President Donald Trump and Russian President Vladimir Putin ended their summit Friday without an agreement. The oil, gold and defense markets watched closely for signs of a truce.
The two leaders met at Alaska's largest military base in the latest attempt by Trump to end the 3 1/2-year war. It's been one of his most frustrated foreign-policy goals. Both Trump and Putin called their meeting "productive," but acknowledged it stopped short of a deal.
The summit ended with no clear next steps and far from a cease-fire that Ukraine, the U.S. and European leaders had sought.
Trump met with European Leaders and Zelenskyy by videoconference Wednesday and agreed on red lines ahead of Friday's meeting. Participants told The Wall Street Journal the meeting was constructive. Trump said Ukraine must discuss territorial issues directly with Russia, said German Chancellor Friedrich Merz.
Trump said he hoped his meeting with Putin sets the stage for a trilateral meeting with Putin and Zelenskyy. The U.S. president had threatened Russia with "very severe consequences" if Putin refused a cease-fire. With that goal elusive after Friday, markets could react when they open Monday.
"Russia wants Crimea and Eastern Ukraine to be part of Russia officially, so it is possible the meeting may be a failure (Trump put odds of 25% failure) if Putin does not agree to a cease-fire," Louis Navellier, founder and chief investment officer of Navellier & Associates, told IBD.
Bottom line, Navellier added in written comments, if a cease-fire is reached, the stock market could rally on a potential "peace dividend." Navellier expects gold prices to remain firm, although mainly focused on central banks around the world.
Trump-Putin Summit's Calculus
Thierry Wizman, Global FX and rates strategist at Macquarie Group, says the economics of continued fighting could motivate Putin to strike a peace deal. Russia could face stronger sanctions on its oil exports, and the U.S. seems willing to set aside friendly relations with India over its purchase of Russian crude.
"That may be the signal needed to help sway Putin toward a deal," Wizman said in a note to clients.
Other factors that may cause Putin to pause the war: Despite some military advantages gained since the early spring, Russia doesn't have a conclusive edge. Further territorial gains may come harder if the U.S. recommits to selling arms to Ukraine.
Polymarket, a trading platform for world events, has the odds of a Russia-Ukraine ceasefire at 35%. The odds picked up from about 20% over the past week, after the Trump-Putin summit was set.
Trump-Putin Summit And Europe
Wizman notes that the mere chance of a cease-fire helped European stocks rally last week, while European defense stocks slid. Peace or cease-fire prospects also weakened geopolitical safe havens last week, such as the Swiss franc and the Japanese yen. The euro saw more demand. Oil prices also eased.
An end to hostilities would likely improve the euro. It would act as a sentiment boost due to reduced uncertainty and lessening the threat of the war spreading.
See The Latest Updates To IBD Watchlists
"It could also help de-risk Euro area growth, through lower energy prices and more secure energy sources," the strategist added. "Yet one counterpoint to this 'peace' narrative for Europe is that the prospect of European growth and reinflation may have also been boosted by the war, since the conflict energized new commitments to increase defense expenditure and associated infrastructure expenditure in Europe."
Trump-Putin Summit And Commodities
In regular trading Friday, commodities and defense stocks were steady as Trump and Putin shook hands and rode together for a meeting around 3:30 p.m. ET.
West Texas intermediate crude fell 1.8% to $62.80 a barrel Friday, still lagging at its lowest level since early June. United States Oil Fund, an ETF that tracks crude prices, is slipping below the 200-day moving average. It was little changed in after-hours trading Friday.
Any hawkish news from the summit regarding the U.S. stance toward India is likely to pressure oil prices higher.
The price of gold remains near all-time highs, indicating no panic among investors. Gold for August delivery was near $3,336 an ounce Friday afternoon. Gold's 3% decline for the week was its worst since mid-May, according to Dow Jones Market Data.
SPDR Gold Shares was flat also, trading in a flat base and near the 50-day moving average. It rose modestly in extended trading Friday night.
The iShares U.S. Aerospace & Defense ETF has been trading tightly around record highs. However, some leading stocks such as Germany's Rheinmetall, BAE Systems and AeroVironment have been pulling back.
