On Sunday, Ukrainian President Volodymyr Zelensky met with U.S. President Donald Trump in Florida. After the meeting, the White House stated that approximately 95% of the conflict-resolution issues were agreed upon, leaving only one or two points still up for debate. Trump claimed the negotiations are moving “in the right direction,” including on Donbas, and hinted that a deal could happen in a few weeks, if luck were on their side.
Did gold prices fall as a result, taking other metals down with it?
Perhaps, but it is worth noting that the market was already overheated, so the correction was overdue.
The fact that safe-haven assets did not fall as much in response to geopolitical news also suggests that the Russian stock market did not experience a rebound, but rather a momentary upside. No wonder: time and again, hopes for progress arise, but they quickly fade, and tensions return to normal. A good example is Putin's meeting with Trump in Alaska: despite numerous talks and photos, the war continued for months afterward.
What about the main “beneficiaries” of the conflict: defense companies?
Stocks of Lockheed Martin, BAE Systems, Rolls-Royce, Leonardo, Thales Group, Dassault Aviation, Rheinmetall, Northrop Grumman, Boeing, and others are still in a downtrend, but in recent days they’ve bounced back. The market seems to be waiting for the conflict to end, but remains skeptical.
Why?
Because key positions, especially on territorial issues, remain far apart. In an interview with Fox News, President Zelensky stated that withdrawing from Donbas would pose a significant risk to Ukraine, unacceptable to its people, and that any referendum there would not yield positive results. If that stance holds, the war could drag on.
But suppose circumstances evolve in such a way that peace is achieved between the two countries. Who would benefit?
If sanctions on Russia are lifted, companies that previously worked directly with the country could make a significant comeback. Energy and oil & gas players could resume equipment and service deliveries, while big oil and gas projects could expand. Aviation companies could sell planes, engines, and navigation systems; banks could ramp up lending, investments, and international transfers. In industry and agriculture, construction and farming machinery, industrial turbines, and generators could start moving again. IT companies could resume providing corporate software, cloud services, electronics, and networking equipment.
Therefore, overall, the S&P 500 could receive a boost, but for now, the market's reaction to the negotiations remains cautious.