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How the Trump-Zelensky Meeting Could Impact Markets: What Investors Need to Watch

The upcoming weekend meeting between Donald Trump and Volodymyr Zelensky is not just a diplomatic event—it carries major implications for capital markets, particularly in defense stocks, energy, commodities, and global risk sentiment. With Trump pushing for a quick resolution to the war in Ukraine and potential shifts in U.S. foreign policy, investors are closely watching the potential market impact.

With geopolitical uncertainty rising, here’s what traders and investors should focus on—and how different outcomes could affect stocks, commodities, bonds, and risk sentiment.

1. Trump’s Push for a Quick Peace Deal: What It Means for Markets

Trump has repeatedly claimed he could end the war in Ukraine “within 24 hours”, but his approach raises serious concerns for investors, NATO allies, and European markets. The main risk is that Ukraine could be pressured into an unfavorable settlement, legitimizing Russia’s territorial gains and disrupting global markets.

Market Risks from a Rushed Peace Deal:

• A softened stance on Russia could destabilize Europe’s security framework, affecting European equities, the euro (EUR), and risk sentiment.
• If Trump signals a reduction in U.S. military aid, it could weaken defense stocks that have benefited from ongoing support for Ukraine.
• If Ukraine is forced into a ceasefire without strong security guarantees, it could increase longer-term uncertainty, keeping gold (XAU/USD) and bonds (U.S. Treasuries) in demand.

🔹 Investor takeaway: A hasty ceasefire deal could create market volatility, particularly for European equities, defense stocks, and safe-haven assets like gold and bonds.

2. Defense Sector: Will the Rally Continue or Stall?

U.S. defense contractors—including Lockheed Martin (LMT), Northrop Grumman (NOC), Raytheon (RTX), and General Dynamics (GD)—have benefited significantly from U.S. military aid to Ukraine.

Key Considerations for Defense Investors:

• If Trump signals a cut in military aid, it could halt the momentum in defense stocks.
• If aid continues, particularly in a different form (such as NATO-led support), defense contractors could still see strong demand.
• European nations, including France and the U.K., are preparing to increase their own military spending, which could partially offset any reduction in U.S. support.

🔹 Investor takeaway: Watch Trump’s statements closely. A commitment to military spending could support defense stocks, while a shift toward diplomacy over arms aid could lead to a sector pullback.

3. Commodities & Energy: Will Ukraine’s Natural Resources Become a Geopolitical Asset?

One of the biggest surprises leading into this meeting is Trump’s push for a rare earth minerals deal with Ukraine. These critical materials are essential for industries like EV batteries, semiconductors, and defense technology.

Potential Market Impacts:

• If Ukraine agrees to U.S. investment in rare earth mining, it could benefit U.S. rare earth companies like MP Materials (MP) and Lynas (LYSCF).
• If Ukraine rejects the deal or negotiates harder terms, China could maintain dominance in the global rare earth supply chain.
• If Trump relaxes energy sanctions on Russia, it could increase global oil supply, pressuring Brent and WTI crude oil prices and energy stocks.

🔹 Investor takeaway: Watch rare earth and energy stocks. A deal with Ukraine could boost U.S. mining companies, while a softened stance on Russia could weigh on oil prices.

4. Bonds & Safe Havens: Will Investors Hedge Against Geopolitical Risk?

Global markets are sensitive to uncertainty, and this meeting could introduce a fresh round of volatility.

Potential Reactions in Bonds & Safe Havens:

• If the meeting ends without clear agreements, expect investors to buy U.S. Treasuries (TLT) and gold (GLD, XAU/USD) as a hedge.
• If Trump signals isolationist policies, expect a weaker U.S. dollar (USD) and higher bond prices as capital flows into safe havens.
• If markets view the meeting as stabilizing, expect a reversal of risk-off positioning, with money flowing back into equities.

🔹 Investor takeaway: Keep an eye on bond yields—a spike in demand for Treasuries or gold could signal rising market fears.

