Donald Trump sent Russian markets into freefall yesterday after launching an unexpected verbal assault on Vladimir Putin, calling the Russian leader “absolutely crazy” and threatening fresh sanctions over Moscow’s escalating attacks on Ukraine.
The Moscow Exchange (MOEX) index plunged more than 2% within hours of Trump’s comments, dropping from 2,735 points at opening to 2,711 by late afternoon – wiping an estimated $1 billion off the value of Russian stocks in a single trading session.
The dramatic market reaction marks a significant shift in Trump’s approach to Putin, whom he had previously praised and defended during his first presidency, often to the bewilderment of allies and critics alike.
Putin is absolutely crazy to think he can continue this war without consequences,” Trump told reporters at the White House. “The destruction has to stop, and if it doesn’t, we’re looking at sanctions that will make the current ones look like nothing.”
The comments sent traders scrambling in Moscow, with energy giants Gazprom and Rosneft leading the decline. The ruble also weakened against the dollar, while Russian government bonds saw a sharp sell-off.
This is exactly what markets feared – Trump actually getting tough on Russia,” said Michael Petrova, a Moscow-based financial analyst. For years, Putin banked on Trump being soft. Now that calculation looks seriously wrong.”
The timing of Trump’s comments appeared to catch the Kremlin off guard. Russian officials had reportedly been optimistic about improved relations following Trump’s return to the White House, with some even suggesting sanctions relief might be on the table.
Instead, Trump’s threat of new penalties has Russian oligarchs and business leaders nervously checking their assets. Several prominent Russian businessmen were seen leaving Moscow’s financial district looking visibly shaken yesterday afternoon.
The market reaction shows how dependent Russia’s economy has become on the hope of sanctions relief,” explained Dr Sarah Mitchell, a Russia expert at the Brookings Institution. Trump just pulled the rug out from under them.
The president’s comments came after intelligence briefings showing Russia had intensified missile strikes on Ukrainian civilian infrastructure, including hospitals and schools. Sources suggest Trump was particularly angered by images of wounded children.
“He saw the photos and just lost it,” according to a senior administration official. “He kept saying ‘this is crazy, this is absolutely crazy’ and demanded options for response.”
The market turmoil extended beyond stocks. Russian corporate bonds tumbled, while the cost of insuring Russian debt against default spiked. Several planned IPOs by Russian companies were reportedly postponed indefinitely.
For Putin, the economic blow comes at a particularly sensitive time. Russia’s war economy is already straining under existing sanctions, with inflation running hot and the central bank struggling to maintain stability.
“They’ve been holding things together with string and prayer,” said economist James Crawford. A new round of Trump sanctions could be the thing that finally breaks the camel’s back.
The irony of Trump causing Russian market chaos isn’t lost on observers who remember his first term, when he was accused of being too cosy with Putin. Democrats who once criticised him for weakness on Russia found themselves in the unusual position of praising his stance.
“Better late than never,” said Senator Mark Johnson, a longtime Trump critic. “Though I have to wonder what took him so long to see what the rest of us saw years ago.”
Russian state media, which had been effusive in its coverage of Trump’s return to power, struggled to explain the sudden shift. Several prominent talk show hosts appeared visibly confused on air, with one calling it “an unexpected betrayal.
The Kremlin’s response was notably muted, with spokesman Dmitry Peskov saying only that Russia “regrets the unfriendly rhetoric” and remains open to dialogue. Behind the scenes, sources report Putin was furious, throwing what one insider described as “a spectacular tantrum.”
Trading volumes on the Moscow Exchange surged to their highest levels in months as investors rushed to dump Russian assets. The technology sector was hit particularly hard, with Yandex falling over 5%.
It’s panic selling,” admitted one Moscow trader who asked not to be named. “Everyone thought Trump would be our friend. Now we’re not so sure.”
The White House hasn’t specified what new sanctions might entail, but experts speculate they could target Russia’s remaining banks, technology sector, or even secondary sanctions on countries still trading with Moscow.
European markets initially rallied on the news, with defence stocks particular beneficiaries as investors bet on continued Western support for Ukraine. The dollar strengthened against most currencies.
For ordinary Russians, the market drop translates to real economic pain. The weaker ruble means imported goods will become more expensive, while pension funds invested in Russian stocks will see their values decline.
First they told us sanctions would make us stronger,” complained Moscow resident Elena Volkov. Now Trump, who we thought understood Russia, is making things worse. What’s next?”
Some analysts caution the market reaction may be overdone, noting Trump’s history of dramatic statements that don’t always translate to policy. But others argue this time feels different.
The tone was completely different from anything we’ve heard from Trump on Russia before,” noted political analyst Robert Chen. “This wasn’t admiration or understanding – this was genuine anger.”
The episode has also raised questions about what changed Trump’s perspective on Putin. Some speculate intelligence briefings about Russian activities, while others suggest pressure from advisors finally broke through.
Whatever the cause, the $1 billion market loss sends a clear message: the days of expecting friendly treatment from Trump may be over for Putin’s Russia.
As Moscow’s traders headed home yesterday evening, many were already bracing for further declines. “Tomorrow could be even worse,” predicted one veteran investor. “When Trump turns on you, he really turns.”
For Ukraine, watching its adversary’s markets crumble offered a rare moment of satisfaction. “Every billion they lose is a billion they can’t spend on missiles,” said one Ukrainian official. “Keep tweeting, Mr President.”
