Zelenskiy–Trump summit boosts markets ahead of a key Fed speech, with investors reacting positively to signs of potential geopolitical de-escalation. Global equities advanced modestly as confidence grew in a possible framework for dialogue between the U.S. and Ukraine that could ease long-standing tensions in Eastern Europe.

The STOXX 600 index gained 0.1%, reflecting optimism across European markets. However, the rally wasn’t uniform—defense stocks fell as investors adjusted to lower conflict-risk scenarios. Germany’s Rheinmetall dropped 3.2%, while Renk and Hensoldt declined nearly 2%, as expectations around sustained military spending softened.

In currency markets, the U.S. dollar index remained steady around 98.2, suggesting traders are hedging for policy clarity rather than volatility. With the Zelenskiy–Trump summit on the horizon, the dollar’s stability indicates cautious optimism, reinforced by muted movements in gold and Treasury yields.

U.S. futures reflected similar confidence. Contracts tied to the Dow, Nasdaq, and S&P 500 all ticked higher, as traders positioned for both geopolitical progress and Federal Reserve Chair Jerome Powell’s speech at Jackson Hole. The summit and Powell’s remarks now dominate the short-term risk landscape.

Meanwhile, oil prices remained broadly unchanged. Market participants appear undecided about whether peace discussions will lead to a significant shift in global energy dynamics. With sanctions, supply routes, and production agreements still in play, traders are holding positions rather than betting aggressively.

The phrase Zelenskiy–Trump summit boosts markets now anchors a market narrative focused on reduced geopolitical risk and cautious monetary positioning. Both elements are fueling a risk-on tilt, particularly in cyclicals and emerging markets.

Outlook:

Investors may consider exposure to cyclicals and industrials while moderating defense allocations.

Currency strategists should monitor cross-border flows for dollar pressure, especially if Powell strikes a dovish tone.

Traders should expect increased short-term volatility tied to policy language from both diplomatic and central bank arenas.

If the Zelenskiy–Trump summit results in a formal agreement or roadmap, markets could see a sustained rally into Q4—especially if dovish Fed rhetoric confirms rate cuts by year-end.