5. Broader Market Sentiment: Risk-On or Risk-Off?

Key Market Themes to Watch:

• If Trump backs a diplomatic resolution while maintaining aid, expect moderate market optimism and stability in equities.
• If Trump suggests a major reduction in U.S. involvement, expect volatility in defense, energy, and European markets.
• If the meeting ends in ambiguity, short-term market sentiment could shift toward risk-off positioning, increasing demand for gold, bonds, and defensive stocks.

🔹 Investor takeaway: Expect volatility. Markets will digest Trump’s comments in real-time, influencing investor sentiment across multiple asset classes.

Trump Zelensky Meeting: How Should Investors Prepare?

Keep in mind:

✅ Defense stocks: Bullish if military aid continues, bearish if Trump signals a major policy shift.
✅ Rare earths & energy: Watch for any deal announcements with Ukraine—this could move mining and energy stocks.
✅ Bonds & gold: Hawkish foreign policy = risk-on sentiment, uncertainty = demand for safe-haven assets.
✅ European equities: A soft stance on Russia could create regional market instability.

As traders and investors assess this critical meeting, staying nimble is essential. If Trump signals de-escalation, risk assets could rally—but if uncertainty rises, expect a defensive shift in portfolios.

🔹 Bottom line: Markets are watching closely. This meeting could shape global markets, trade flows, and investment risks—investors should be ready to position accordingly.

This article was written by Itai Levitan at www.forexlive.com.

Headlines:

• USD/JPY shows some life in final stretch of the week
• What is the distribution of forecasts for the US PCE?
• China banks reportedly called upon by PBOC to cut rates on dollar deposits
• BOE’s Ramsden: A gradual and careful approach is needed on rate cuts
• Bavaria February CPI +2.4% vs +2.5% y/y prior
• France February preliminary CPI +0.8% vs +1.0% y/y expected
• Italy February preliminary CPI +1.7% vs +1.7% y/y expected
• Germany January retail sales +0.2% vs 0.0% m/m expected
• Germany January import price index +1.1% vs +0.7% m/m expected
• Germany February unemployment change 5k vs 15k expected
• France Q4 final GDP -0.1% vs -0.1% q/q prelim
• China’s Politburo says will implement more proactive macro policy
• Japan PM Ishiba’s government cuts FY25/26 Budget plan to JPY 115.2tln

Markets:

• CAD leads, NZD lags on the day
• European equities lower; S&P 500 futures up 0.2%
• US 10-year yields down 2.7 bps to 4.259%
• Gold down 0.4% to $2,864.20
• WTI crude down 1.2% to $69.48
• Bitcoin down 4.8% to $80,258

There were not much major moves on the session but we’re certainly gearing up for some potential ones to close out the week/month later.

The dollar was steadier overall, holding gains following Trump’s renewed tariffs threat yesterday. EUR/USD is little changed, continuing to hug the 1.0400 level with large option expiries locking price action. Meanwhile, GBP/USD is also flat circling closer to the 1.2600 mark.

But there was some life in USD/JPY as the pair jumped above 150.00 and kept around 150.30-50 levels during the session. There wasn’t much to it with 10-year Treasury yields still flirting with a key downside break, so this may not be one that could hold out for too long. That being said, we still do have some key risk events to get through later in US trading.

The aussie and kiwi were already more subdued since Asia trading and stayed that way. AUD/USD is down 0.2% to 0.6220 with NZD/USD down 0.4% to 0.5605 currently. USD/CAD is holding its own, down 0.1% to 1.4425 in a session that offered little.

In terms of equities, European indices are lower but are recovering some poise after the opening drop. Overall, it’s still been a rocking month for stocks in Europe with the DAX helped out by the German election results from last weekend.

As for US futures, they are holding higher but there is still a sense of apprehension in the air. The selloff yesterday was notable and it’s definitely still weighing on the back of investors’ minds coming into today.

In other markets, gold is down yet again today and poised to snap its winning streak of eight consecutive weeks to end February trading. Meanwhile, Bitcoin is flirting with a key break under $80,000 with its 200-day moving average also appearing to give way – at least for now.

