Broken Deal, Big Consequences: How ETFs And Stocks Will React

A high-stakes deal that could have reshaped global supply chains has crumbled. The negotiations between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy were meant to secure a partnership granting the US priority access to Ukraine's vast reserves of critical minerals – resources vital for military technology, electric vehicles (EVs) and advanced electronics.

However, the talks unraveled over security concerns and shifting priorities, leaving both nations scrambling for alternatives. Now, the fallout is poised to send ripples through markets, affecting stocks and ETFs linked to these key industries. Investors should closely monitor the funds and equities most exposed to this disruption.

Also Read: Zelenskyy Says ‘Not Sure’ He Did Something Bad After Public Spat With Trump, JD Vance: ‘We Have To Be Very Honest And Direct’

ETFs In The Spotlight

With the deal off the table, ETFs tracking rare earth minerals, defense and EV industries could see increased volatility:

VanEck Rare Earth/Strategic Metals ETF REMX: Holds stocks involved in rare earth mining and processing, sectors now facing renewed uncertainty. Pilbara Minerals Ltd AU and Arcadium Lithium Plc ALTM are among its top holdings.

Global X Lithium & Battery Tech ETF LIT: Focuses on lithium and battery-related companies, which depend on stable mineral supplies. The fund has allocated its assets to companies like Mineral Resources, Tesla TSLA and Albemarle ALB.

iShares US Aerospace & Defense ETF ITA: Tracks major defense contractors like Raytheon Co RTX, Lockheed Martin Corp LMT and Northrop Grumman Corp. NOC, that may face cost pressures due to supply chain disruptions.

What Was At Stake?

The abandoned agreement would have given the US priority access to Ukraine's reserves of critical minerals essential for military technology, EVs and advanced electronics. In return, Ukraine expected a financial boost, with 50% of state-owned mineral revenues going into an investment fund for economic recovery. However, without US security guarantees, Ukraine hesitated to finalize the deal, ultimately leading to its collapse.

With no agreement in place, both the US and Ukraine face economic and strategic setbacks. The US remains reliant on China for rare earth processing, while Ukraine may now seek alternative partnerships—potentially with China or European nations.

Also Read: Mark Cuban Surprisingly ‘Loves’ The Trump Administration’s Push For Ukrainian Rare Minerals—Here’s Why He Thinks It’s Good For Both Sides

US Defense And Tech Stocks

The US defense and tech industries are major consumers of rare earth minerals. Companies like Lockheed Martin, Northrop Grumman and Raytheon Technologies rely on these materials for advanced weaponry and aerospace systems. The lack of a stable mineral supply chain outside China could make sourcing components more expensive, potentially affecting these stocks.

Semiconductor giants like NVIDIA NVDA, Advanced Micro Devices AMD, and Intel INTC could also see cost pressures, as rare earth elements are crucial for chip production. If US companies must continue depending on China for processing, it could impact supply chain stability and pricing.

Lithium and rare earth mining companies like MP Materials MP, which processes rare earths domestically, might see increased interest as the US looks to expand its refining capabilities.

What's Next?

With the US unable to secure a direct supply of Ukrainian minerals for now, Washington may have to fast-track domestic refining projects or seek alternative deals. Meanwhile, Ukraine might turn to European nations or even China to fill the gap. For now, investors should brace for potential market fluctuations in defense, tech and EV sectors.

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