Ukraine-Russia Conflict Escalation

What happened: The Ukraine-Russia conflict escalated significantly on February 24, with Russia launching a massive 11-hour missile and drone strike on Kyiv, killing at least 20. This attack came hours after Ukrainian President Volodymyr Zelensky warned of an impending "massive" escalation by Moscow. Meanwhile, Ukraine has been conducting a 40-day "campaign of terrors," targeting Russian soil with drone attacks and hitting multiple energy and industrial sites deep inside Russia. The US is reportedly preparing to intensify the conflict in the coming year.

Market impact: The escalation in the Ukraine-Russia conflict has driven up energy prices, with European natural gas futures surging on fears of supply disruptions. Defense stocks have also seen a boost, as investors anticipate increased military spending. Companies with significant exposure to Russia, such as Renault and Sanofi, have faced valuation repricing due to potential sanctions and operational disruptions.

What to watch next: The next key catalysts in this narrative will be Zelensky's response to Putin's rejection of his open letter urging a meeting, and the potential retaliation from Russia following Ukraine's strikes on Russian soil. Additionally, investors should monitor the US's planned intensification of the conflict, as any announcements or actions from Washington could significantly impact global markets.