To close out the week/month, we’ll have to work through the US PCE price data and more Trump headlines later to sort things out before the weekend. Adding to that, month-end flows will also be something to watch out for. As such, keep an eye out for any added dose of volatility at the London fix later just in case.

This article was written by Justin Low at www.forexlive.com.

• S&P 500 futures +0.4%
• Nasdaq futures +0.4%
• Dow futures +0.3%

Trump’s tariffs threat ruined the script in trading yesterday but there was already a sense it wouldn’t take much to tear it apart anyway. US stocks have almost declined in every day this week, following what was mostly better starts. Even on Wednesday where tech shares managed to barely hang on, it really felt like a loss.

So, the gains early today are not indicative of much. Nvidia had a poor showing, alongside the Magnificent Seven, in trading yesterday falling over 8%. As such, the tentative bounce of around 1% in pre-market now is not all too convincing.

We have seen many a time where US stocks, tech shares especially, bounce back strongly after heavy blows. But there’s a feeling things are bit more challenging in this latest bout. The unbridled AI optimism has lost a bit of its allure and there are still some potential pitfalls before the weekend. The US PCE price data is due and more Trump headlines could really keep a lid on any rebound potential.

However, perhaps the more pressing concern is the break of key technical levels this week. The S&P 500 has dropped below its 100-day moving average (red line) while the Nasdaq has not only broken that but is now eyeing a potential test of its 200-day moving average (blue line).

I highlighted the danger to those levels earlier in the week here. And those risks still hold true as we look towards the weekend, where the gains thus far today are masking the shaky underlying sentiment in the market this week.

This article was written by Justin Low at www.forexlive.com.

• Prior +1.5%
• HICP +1.7% vs +1.8% y/y expected
• Prior +1.7%

There’s not too much change in headline annual inflation and likewise for core annual inflation, which held steady at 1.8% in February.

This article was written by Justin Low at www.forexlive.com.

The latest fall today now sees price fall by over 27% from the highs at the start of the year. We’ve pretty much halved the advance since the start of October and the Fib retracement above reinforces the pullback momentum. We’re now running into the 50.0 Fib retracement level of the swing higher since August-October to January. However, perhaps more importantly is that we’re seeing price break below the 200-day moving average (blue line) today.

The break of the 100-day moving average (red line) and $90,000 mark set off a heavy wave of selling in the past week. And that’s culminating with yet another key technical break now as noted above.

That’s an alarming sign as it only serves to reinforce the selling momentum. The 50.0 Fib retracement level at $79,204 might offer something to work with but we might be staring at a steeper drop towards $70,000 next for Bitcoin as the worries grow.

It’s been a tough week for risk assets in general with the dollar also keeping firmer overall. But in the case of Bitcoin, it is also suffering from some added spillover pain from Ethereum – which experienced a bit of a fallout from the whole ByBit hacking drama.

In any case, we’re approaching some cautious and alarming levels on the chart as seen above. And that’s something worth taking notice as it could lead to an even stronger pullback in crypto pricing.

The silver lining for Bitcoin is that some dips that follow the pattern above don’t quite adhere to the traditional asset class narrative; albeit with a very small sample size.

The fall from $70,000 to $50,000 last year was one example, before some consolidation then break to fresh record highs in November. Then, there was also the fall from $60,000 to $30,000 in 2021, where price quickly rebounded back to $68,000 after.

That being said, the latter was also a lesson to be heeded as price subsequently turned lower in 2022 in a fall to $18,000. So, while there are some positive experiences for dip buyers, it’s not necessarily a given.

The upshot here is to read the tea leaves and play the odds accordingly. The technical signs are troubling for Bitcoin and the fallout here comes alongside some selling in broader markets too i.e. US stocks and gold. That’s something to be wary about as we run the risk of a sharper correction across the board.

This article was written by Justin Low at www.forexlive.com.

