The Paris Bourse began the session lower on Tuesday morning, after six consecutive sessions of gains, as investors grew more cautious in anticipation of a speech by Fed Chairman Jerome Powell. The CAC40 index dropped 0.5% to 6871 points.

Tuesday promises to be devoid of economic statistics or major corporate results, and the market is likely to turn once again to the Federal Reserve.

Jerome Powell, the head of the institution, is due to speak this afternoon on the theme of central bank independence at a symposium organized in Stockholm by the Riksbank, Sweden's central bank.

Investors seem to be struggling to find anything to push forward the New Year's rally, which had finally taken the CAC above the 6900-point threshold yesterday.

This latest rise takes the index's gain since the start of the year to almost 6%, the best start to a trading year in the last forty years.

"This brief and sudden upward movement always seems too fast, and a temporary consolidation could put the brakes on this extension", warn the analysts at Kiplink Finance.

The asset manager goes on to say: "Such a temporary movement is very often beneficial for an extension of an uptrend, and even more so when the CAC 40 index is rocked by euphoria, as it is at the moment.

In short, the Paris market has gone so high, so hard and so fast that many investors now seem ready to take some of their profits.

For all that, the underlying uptrend does not seem to be really in doubt.

Chart-wise, the CAC40 index has broken out above a major resistance zone between 6775 and 6850 points, which means that the uptrend could continue towards 6950 points, says Kiplink.

Investors seem to be betting on a soft landing for the economy, in both the USA and Europe, the most promising scenario for equities.

In addition, Asian markets continue to advance strongly and could soon enter a bull market, up 20% since the low seen last October, thanks to the reopening of the Chinese economy.

On Monday, U.S. equity markets ended the session in disarray as they awaited the release of the latest inflation figures and the start of the earnings season later in the week.

At the final bell, the Dow Jones gave up more than 0.3%, while the Nasdaq Composite gained more than 0.6%.

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