Investors are positioning for the possibility that Russia's war with Ukraine could soon end, with the prospect of a cease-fire already sparking shifts in the market.
Markets have been responding to improving chances for the three-year conflict to wind down since President Donald Trump said he spoke with Russia's leader, Vladimir Putin, last week about negotiating an end to the Ukraine war.
On Tuesday, US and Russian officials met in Saudi Arabia for the first time since 2022 for initial discussions aimed at ending the war, though neither side committed to an outcome and the talks did not include Ukraine or other European countries.
Trump, who promised on the campaign trail to end the war in 24 hours if he was elected, said he had a "long and hard" conversation with the Russian leader after landing Sunday in Florida on Air Force One. He added that he could meet with Putin "very soon" to discuss ending the war.
"We're moving along. We're trying to get a peace with Russia, Ukraine, and we're working very hard on it," the president said.
Here's how the potential for an end to the conflict is moving markets.
Russian stocks have rallied
The Moscow Exchange's Russia Index surged as high as 3,258 in the days following Trump's call with Putin. That's an 8% jump from where the index was at the start of the week and a 38% increase from the index's low in December.
US stocks rise to start the week
The S&P 500 rose Tuesday morning, with analysts and traders pointing to rising optimism that one of the major geopolitical overhangs for the market could be removed in 2025.
The benchmark index edged toward record highs in early trading after last week's stretch of gains. The S&P 500 is up about 4% year to date.
Russia's ruble gains
The value of Russia's ruble climbed against the greenback. The Russian currency traded at 92 against the US dollar on Tuesday, below a key psychological threshold of 100 versus the dollar.
The ruble has also gained more value since the start of the year, when it traded at around 113 against the dollar.
Betting markets shift amid peace talks
Bettors on platforms like Polymarket have rising expectations that the war will end this year. On Polymarket, the likelihood that Trump will broker a deal to end the Russia-Ukraine war within his first 90 days in office rose as high as 44% in the past week, up from 18% in January.
There's even more confidence in a cease-fire before the end of the year. On Tuesday, the chance that a resolution to the war will arrive before the end of 2025 rose to 73% on Polymarket, up from the 56% likelihood priced in during January.
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