Keys of the day: Trump beat Powell, Russia advances in eastern Ukraine and Europe says no to the US
Wall Street lives a week of euphoria, with stock indices reaching new historical maximums driven by stable inflation data that feed the hopes of an imminent cut of interest rates by the Federal Reserve. However, this financial optimism contrasts with a growing geopolitical tension, with all the looks on the crucial summit that will gather on Friday in Alaska to the US President, Donald Trump, and his Russian counterpart, Vladimir Putin, to discuss the future of the war in Ukraine.
The market engine this week has been the US inflation fact, which remained at 2.7%, a level that the market interprets as a green signal for the Federal Reserve to lower interest rates at its September meeting. This expectation has unleashed a rally that pushes actions into record territory.
“The market understands in a clear and obvious way that there will be a movement of loss of interest rates,” said an analyst, highlighting that this is the “fundamental key” behind the current bullish impulse.
The shadow of geopolitics
While the economy seems to offer a respite, geopolitics threatens to cloud the panorama. Only two days are missing for the meeting in Alaska, a meeting that could redefine the conflict in Ukraine. According to reports, Putin goes to the summit “confident in winning the war”, which has lit alarms in Europe.
The Ukrainian president, Volodimir Zelenski, has described the meeting as a “personal victory of Vladimir Putin”, and has expressed his fear that a peace be negotiated behind his country. Recently, Zelenski confirmed that Russian forces have intensified their progress in eastern Ukraine, in a movement that seems designed to strengthen Moscow's position for negotiations.
In response, European leaders issued a joint statement urging the “territorial integrity of Ukraine” to be respected. The main concern in the European capitals is that Trump, in his eagerness to close an agreement, can yield to the Russian demands and “betray Ukraine” in exchange for a cessation to the fire that consolidates the territorial profits of Russia.
A shock of allies on the horizon
The summit is emerging as a potential friction point between the United States and its European allies. EU leaders are expected to press Trump to maintain a firm line, but the possibility of a bilateral agreement that ignores kyiv's interests remains on the table.
The scenario that is considered is an attempt to “freeze” the conflict, giving territories in exchange for peace, a proposal that Ukraine and much of Europe reject flat.
Other keys of the day
In other news, the debate on inflation continues. Although the general data remains stable, the underlying inflation (which excludes food and energy) has risen slightly 2.9% to 3.1%. However, the fall in fuel prices has counteracted this increase, validating the position of the Trump administration that tariffs would not cause a price escalation.
Meanwhile, the tension increases in the Middle East, where the United Kingdom, France and Germany have warned the UN that are willing to reimpose sanctions to Iran if negotiations on its nuclear program do not resume.
The global scenario, therefore, presents a marked duality: on the one hand, the euphoria of markets that discount a favorable economic environment; on the other, uncertainty before a geopolitical encounter that could have lasting consequences for international security. The result of Friday will be key to determining which narrative will prevail.
Good morning, we approach on Friday, we will make special program here on television businesses. Good business.
