The latest meeting between Donald Trump and Volodymyr Zelensky was expected to clarify Ukraine’s future, but instead, it ignited a firestorm of uncertainty across global markets. Investors, already jittery over rising trade tensions and economic slowdowns, were greeted with yet another bout of unpredictability. The result? A sharp sell-off in equities, increased volatility in interest rates, and a growing sense that the global economy is teetering on the edge of a major shift.

For weeks, investors had basked in post-election optimism, betting on Trump’s economic policies to fuel another stock market rally. However, reality has a way of catching up, and the Trump-Zelensky confrontation at the White House—where the two leaders publicly disagreed over military aid and trade deals—sent shockwaves through financial markets.
The S&P 500, which had been riding high, has now posted back-to-back weekly declines, with four out of the last five weeks ending in the red. The index flirted with erasing all gains from the post-election rally, closing at 5,954.50 on Friday, a sharp drop from its recent peak of 6,144.15. The psychological support level of 5,782.76—the election-day close—is now in play, and if breached, it could trigger a further wave of selling as traders demand reassurances from policymakers.

It’s not just equities that are feeling the impact. Bond markets are reacting sharply, with traders adjusting their bets on Federal Reserve policy. The Trump-Zelensky fallout has increased uncertainty over global security, leading investors to pile into government bonds as a safe haven.
At the same time, Trump’s trade war threats are complicating the Fed’s strategy. If tariffs push inflation higher, the central bank may hold off on interest rate cuts, dashing investors’ hopes for lower borrowing costs in 2025. But if trade tensions choke growth, the Fed could be forced into an emergency rate cut—something markets are struggling to price in given the administration’s unpredictability.

Zelensky left Washington without security guarantees, and Trump told him to “come back when you’re ready for peace.” Now, Kyiv faces the terrifying prospect of being cut loose by its most powerful ally. Meanwhile, Europe is caught in an impossible dilemma: brace for a larger role in Ukraine’s defence or accept a deal dictated by Trump—one that might ultimately serve Moscow’s interests. If Europe had thought its role in Ukraine was already challenging, it would have become infinitely worse. With the U.S. abandoning its leadership role, European governments must decide whether to step up militarily or accept a deal shaped by Washington and Moscow.
This isn’t just about Ukraine. The Trump administration’s approach to conflict resolution—dictate terms, disregard alliances, and pressure weaker players into submission—has profound global implications.
Trump has already hinted that his next geopolitical “deal” could involve China and Taiwan—raising fears that his transactional approach to diplomacy could see Taipei thrown under the bus in exchange for trade concessions. If Ukraine is a test case, the world should brace itself for a future where U.S. allies are expendable bargaining chips.
For now, though, one thing is certain: Trump’s meeting with Zelensky was not just a diplomatic failure—it was a full-scale geopolitical rupture. Europe must now decide whether it has the political will to stand up to Moscow and Washington. If not, the future of Ukraine—and perhaps even the continent—will be decided in backroom deals between Trump and Putin.

March historically is one of the most volatile months in post-election years, so traders are bracing for more turbulence. If history is any guide, the so-called “triple witching” event—where futures and options contracts expire simultaneously—could amplify market swings and add to the current instability.
At this point, Trump’s unpredictability is the biggest risk factor in global markets. Will he escalate the trade war? Will he patch things up with Zelensky? Will he throw markets another curveball with a fresh policy shock? The answers remain unclear, and until more certainty is gained, investors are left navigating the fog of economic chaos.
One thing is sure—the Trump presidency has always been a rollercoaster ride for financial markets, and this latest episode is no exception. Anyone’s guess is whether it ends in a smooth landing or another freefall.