Stalemate in Ukraine Means a Bull Run for Defense and Energy—Here's How to Play It

The recent prisoner exchange between Russia and Ukraine, finalized in Istanbul on June 2, 2025, was hailed as a rare breakthrough in a war that's ground into its third year. But let me tell you: this deal doesn't signal an end to the conflict. Instead, it's a stark reminder that the stalemate is here to stay—and that means big opportunities for investors willing to bet on the sectors that thrive in chaos.

First, the facts: While both sides swapped over 1,000 severely wounded prisoners and agreed to repatriate 6,000 sets of remains, the core issues remain unresolved. Russia's demands for Ukraine to cede four regions, abandon NATO, and declare permanent neutrality? Out of the question for Kyiv. Ukraine's insistence on an unconditional ceasefire and territorial integrity? Not happening for Moscow. And with military actions continuing—drone strikes, artillery barrages, and Russian advances in Sumy Oblast—the battlefield isn't budging.

This isn't a peace deal; it's a Band-Aid. And when it comes to investing, Band-Aids don't heal systemic wounds. They just buy time for the real problem to fester.

So where does that leave investors? Let's break it down sector by sector.

Defense Stocks: Load Up Now
The prisoner swap didn't just highlight the war's persistence—it also underscored its intensity. When armies are swapping bodies and the wounded, it means combat is still raging. And when combat rages, governments spend.

Look at the data: RTX is up 27%, LMT 19%, and NOC 22% since June 2024. Why? Because defense budgets are surging. The U.S. is doubling down on Ukraine with drones, artillery, and missiles. Europe is scrambling to modernize its militaries. Even Russia, despite economic sanctions, is prioritizing its war machine.

Action Alert: These stocks aren't just trading on Ukraine—they're pricing in a world where defense is a permanent growth industry. Overweight your portfolio here.

Energy: Bet on Infrastructure, Not Volatility
The war's persistence also means Europe's energy crisis isn't over. Russia's gas taps are still turned down, and Ukraine's pipelines are battlefields. Meanwhile, U.S. LNG exports to Europe hit record highs in 2024, and that's not stopping.

But here's the catch: Don't chase oil prices. The geopolitical risks are real, but OPEC+ could undercut gains. Instead, go for the sure thing: infrastructure.

Companies like Kinder Morgan (KMI) and Williams Companies (WMB)—which operate pipelines and terminals—benefit from the steady flow of LNG to Europe. Meanwhile, solar and wind firms like NextEra Energy (NEE) and Vestas Wind Systems (VWDRF) are getting a second wind as the EU accelerates its green transition to reduce Russian gas dependency.

Data check: . The gap remains stubbornly wide, proving Europe's need for alternatives isn't going away.

Avoid European Equities—They're Sitting on a Powder Keg
The prisoner exchange didn't just fail to resolve the conflict—it exposed new risks. The dispute over Ukrainian children abducted by Russia, the stalled ceasefire talks, and the ongoing military actions mean instability isn't confined to the battlefield. It's spreading into politics, trade, and social cohesion.

European stocks, especially in sectors like tourism, manufacturing, and real estate, are vulnerable. The Eurozone's economy is already limping——and further sanctions or a Russian escalation could send it into a tailspin.

Investors: Stay away from European equities unless you're ready to lose sleep.

The Bottom Line: This Conflict Isn't Ending—Invest Like It
The prisoner swap was a humanitarian win, but the war's “endgame” is still a mirage. Russia isn't budging on its demands, and Ukraine won't kneel. That means defense stocks, energy infrastructure, and commodities tied to conflict (think titanium, uranium, or rare earth metals) are the plays to own.

The market may wobble on headlines, but the big picture is clear: prolonged conflict equals big profits for the prepared. Don't be left holding European paper when the next crisis hits.

Stay aggressive, stay focused, and keep your powder dry—where it matters.