The Zhitong Finance App learned that Trump announced an “energy cease-fire” between Russia and Ukraine, focusing Wall Street analysts' latest differences on one key question: can the diplomatic statement led by the US President be transformed into a real improvement in energy supply, thereby loosening the pressure on inflation and surging treasury bond yields on global technology asset valuations? Former J.P. Morgan strategist Marco Kolanovic questioned the credibility of the cease-fire, while Wall Street strategist Tom Lee, who has accurately predicted the market many times since 2025, emphasized that if the energy cease-fire is implemented, it will help mitigate the continuing impact of high oil prices on consumers, the economy, and the stock market.
US President Donald Trump's announcement of an energy cease-fire between Russia and Ukraine triggered a very different reaction from Wall Street strategists on Sunday: former J.P. Morgan strategist Marko Kolanovic questioned the credibility of the news, while Fundstrat's Tom Lee pointed out that lower oil prices could be beneficial.
“Everyone saw the burning tankers, oil fields, and the airport this weekend. This energy cease-fire looks like yet another scam.” Writing on the X platform, Kolanovic expressed doubts about Trump's claim that the two countries have agreed to stop attacking energy infrastructure.
Li, co-founder and head of research at Fundstrat Global Advisors, gave a more optimistic review, but he also made assumptions about his judgment.
“If true, it would be beneficial.” Lee wrote on the X platform, “The rise in oil prices has always been a source of global inflationary pressure and consumer distress.”
Before the two had these different reactions, Trump claimed that an agreement had taken effect immediately.
“Immediately, the energy cease-fire in the Russia-Ukraine war came into effect. Both parties have agreed. Don't break the cease-fire!” Trump wrote on social media, but did not provide details on the duration of the cease-fire or enforcement mechanisms.
Kolanovic has a doctorate degree in theoretical high-energy physics from New York University. In his early years, he worked in derivatives and quantitative research at Merrill Lynch and Bearsden, then became the chief market strategist and co-head of global research at J.P. Morgan Chase, and left office in July 2024. He is famous for his research on capital flows, derivatives, and cross-asset market structures. His research methods have been used by large hedge funds, so he is well known among institutional investors.
Ukrainian President Vladimir Zelensky then questioned Trump's claims. He told Axios reporter Barack Lavida that the announcement came as a surprise to him. “I just heard the news of the cease-fire.” Zelensky said and added that Ukraine is willing to accept an energy cease-fire if Russia agrees. He asked Trump to explain when the agreement will be implemented.
Russia has attacked Ukraine's power grids, power plants, and gas infrastructure many times, while Ukrainian drone attacks have damaged Russian refineries and export facilities. These attacks disrupted energy supplies and boosted fuel prices, particularly diesel. Diesel is essential for trucking, agriculture, and industrial production.
Trump criticized Ukraine's attacks on oil refineries, saying the attacks contributed to a rise in US diesel prices. His administration recently relaxed sanctions on Russian diesel exports after talks with Russian President Vladimir Putin. Zelensky criticized this, arguing that the move could provide Moscow with more revenue to finance the war. Axios reports that Trump made this decision because Ukrainian officials rejected repeated US requests to stop attacking Russian refineries.
For investors, a credible cease-fire agreement could help ease pressure on global energy prices, thereby reducing inflation and transportation costs, and improving the prospects for fuel-intensive businesses. However, the arrangement announced by Trump has not been confirmed by Russia, and Zelensky's response also indicates that Ukraine has not officially agreed to this arrangement. This uncertainty has forced the energy market to weigh the possibility of falling prices and the risk of continued attacks on critical infrastructure.
Is the “energy cease-fire” colliding with the flames of war a reality? The market is still waiting for peace dividends that can achieve stable energy delivery
The first disagreement between Kolanovic and Tom Lee is the possibility of implementing a cease-fire. What Kolanovic saw was the gap between the attacks on oil tankers, oil fields, and airports and the cease-fire statement; Tom Lee discussed the economic benefits after implementation of the agreement, and “if true” was a prerequisite for his judgment. The latest news further revealed implementation obstacles: Zelensky said that after Trump announced a cease-fire, the Kyiv power plant and energy facilities in the Kharkiv region were still attacked by Russia, and Ukraine is awaiting specific arrangements. Axios quoted White House officials as saying that the initial plan may only involve refineries, and Russia has yet to accept it. Stopping attacks on refineries and stopping attacks on all energy facilities clearly corresponds to different security and supply recovery prospects.
