Trump and Zelenskyy's oval office clash shakes markets, but index rebalancing helps stocks rebound Friday
On Friday, stocks rose, ending a volatile week and a losing month for major indexes, according to CNBC.
The S&P 500 rose 1.59 percent to close at 5,954.50, while the Dow Jones Industrial Average gained 601.41 points, or 1.39 percent, reaching 43,840.91.
The Nasdaq Composite advanced 1.63 percent, settling at 18,847.28.
Markets briefly turned negative during Friday’s session after US President Donald Trump and Ukraine President Volodymyr Zelenskyy clashed in the Oval Office.
The exchange raised concerns about geopolitical risks, particularly as investors had hoped their meeting—focused on a potential Ukraine mineral rights deal for the US—would signal progress toward ending the war with Russia.
“You either make a deal or we’re out,” Trump told Zelenskyy. “You’re gambling with World War III.”
Later, Trump wrote on Truth Social that Zelenskyy “is not ready for peace if America is involved,” adding, “He can come back when he is ready for peace.”
Despite the market dip, stocks rebounded into Friday’s close, partly due to index rebalancing and technical buying.
The New York Stock Exchange saw a significant imbalance in buy-side market-on-close orders, contributing to the late-session rally.
For February, the Nasdaq dropped nearly 4 percent, with a 3.5 percent decline this week marking its worst month since April 2024.
The S&P 500 fell 1 percent for the week and 1.4 percent for the month. The Dow outperformed, rising 1 percent during the week but declining 1.6 percent for the month.
The confrontation between Trump and Zelenskyy, alongside US Vice President JD Vance, caused further market turbulence.
The Cboe Volatility Index, which tracks investor sentiment, surged to 22.40, its highest level since January 27.
Investor Jim Lebenthal of Cerity Partners voiced concerns about the situation. “I’m disturbed by what I just saw,” he said on CNBC’s Halftime Report.
“If the policies in foreign affairs are now to empower Russia and Vladimir Putin, I don’t think that’s good for the stock market. I don’t think that’s good for the global economy. I find it hard to make a case otherwise.”
Larry Tentarelli, founder and CEO of the Blue Chip Daily Trend Report, pointed to market sensitivity.
“This is still a very news-driven market and any hints of escalation, or no resolution with Russia [and] Ukraine, should be expected to add to volatility, in an already volatile week,” he said.
Tentarelli added that higher volatility would likely continue “at any time, until resolved.”
Investors also reacted to Trump’s tariff proposals and recent economic reports indicating potential challenges.
On Thursday, Nvidia shares dropped 8.5 percent following its earnings report, further dampening sentiment.
Meanwhile, the Atlanta Fed’s GDP Now measure revised its first-quarter growth forecast downward, projecting a 1.5 percent decline.
