Analysis of Investment Impacts of the Russia-Ukraine Peace Process on Energy, Defense, and European Stock Markets

Based on the latest market data [0] and online search results [1][2][3], I will systematically analyze the potential investment impacts of the Russia-Ukraine peace process on relevant markets. This analysis focuses on three core sectors: the energy market, defense stocks, and European stock markets.

After meeting at Mar-a-Lago on December 28, 2025, Donald Trump and Volodymyr Zelensky announced that the two sides had reached approximately 95% consensus on the ‘20-Point Peace Plan’ [1][2]. Key contents include:

• Confirmation of Ukraine’s sovereignty and a non-aggression pact
• Ukraine maintaining an 800,000-strong military
• Security guarantees from the U.S. and NATO
• Ukraine continuing to advance its EU accession process

: Control over eastern Ukrainian territories and the Zaporizhzhia Nuclear Power Plant [1][2].

According to brokerage API data [0], as of the end of December 2025:

• Brent Crude
  : Approximately $60.64/barrel, down 17.82% annually
• WTI Crude
  : Approximately $56.89/barrel, down 19.41% annually
• European Natural Gas (TTF)
  : Approximately 28.07 EUR/MWh, down 41.25% year-on-year [3]

Energy Sector ETF Performance:

• XLE (Energy Select Sector SPDR ETF)
  : Down 0.83% in the past 60 days with low volatility (1.11%) [0]
• UNG (Natural Gas ETF)
  : Down 6.29% in the past 60 days with high volatility (3.56%) [0]

:

• Bearish
  : If substantial progress is made in the peace agreement, geopolitical risk premiums may fade quickly, putting downward pressure on oil prices
• Bullish
  : Reduce supply disruption risks and stabilize energy trade flows

:

• Russia’s Energy Return to Market
  : If sanctions are relaxed, Russia’s crude oil and natural gas exports may increase, putting downward pressure on global supply
• Accelerated Transformation of European Energy Structure
  : The EU plans to completely stop importing energy from Russia by 2028 [3], a strategy that will not change due to the peace process

:

• European natural gas prices may remain relatively low; TTF has plummeted from a high of 345 EUR/MWh in 2022 to approximately 28 EUR currently [3]
• However, structural supply security issues persist; EU gas storage filling rate reaches 83% [3]

:

• Short-Term
  : Adopt a cautious attitude toward energy stocks, especially pure oil price-sensitive stocks
• Long-Term
  : Focus on U.S. LNG exporters and European energy infrastructure companies, which will benefit from Europe’s energy diversification strategy

[0]:

• Lockheed Martin (LMT)
  : $483.03, P/E 26.88, market cap $113 billion, Q3 2025 order backlog exceeding $170 billion
• Raytheon Technologies (RTX)
  : $185.17, P/E 38.02, market cap $247.9 billion
• Northrop Grumman (NOC)
  : $577.37, P/E 20.79, market cap $82.4 billion

:

• Rheinmetall
  : Up nearly 200% [4]
• Leonardo
  : Up over 100% [4]
• BAE Systems
  : Up over 60% [4]
• FTSE European Aerospace & Defense Index up 72.66% year-to-date [4]

:

• Bearish
  : The signing of a peace agreement may trigger a short-term correction in defense stocks as the market re-evaluates long-term demand
• Limited Bullish
  : Even if the conflict cools down, the trend of increased European defense spending has been established and will not reverse immediately

:

• Sustained Structural Demand
  :
  • European defense investment reached 381 billion EUR in 2025, accounting for 2.1% of GDP, exceeding NATO’s 2% target for the first time [4]
  • The NATO Foreign Ministers’ Meeting confirmed a feasible path to achieve 5% GDP defense spending by 2035 [4]
  • The EU’s 150 billion EUR SAFE instrument requires 65% of defense procurement to be conducted within Europe [4]

• Long-Term Order Backlog
  :
  • Revenue of the world’s top 100 arms dealers hit a record high in 2024 [3]
  • European arms dealers’ sales increased by 13% year-on-year, while U.S. defense companies’ revenue grew by 3.8% [3]

:

• Demand Foundation Will Not Disappear
  : Even if the Russia-Ukraine conflict cools down, other geopolitical risks such as NATO expansion and Indo-Pacific tensions remain
• Continued Defense Modernization
  : Long-term projects such as F-35 fighter jets, hypersonic missiles, and autonomous systems continue to advance
• European Strategic Autonomy
  : The EU’s strategy to reduce reliance on U.S. military technology will not change due to Russia-Ukraine peace

:

• Short-Term
  : Focus on potential correction opportunities; progress in the peace agreement may bring bargain-hunting opportunities
• Mid-Term
  : Focus on leading companies with long-term order backlogs and diversified revenue sources
• Long-Term
  : European defense companies may still have growth potential, but caution is needed as valuations have risen sharply

• Euro Stoxx 50 Index
  : Up 4.28% in the past 60 days [0]
• French CAC 40 Index
  : Slightly up 0.97% in the past 60 days [0]
• European stock markets showed relatively stable performance overall in 2025

:

• Significant Bullish
  : A peace agreement will significantly reduce the geopolitical risk premium in Europe
• Improved Economic Confidence
  : Reduce uncertainty, which is beneficial to business investment and consumer confidence

:

