Progress in Trump-Zelenskyy Talks Could Boost Appetite for Higher-Risk Investments

The gathering in Washington on Monday has the potential to reshape global markets. President Donald Trump is hosting Ukraine’s Volodymyr Zelenskyy at the White House, with Germany’s Friedrich Merz, France’s Emmanuel Macron and Britain’s Keir Starmer also present.

Their talks will be watched not just for political symbolism, but for what they signal to investors searching for direction.

My view is that even incremental progress could spark a meaningful rally. For months, markets have been conditioned to expect confrontation. A gesture toward compromise would be enough to tip the balance. This is how markets work: they respond to changes in probabilities, not just outcomes.

We’ve already seen early signs of positioning. Futures in Europe and the US are nudging higher, while Asian equities have delivered stronger moves — with India at a three-month high and Shanghai brushing decade-long records. Defensive assets, from Treasuries to gold, are still drawing flows, but this reflects investors hedging against disappointment rather than conviction that talks will fail.

The weight of sidelined cash is striking. Fund managers remain cautious, with equity allocations subdued and liquidity levels high.

If the White House signals even the faintest progress, that capital will be deployed rapidly. Momentum would build as managers rush not to be left behind.

The asset implications are broad. Gold and Treasuries would likely ease as safe-haven demand fades. Oil could settle into a more predictable range if fears of sanctions or supply disruption recede. The dollar would soften against higher-yielding currencies.

Digital assets, including Bitcoin, which dipped earlier in the week, would probably find renewed strength. In recent months, crypto has traded as a barometer of risk appetite, and improved confidence in dialogue would feed directly into prices.

All of this comes on the eve of Jackson Hole. Jerome Powell is expected to set the stage for a September rate cut, but the reality is that monetary policy is already well-anticipated. It is geopolitics that could set the tempo for markets in the weeks ahead.

Investors do not need a perfect settlement. They need confirmation that diplomacy still matters. One signal from Washington can recalibrate portfolios across equities, bonds, commodities and crypto.

If this meeting shifts the tone, however slightly, it could mark more than a short-term rally. It could open the door to a sustained repositioning by global investors who have been waiting, frozen, for clarity. That is why the stakes for markets this week are so high.