The CAC 40 rose 1.2% to close at 8,614 on Monday as investors welcomed renewed hopes for diplomacy after US President Donald Trump announced that talks with Iran would resume following his decision to cancel a planned military strike.
Easing geopolitical tensions pushed oil prices lower and reduced expectations of further ECB tightening, although a September rate hike remains widely anticipated.
Sentiment was also supported by a fresh round of corporate earnings.
Luxury stocks advanced, with LVMH (+2.5%), Hermès (+1.9%), and Kering (+1.5%) gaining after Kering reported 1% first-half revenue growth as Gucci's sales decline moderated.
Industrial stocks also outperformed, led by Schneider Electric, Airbus (+2.9%), and Safran (+3.8%), following Airbus' strong first-half results and progress in resolving its Pratt & Whitney dispute.