The other state readings released around the same time:

• Hesse CPI +2.3% vs +2.5% y/y prior
• Brandenburg CPI +2.3% vs +2.3% y/y prior
• Saxony CPI +2.3% vs +2.4% y/y prior
• North Rhine Westphalia CPI +1.9% vs +2.0% y/y prior
• Baden Wuerttemberg CPI +2.5% vs +2.3% y/y prior

The readings are relatively steady as compared to January. This suggests that the national reading later should come in around expectations, roughly between 2.2% to 2.3%. That as compared to the reading in January of 2.3%.

This article was written by Justin Low at www.forexlive.com.

• Prior 11k
• Unemployment rate 6.2% vs 6.2% expected
• Prior 6.2%

German unemployment rose less than expected in February as the jobless rate holds steady at 6.2%. The labour office says that “the economic weakness remains visible in the labour market” as headwinds continue to persist in the industry sector especially.

This article was written by Justin Low at www.forexlive.com.

The pair is defended by the January low of 148.63 this week and has been consolidating in a bit of a range in between 149.00 to 150.00 mostly. But now we’re getting a jump to 150.40-50 levels and it’s not really owing to any major headline, at least not one that I can see. If anything, it appears to be a more technical one with the jump coinciding with the break of the 200-hour moving average (blue line) as seen above.

Amid the downtrend since mid-February, sellers have been holding on to a more bearish near-term bias in keeping price action below the key hourly moving averages. That momentum was broken somewhat yesterday but now we’re starting to see buyers make a bit of a play.

Is this where USD/JPY comes up for some air?

Well, I’m not all too convinced just yet. For one, the bond market needs to play ball and 10-year Treasury yields are down to 4.24% now and contesting a potential break below its own 200-day moving average. All else being equal, that’s a factor that should weigh on USD/JPY instead of underpin it.

So, while there is a spurt higher here in USD/JPY to start the session, it might not be one that stays the course. Besides the bond market, we also have to factor in month-end flows and the reaction to the US PCE price data later to get a better sense of the move we’re seeing.

This article was written by Justin Low at www.forexlive.com.

• Prior 101.6; revised to 103.0

The higher revision to the previous month sees the Swiss leading index fall in February. But overall, it’s still mostly trending sideways and that suggests a more tepid momentum in the economy since last year.

This article was written by Justin Low at www.forexlive.com.

• Prior +1.7%
• HICP +0.9% vs +1.2% y/y expected
• Prior +1.8%

The sharp slowdown in prices is largely to do with energy prices readjusting i.e. base effects. For some context, electricity prices rose rather sharply in February 2024. The added good news here is that service inflation is also seen easing, falling from 2.5% in January to 2.1% in February.

This article was written by Justin Low at www.forexlive.com.

No changes to the initial estimates as the French economy posts a marginal contraction at the end of last year, largely due to inventory changes i.e. trade. As a whole, French GDP posted a 1.1% growth in 2024 – matching that of 2023.

This article was written by Justin Low at www.forexlive.com.

IC Markets Global is committed to providing the best trading experience for our clients, and as part of this commitment, we are making important changes to the CHINA50 and XNGUSD instruments this weekend. These updates will involve transitioning to a new Liquidity Provider (LP), ensuring improved trading conditions and liquidity.

What You Need to Know

To facilitate a seamless transition, we will be applying Swaps/Financing adjustments on Friday. This will account for any Fair Value (Price) differences between the outgoing and incoming LPs. Additionally, the standard triple swap on CFDs, which normally takes place on Fridays, will also be included.

Key Updates and Implications:

• Compensation for Impacted Positions: Positions negatively affected by the Fair Value change will receive compensation through the swap.
• Adjustment for Benefiting Positions: Positions that gain from the Fair Value adjustment will be charged accordingly.
• No Net P/L Impact: These measures will ensure that your positions experience no net Profit/Loss impact due to the Fair Value change.

We encourage you to review your Pending, Stop Loss, and Take Profit orders and modify them if needed.

We appreciate your understanding and cooperation as we continue to enhance your trading experience. If you require further assistance, please do not hesitate to contact our support team.

Kind regards,

IC Markets Global

The post Important Update: CHINA50 and XNGUSD Changes This Weekend first appeared on IC Markets | Official Blog.