US stocks surged on Monday after former President Donald Trump said he had secured an extension of the temporary ceasefire in the Ukraine conflict. The S&P 500 climbed 1.8% while the Dow Jones Industrial Average rose 2%. The Nasdaq Composite added 2.5%, outperforming its peers. Trading volumes were high, with over 12 billion shares exchanged on major US exchanges. Analysts pointed to reduced geopolitical risk as the main driver behind the gains.
The announcement came after Trump met with European leaders in Brussels last week. He described the ceasefire extension as a step toward lasting peace but did not provide details on its duration or terms. European markets followed Wall Street’s lead, with the Euro Stoxx 50 up 1.5%. Oil prices dipped slightly as traders anticipated lower demand due to easing tensions.
Investors shifted focus from defense stocks to sectors expected to benefit from stability. Companies in technology and consumer goods led the advance, with Apple gaining 3% and Microsoft adding 2.2%. Safe-haven assets like gold and the US dollar weakened. The yield on the 10-year Treasury note fell to 4.15%, reflecting lower inflation expectations.
The Federal Reserve’s next policy meeting is scheduled for November 6. Traders now expect a smaller interest rate hike following the ceasefire news. Futures markets priced in a 70% chance of a 0.25% increase, down from 90% before the announcement. Economists warned that any prolonged conflict could still disrupt supply chains and inflation trends.
The ceasefire extension remains temporary, and its long-term impact depends on negotiations. For now, markets are pricing in optimism, but uncertainty lingers over whether the truce will hold.
Source: e24.no