• Decline in Energy Costs
  : Natural gas prices have plummeted 41% from the 2022 high [3], and corporate energy cost pressure continues to ease
• Recovery of Trade Channels
  : The Black Sea Grain Corridor and trade routes may reopen, benefiting agriculture and logistics industries
• Reconstruction Demand
  : Ukraine’s reconstruction may create new business opportunities, especially for construction, engineering, and infrastructure companies

:

• Structural Challenges Persist
  : Europe faces structural issues such as aging workforce, digital lag, and lack of innovation
• Fiscal Pressure
  : High defense spending (currently 2.1% of GDP) may squeeze other public investments
• Political Risks
  : There are divisions within the EU on supporting Ukraine, and the influence of far-right parties is rising [3]

:

• Short-Term
  : Europe may see a recovery in risk appetite; bullish on cyclical sectors
• Mid-Term
  : Focus on industries benefiting from lower energy costs and Ukraine reconstruction concept stocks
• Long-Term
  : Adopt a cautiously optimistic attitude toward Europe overall; need to select individual stocks and industries carefully

:

1. European Cyclical Stocks
   : Banks, automobiles, luxury goods, and other sectors benefiting from economic recovery
2. Ukraine Reconstruction Concept Stocks
   : Construction, engineering, and infrastructure companies
3. U.S. LNG Exporters
   : Benefit from the long-term trend of European energy diversification

:

1. U.S. Defense Stocks
   : Valuations are reasonable but may have short-term volatility; focus on companies with strong order backlogs and cash flow
2. European Blue-Chip Stocks
   : Select companies with strong fundamentals that benefit from lower energy costs

:

1. Pure Oil Price-Sensitive Energy Stocks
   : The peace process may suppress oil prices
2. High-Valuation European Defense Stocks
   : Although the long-term trend is positive, short-term overvaluation risks correction

1. Uncertainty of Peace Agreement
   : Key disputes such as territorial issues may still break down
2. Risk of Geopolitical Escalation
   : Negotiation failure may lead to conflict escalation
3. Overreaction of Market
   : Short-term may see ‘buy the rumor, sell the fact’ volatility
4. Other Geopolitical Risks
   : Risks in other hotspots such as the Middle East and Taiwan Strait remain

• Peace Talk Progress
  : Focus on negotiations over territorial issues and nuclear power plant control
• Energy Prices
  : Key ranges: Brent crude $60-70/barrel, TTF natural gas 25-35 EUR/MWh
• Defense Orders
  : Monitor quarterly orders and backlogs of U.S. and European defense companies
• European Economic Data
  : PMI, consumer confidence, corporate investment, etc.

If the Russia-Ukraine peace process succeeds, it will have far-reaching impacts on global financial markets.

Investors should remain flexible, dynamically adjust allocations based on negotiation progress, and focus on structural opportunities rather than short-term volatility.

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[0] Jinling API Data - Real-time stock quotes, historical price data, market index data (as of December 28, 2025)

[1] Deutsche Welle - “Zelensky Announces New 20-Point Peace Proposal: What Disputes Remain?” (December 24, 2025) https://www.dw.com/zh/泽连斯基公布新版20点和平提案-还有哪些分歧未解/a-75297077

[2] Xinhua News Agency - “Trump: ‘20-Point Peace Plan’ 95% Agreed” (December 28, 2025) http://www.news.cn/world/20251229/9fe407ac42dc4abea94870764d5bda01/c.html

[3] Xinhua News Agency - “International Observation | Huge Arms Sales Highlight Global Security Deficit” (December 1, 2025) http://www.news.cn/world/20251201/a1b3253787a74db58c67b9389e20f8ea/c.html

[4] VisionWave Holdings via Newswire - “Sovereign Defense Boom: The €381 Billion Shift to Local Military Tech” (December 24, 2025) https://www.newswire.ca/news-releases/sovereign-defense-boom-the-eur381-billion-shift-to-local-military-tech-815927141.html

[5] CNBC - “Zelenskyy meets Trump in Florida for talks on Ukraine peace plan” (December 28, 2025) https://www.cnbc.com/2025/12/28/zelenskyy-to-meet-trump-in-florida-for-talks-on-ukraine-peace-plan.html

[6] Trading Economics - “EU Natural Gas - Price - Chart - Historical Data” (December 26, 2025) https://tradingeconomics.com/commodity/eu-natural-gas

[7] Trading Economics - “Crude Oil | 1983-2025 Data | 2026-2027 Forecast” (December 28, 2025) https://zh.tradingeconomics.com/commodity/crude-oil

[8] LSEG (Formerly Refinitiv) - “How to gain index traction in defence” (Data as of July 31, 2025) https://www.lseg.com/en/insights/ftse-russell/how-to-gain-index-traction-in-defence

[9] RFI French International Radio - “Europe Today” (December 2025) https://www.rfi.fr/cn/专栏检索/今日欧洲/podcast

[10] Futu News - “A ‘Ticking Time Bomb’ Beneath Prosperity!盘点2026年还需小心的十大风险” https://news.futunn.com/hk/post/66661770/a-ticking-time-bomb-beneath-the-prosperity-a-review-of

[11] GO Markets - “Impact of Red Sea Tensions on Maritime Transport” (January 15, 2024) https://www.gomarkets.com/zh-au/articles/hong-hai-jin-zhang-ju-shi-dui-hai-yun-de-ying-xiang