We may still be far from seeing a deal that Ukraine, Russia, and the US agree on, but that hasn’t stopped traders from betting on the rising likelihood of a peace agreement.
Moscow released American prisoner Marc Fogel in a prisoner swap on Tuesday, one sign that the two geopolitical powers were easing tensions. Then, on Wednesday, President Trump posted on Truth Social that he and Russian President Vladimir Putin had a “lengthy and productive” phone discussion, in which the two agreed to begin talks to end the war.
How to invest in a peace agreement
Markets immediately reacted to the news. The Euro rallied against the dollar, while European stocks rose—the Euro Stoxx 50 index climbed 1.75% today. Oil prices dropped on the report, given that peace in the region would lessen the strain on oil supply, before recovering later in the day.
While anyone trading today based on a currently non-existent peace agreement is likely getting ahead of themselves, JPMorgan analysts laid out how different sectors of the market could react when the war does end.
“In case of a ceasefire, Chemicals, Fertilisers and Construction would be the top sector beneficiaries vs Energy, Utilities and Defense on the other side,” JPMorgan Head of Equity Research Sophie Warrick wrote in a Wednesday note.
The bottom line: This is a classic buy the rumor, sell the news moment. And if you haven’t already noticed, Trump’s strategy of throwing things at the wall and seeing what sticks often results in some stark policy back and forth.—LB
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