Markets React as Euro Surges on Ukraine Ceasefire Hopes and U.S. Trade Uncertainty

The financial markets experienced a rollercoaster ride on Wednesday, with the euro climbing to a five-month high following Ukraine’s acceptance of a U.S.-proposed 30-day ceasefire. Meanwhile, stock markets fluctuated due to ongoing uncertainty surrounding U.S. trade policies and fears of an economic slowdown.

Investor sentiment improved after the U.S. announced it would restore military aid and intelligence sharing to Ukraine, following Kyiv’s agreement to the ceasefire proposal. As a result, European equity futures surged, with a 0.8% jump, while FTSE futures edged up 0.3%.

The euro reached its highest level since October, peaking at $1.0947 in New York trading before stabilizing at $1.0913 during the Asian session. Russia’s rouble also made gains, hitting a seven-month high overnight, reflecting optimism surrounding potential de-escalation in the conflict.

Despite positive developments in Europe, stock markets remained highly volatile due to the uncertainty surrounding U.S. tariffs and economic concerns.

Wall Street’s S&P 500 came close to a technical correction—flirting with a 10% drop from February’s record high—before closing 0.8% lower after a turbulent session.

READ ALSO: Ukraine Backs U.S. Proposal for 30-Day Ceasefire, Agrees to Negotiations with Russia

The turmoil was exacerbated by President Donald Trump’s shifting stance on steel and aluminium tariffs. Initially, he threatened to double tariffs on Canadian imports to 50%, only to backtrack after Ontario suspended its plans for an electricity export surcharge.

This back-and-forth in policy has left investors uneasy, prompting a sharp sell-off in U.S. equities in recent weeks.

Across Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan posted a modest 0.2% gain. Markets in Hong Kong and China remained steady, while Japan’s Nikkei held its ground after hitting a near six-month low in the previous session.

READ ALSO: PSG Triumph Over Liverpool to Reach Champions League Quarter-Finals

In the currency markets, the dollar weakened, reflecting growing concerns about the U.S. economic outlook. Meanwhile, U.S. Treasury yields rallied as investors sought safe-haven assets. The yen, often a go-to currency in times of uncertainty, eased slightly from its five-month high, trading around 148 per dollar.

The unpredictability surrounding U.S. trade policy has left businesses struggling to make long-term decisions. Catriona Burns, lead portfolio manager at Wilson Asset Management in Australia, commented on the situation:

“Trump is clearly trying to rebalance the economy in America’s favor. But this initial phase, where he’s being aggressive, has created a highly dynamic environment. The uncertainty surrounding these tariffs is hindering decision-making, which could have short-term impacts on U.S. growth.”

Adding to investor anxiety, the travel sector took a hit after Delta Air Lines slashed its profit forecast by half. Competitors United Airlines and American Airlines also issued warnings about deteriorating financial results, citing falling government bookings and weaker demand.

Retail stocks were not spared either, as concerns about consumer spending weighed on the sector. Dick’s Sporting Goods saw its shares drop 5.7% following a weak earnings outlook, while Kohl’s Corporation suffered a staggering 24% plunge after reporting declining sales.