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August 19, 2025 – 05:41

(Bloomberg) — Financial markets moved in narrow ranges, with global equities holding near record highs, after Donald Trump’s meeting with Ukraine’s president and European leaders ended with a call for a summit with Russia.

European equity-index futures gained 0.2% as the leaders of the US, Ukraine, Europe and NATO touted progress on peace talks to end the war in Ukraine. Oil dipped 0.4% as traders weighed the impact of the talks on supply of the commodity. Asian shares dipped 0.1% while stocks in mainland China stocks held near their decade-high level.

Contracts for US stocks fell 0.1% and Treasuries were steady after S&P Global Ratings affirmed its AA+ long-term rating for the US, as well as its A-1+ short-term rating. In Japan, sale of a 20-year government bond auction saw weaker demand that its 12-month average.

Markets were cautiously optimistic on the Ukraine peace process after Trump urged Vladimir Putin to begin planning a summit with Volodymyr Zelenskiy. Investors face a pivotal week as the Federal Reserve’s annual Economic Policy Symposium kicks off Thursday in Jackson Hole, Wyoming, potentially offering signals on the path of interest rates.

“Money is just waiting on the sidelines at the moment, until a fresh signal to move markets to fresh highs,” Nick Twidale, chief analyst at ATFX Global Markets in Sydney. “Investors were preparing for volatility after the talks but that has not eventuated and so they will now focus on central bank updates into the end of the week, with a huge focus on the Fed.”

Trump called Putin and urged the Russian leader to begin making plans for a summit with Zelenskiy, after meeting the Ukrainian president and European leaders at the White House on Monday.

The proposal — which Trump pitched as a one-on-one summit between Ukraine and Russia’s leaders that would be followed by a trilateral gathering involving all three — represented the latest turn in the US president’s push to broker a quick end to a conflict that has lasted over three years.

“The lack of market reaction may reflect low expectations for a resolution of the Russia-Ukraine war,” said Mingze Wu, a currency trader at StoneX in Singapore. “The world has been chugging along for the past two-plus years now, so peace in Europe may not do much, which aids this inertia in market bets.”

The markets are “laser-focused” on Jerome Powell’s speech on Friday, Wu said.

Powell is expected to unveil the Fed’s new policy framework — the strategy it’ll use to achieve its inflation and employment goals. Powell may also drop some hints about the Fed’s thinking ahead of its September policy meeting.

What Bloomberg Strategists say…

The peace process is likely to be a long one. A lower path for oil looms as a result, while equities and other assets may set aside geopolitical issues for the time being as they focus on the US monetary policy outlook.

— Garfield Reynolds, MLIV Team Leader.

Interest-rate swaps show a roughly 80% chance that the Fed will lower rates next month by 25 basis points, with two cuts fully priced in by the end of the year.

“For now, the market appears to be betting that signs of labor-market weakness will outweigh inflation risk in the Fed’s rate-cutting debate,” said Chris Larkin at E*Trade from Morgan Stanley.

In Japan, a 20-year government bond auction drew demand that was weaker than its 12-month average, reflecting investor caution about longer dated debt amid fiscal risks like higher government spending and tax cuts.

Elsewhere, Chinese equities held on to their gains. While the Shanghai Composite Index’s climb to a decade high on Monday has been partly fueled by cash-rich investors looking for better returns than bonds, their pace of positioning has been more measured than in previous equity surges, analysts said.

Meanwhile, S&P said the US can maintain its credit strength despite the fiscal hit of a recent spending bill, in part because tariff revenues will reduce the pain. S&P affirmed its credit rating for the world’s largest economy.

“Amid the rise in effective tariff rates, we expect meaningful tariff revenue to generally offset weaker fiscal outcomes that might otherwise be associated with the recent fiscal legislation, which contains both cuts and increases in tax and spending,” wrote analysts including Lisa Schineller in a note.

Corporate News:

Intel rose in after-hours trading after SoftBank Group Corp. agreed to buy $2 billion of Intel Corp. stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. Australian biotech giant CSL Ltd. said it will spin off its Seqirus vaccine business into a separately listed company as part of a restructuring that will reduce its workforce by as much as 15% and cut costs by around $500 million a year. Shein Group Ltd. has considered moving its base back to China in the hopes that it would help sway Beijing authorities to sign off on the fast-fashion retailer’s plans to go public in Hong Kong, Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 12:28 p.m. Tokyo time Japan’s Topix was little changed Australia’s S&P/ASX 200 fell 0.7% Hong Kong’s Hang Seng was little changed The Shanghai Composite rose 0.3% Euro Stoxx 50 futures rose 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1657 The Japanese yen was little changed at 147.77 per dollar The offshore yuan was little changed at 7.1859 per dollar Cryptocurrencies

Bitcoin fell 0.9% to $115,464.39 Ether fell 1.6% to $4,263.24 Bonds

The yield on 10-year Treasuries was little changed at 4.34% Japan’s 10-year yield advanced 1.5 basis points to 1.580% Australia’s 10-year yield advanced five basis points to 4.32% Commodities

West Texas Intermediate crude fell 0.5% to $63.13 a barrel Spot gold rose 0.3% to $3,341.07 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Rob Verdonck.

©2025 Bloomberg L.P.