Sébastien Lecornu startled the markets by resigning as France’s prime minister after less than a month in the post.Lecornu quit following a row over the centrist-dominated government named by Emmanuel Macron yesterday, and amid the ongoing struggle to agree a French budget.Stocks fell in Paris, where the CAC40 index is now down over 1%.The euro weakened, losing half a cent against the US dollar.Worryingly for the French government, the gap between their borrowing costs and Germany’s hit a nine-month high.

Lecornu’s resignation plunges France into fresh chaos, and appears to leave Macron with three options,Appoint a new prime minister and make another attempt to push a budget throughHold new parliamentary electionsResign and call a presidential electionOver in Japan, stocks surged after pro-stimulus candidate Sanae Takaichi was elected as leader of the governing Liberal Democratic party (LDP),Takaichi, who is expected to become Japan’s prime minister later this month, is tipped to push for higher government spending and looser monetary policy,This hit long-term Japanese bond prices, and weakened the yen, but also drove the Nikkei 225 index up by 5% today,Several large banks said they were closing bullish trade recommendations on the Japanese yen after Takaichi’s win.

Amid the market anxiety, gold rose to a new record high of $3,949 per ounce, while Britain’s FTSE 100 share index traded over 9,500 points for the first time.The US stock market has opened higher, as traders hail the deal between AMD and OpenAI today.There’s no sign that the French political crisis is worrying Wall Street, though.The S&P 500 share index has risen by 0.25% at the open, with AMD surging by 33%.

The tumble in French bond prices seems to be having a knock-on impact on UK debt.The yield, or interest rate, on 10-year UK gilts has risen by 4 basis points today, to 4.73%, while 30-year yields are up 5bps at 5.55%.That makes the UK’s cost of borrowing a little more expensive.

The UK’s stock market has climbed to a new peak today.The FTSE 100 index of blue-chip shares has gained 18 points, or 0.2%, to hit 9510 points, extending this year’s gains to around 16.4%.Yes the UK FTSE 100 9500 Klaxon!Another all time-high for the UK stock market.

https://t.co/RKnRYSGlVUA quick reminder why French governments are falling like flies...France's total debt ratio has near doubled this century, and it is running by far the largest primary deficit in the G7.

Making the debt math work is going to be suicide for any French government...pic.twitter.

com/PAfaiUXn5SToday’s AMD/OpenAI deal is the latest “circular transaction” between the artificial intelligence pioneer and a technology company, following recent tie-ups wth Nvidia and Oracle,But Ben Barringer, global technology analyst at Quilter Cheviot, points out there is a key difference:“The news of the deal between OpenAI and AMD is an interesting development but one that’s not entirely surprising,For some time now, OpenAI has been looking to broaden out and diversify its chip supply, and this continued strategy has seen the company in talks with the likes of Broadcom and Nvidia,AMD is another big player in this space, so this deal is a logical move from OpenAI and is great news for AMD,“When comparing it to the recent deal with Nvidia, there is a key difference in today’s announcement.

In the deal between Nvidia and OpenAI, it was the former making the investment in the latter.In this deal, however, it is OpenAI investing in AMD.This sizeable investment comes in the form of a series of warrants set to vest at various milestones that are linked to the rollout of datacentre capacity.”Back in the UK, the construction sector ontinued to decline last month.UK construction output fell in September, at the slowest pace for three months, according to the latest poll of purchasing managers at UK building firms,Data firm S&P Global reports that the reduction in new construction work slowed last month, while business optimism was little-changed from August’s 32-month low.

Its construction PMI has risen to 46.2 in September, up from 45.5 in August, but still below the 50-point mark separating expansion from contraction.Anxiety over November’s budget may be hurting businesses, explains Tim Moore, economics director at S&P Global Market Intelligence:“September data suggested that the UK construction sector faced pressure on multiple fronts as residential, commercial and civil engineering work all continued to decrease at solid rates.Lower volumes of overall construction output have been recorded since January, although the latest reduction was the slowest for three months and the downturn in new orders was the softest so far in 2025.

Business activity expectations for the year ahead were among the lowest since the end of 2022, suggesting that construction companies remained cautious about the near-term outlook and have yet to see a turning point on the horizon.Some firms hope for a boost from lower borrowing costs and noted new sales pipelines in areas such as energy security markets and infrastructure projects.However, many survey respondents reported caution among clients ahead of the Autumn Budget and a general reluctance to commit to major capital expenditure projects against a subdued domestic economic backdrop.In @SPGlobalRatings construction index overall activity was considered to have marginally improved in September.However the industry continues to struggle to get “started” while uncertainty remains around the budget and interest rates stubbornly hold firm.

As a result, falls in… pic.twitter.com/gTeakE91DFElsewhere in the markets, shares in semiconductor-maker AMD have surged by a quarter in pre-market trading after securing a deal with artificial intelligence group OpenAI.Under the deal, OpenAI will buy tens of billions of dollars’ worth of chips from AMD, and will also get the right to buy a 10% stake in the chipmaker over time.OpenAI will deploy 6 gigawatts of AMD GPUs, through a multi-year deal that could accelerate OpenAI’s development of new data centres to train and power its AI models.

Dr,Lisa Su, chair and CEO of AMD, says the deal will enable “the world’s most ambitious AI buildout and advancing the entire AI ecosystem,”Sam Altman, co-founder and CEO of OpenAI, also enthused about the tie-up, saying:“This partnership is a major step in building the compute capacity needed to realize AI’s full potential,AMD’s leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster,”AMD has also issued OpenAI a warrant for up to 160 million shares of AMD common stock, which will gradually vest as specific milestones are achieved, including deployment of technical milestones, and AMD achieving certain share-price targets.

Shares in AMD are up 24% in pre-market trading, at $204.25.The French stock market has recovered a little from the shock of Sébastien Lecornu’s resignation.The CAC 40 is now down 1.3%, having dropped 2% when his exit hit the newswires.

Neil Wilson, UK investor strategist at Saxo Markets, agrees that president Macron has three options:Try again: Appoint new prime minister to try one last time to push the budget through.Bound to fail again.New parliamentary elections...

Marine Le Pen’s National Rally is already the largest party and leads the polls, so this is fraught with risk for the president, albeit a decisive win and government with a mandate from the people is exactly what’s required.Resign and call presidential election, which is currently not due to take place until 2027.This is also loaded with risk but Macron could take this ‘nuclear’ option to challenge the Left and Right head on.He adds:We have yet to hear from Macron – it could mean he’s weighing up his options carefully and we could see new elections.