Nor has there been a breakthrough in the Middle East sufficient to support a “comprehensive easing.” Iran said on October 11 that America's response to the conditions relating to the reopening of the Strait of Hormuz was “inadequate”; at the same time, Saudi airports have been attacked one after another, and oil tanker transportation in the Gulf continues to face security threats. Diplomatic contacts are ongoing, but transportation risks and infrastructure risks have yet to subside substantially. During the Asian session on the morning of October 12, Beijing time, Brent crude oil reported 105.48 US dollars/barrel, up 0.73%; WTI reported 92.44 US dollars/barrel, up 0.64%. Based on the calculation of 72.48 US dollars and 67.02 US dollars on February 27 before the war broke out, the two major benchmark oil prices increased cumulatively by about 45.5% and 37.9%, respectively. The price reaction at Monday's opening shows that some cease-fire news that came out over the weekend has yet to offset market concerns about supply disruptions.
Looking at the energy supply mechanism, what really affects inflation is how much crude oil can be processed by refineries, how much refined oil products can be exported, and whether transportation can be completed safely. If the Russian-Ukrainian energy facility cease-fire continues, it may reduce the risk of further damage to refineries and create conditions for maintenance and export resumption; improved diesel supply will also be transmitted along road transportation, agricultural machinery, and industrial logistics to ease the cost pressure on enterprises. However, diesel prices are also affected by crude oil costs, refining capacity, and transportation costs. The fall in crude oil does not guarantee a simultaneous or equal reduction in diesel prices. What investors need to see is the continuous cost improvement brought about by the resumption of operation of the energy supply chain.
The long-term debt sell-off storm is still sweeping the global financial market
Energy shocks are being compounded by long-term capital supply and demand pressures, driving up the anchor of global asset pricing. The yield on 10-year US Treasury bonds once rose to 5.364% on October 7, hitting a 24-year intraday high; the 30-year yield once hit about 5.732% on October 8. Purchases then drove yields back, but the end-of-day curve announced by the US Treasury Department on October 9 still showed that the 10-year and 30-year terms were 5.24% and 5.60%, respectively. This means that although long-term financing costs have left recent peaks, they are still at a significantly high level.
The reason why long-term yields are difficult to fall quickly with just one cease-fire declaration is because their pricing includes both future short-term interest rate paths and the term premium required to hold long-term bonds. Higher energy prices increase the risk that inflation will continue to be high and limit the central bank's room for relaxation; fiscal financing needs and policy uncertainty will increase the compensation required by investors to bear long-term risks. The 10-year term premium estimated by the New York Federal Reserve model recently rose to about 96 basis points, a 12-year high; on October 9, the actual yields on 10-year and 30-year inflation-protected treasury bonds were 2.91% and 3.32%, respectively, indicating that financing pressure is also reflected in higher actual capital costs.
The AI investment boom is also increasing this pressure through the financing market: after some institutions buy long-term bonds from tech giants, they will sell US bond futures to hedge for a long period of time, or sell US bonds to free up investment credits; rising interest rates will extend the expected life of mortgage securities, which will also trigger additional interest rates to offset the market. The combination of corporate financing and hedging transactions may reinforce the sell-off of bonds. Therefore, even if expectations of interest rate hikes cool down in the near future, long-term bonds may still be under pressure from supply and risk compensation.
This pressure is also being transmitted overseas. The yield on British 30-year treasury bonds hit 6.05% on October 8, the highest since the beginning of 1998; in addition to rising global interest rates, France was also affected by deficits falling short of expectations, debt burdens, and political uncertainty. The yield premium on French 10-year treasury bonds compared to Italy rose to 30 basis points, setting a record since the establishment of the euro. It also reveals an important change — shared energy shocks and rising capital costs are amplifying countries' different fiscal vulnerabilities.
Needless to say, a credible and ongoing energy cease-fire between the warring parties is expected to simultaneously improve the cost and demand environment for aviation, transportation, and some consumer companies, and ease the heavy pressure of US inflation and continued discounting on growth stocks; however, falling oil prices can only lift some of the restrictions, and fiscal risks and long-term financing needs will not disappear with it. As far as the AI computing power infrastructure investment theme is concerned, the “cutoff line” that really needs to be crossed is whether the project's cash return can cover capital costs and equipment renewal investment. If energy costs fall, long-term returns stabilize, and AI companies continue to cash out revenue and cash flow, technology stocks can be expected to receive mutual support from both sides of profit and valuation.