Harshul Agarwal, 11/03/2025
Disclaimer: This information is valid as of the 4th of March, and may not incorporate changes which have occurred between the two parties since then
On the 28th of February 2025, between President Trump and President Volodymyr Zelenskyy sent shockwaves through the market, with significant fluctuations on equities. The abrupt end to the meeting, peak geo-political tensions, and suspension of military aid to Ukraine all contributed towards fuelling market uncertainty, in particular sectors that rely on stability. This article focuses on how the meeting influenced the financial markets across the world and what follows in the future.
Global equity markets responded aggressively to the news of the hostile Trump-Zelenskyy meeting as US indices including the Dow Jones, S&P 500 experienced high volatility as institutions weighed upon the potential economic loss of the minerals deal fallout and the geopolitical consequences of the dispute. Defense sector stock Raytheon faced downward pressures upon the news of suspended military aid to Ukraine, as reduced US assistance in the east would result in reduced future weaponry sales exported to Europe. Technology stocks and broader growth sectors on the other hand broke their downward spiral streak as optimism grew for government spending to shift towards domestic infrastructure and industrial projects.
Commodities such as Oil and agricultural products also reacted aggressively as Oil prices sharply rose as the minerals deal fallout, given Ukraine’s mineral-rich land was no longer in question of being acquired. The land is supposedly rich in commodities such as lithium, titanium, uranium as well as Crude Oil, thus establishing supply chain concerns. Furthermore, the tense meeting led investors to feeling Russia to be in a power position, and given their status as the largest exporters of oil, could further lead to more supply chain security.
Another market that saw immediate shifts in response to the geopolitical turmoil was the foreign exchange market. The U.S Dollar strengthened as a result of the tariffs being announced to continue being implemented on Canada and Export, but also a result of reduced economic involvement between US and Ukraine. Furthermore the British Pound and the Euro exhibited declines against the US dollar as concerns grew over Europe's ability to support Ukraine without America's involvement within the peace negotiations.
Bond markets further reflected a response for safe investors as U.S Treasury yields fell as investors had greater demand for risk-averse assets. Similarly, gold prices rose sharply, reinforcing the perception of high demand for low-risk assets as a result of great geo-political turmoil and uncertainty.
Looking ahead, the Trump-Zelenskyy meeting has shaken investors and have had widespread and immediate effects on the market. Stock volatility, commodity price spikes and currency fluctuations and greater risk-aversion from institutions all reflect the consequences of geo-political instability. As the situation develops, market participants will remain cautious, and will adjust their strategy based on the broader geo-political landscape.
P.S: As I finish writing this article, Zelenskyy has announced it is ready to come to peace in the war with Russia, and is not only willing to negotiate, but is urging President Trump to be at the center of Negotiations between Putin and Zelenskyy. This has immediately led to increases in the futures of market indications like the Dow Jones and S&P 500, as investors wait for a response from President Trump.
Sources:
McArthur, T. (2025). Zelensky: Ukraine still ‘ready’ to sign minerals deal with Trump. [online] 2 Mar. Available at: https://www.bbc.com/news/articles/c8j0ggm3mdwo. Reuters Staff (2025). Trump-Zelenskiy clash adds to market nervousness.
Reuters. [online] 28 Feb. Available at: https://www.reuters.com/markets/view-trump-zelenskiy-clash-adds-market-nervousness-2025-02-28/.
Cramer, J. (2025). What Friday’s White House clash means for stocks — and for my investing strategy. [online] CNBC. Available at: https://www.cnbc.com/2025/03/02/what-the-white-house-clash-means-for-stocks-and-my-inv esting-strategy.html [Accessed 4 Mar. 2025].
Root, A. (2025). Defense Stocks Wobble Then Recover After Contentious Exchange Between Trump, Vance, and Zelensky. [online] barrons. Available at: https://www.barrons.com/articles/lockheed-martin-defense-stock-trump-vance-zelensky-bbed d7de [Accessed 4 Mar. 2025].
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